Forex Trading Systems

The Two Goals Of The Forex Technical Trader

2009-04-04T09:36:00.000-07:00

As you become more involved in the world of forex trading you´ll soon start learning that you are in need of a “compass” that is capable of indicating you what a high probability of becoming profitable trade is and what the bad trades are. It may not become clear at the beginning but the most used and successful approach (especially if used in a complete forex trading system) is technical analysis and by using this kind of approach you become what´s is known as a forex technical trader.

As a Forex Technical Trader your two main goals will be these:

1.Identify the price action of the particular currency pair you are trading.
This means that you must learn to identify the real trend. For example;
if the EUR/USD is at 1.3236 and goes to 1.3229, 1.3118, 1.3010, 1.3003,
this means that the market is in a down trend. So no matter what every technical
indicator might predict, if the trend is down, then is a down trend, use your eyes wisely. A good forex trader needs only to be concerned with what the market is doing,
not what the market might do and the current currency price tells you what the market is doing.

2. It is very important that you always remember that all technical indicators are only giving confirmations based on what the market is telling you. Live in the present. So you must make a rule to always listen and pay close attention to the market and let it tell which method you will use and what strategies and techniques you will implement in order to make a profitable trade.

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Forex Auto Pilot System...An Awesome System!

2008-02-20T11:06:00.000-08:00

Check out just a handful of the key features that make Forex Auto Pilot – the world’s number 1 Work At Home opportunity online…

Automated Forex Robots that analyze the market - giving you an ‘unfair advantage’ by placing the odds in your favor. After all, there’s no fun in gambling if you can’t win.

Remember ‘trend is your friend’ – Forex Auto Pilot knows EXACTLY when to trade in order to maximize your profits.

If you don’t feel completely secure about ‘live’ trading, simply shape and sharpen your skills on our demo account.

Forex Auto Pilot looks at the bigger picture and so helps clearly define the trend. Hidden trends are now a thing of the past!

State-of-the-art money management programming that allows the individual trader to turn a profit even under unfavorable conditions on the market.

The system never gets angry or greedy allowing trader investment to operate at 100% efficiency.

Let your profits run! FAPS allows your position to be open for as long as the market wishes to reward you.

“Keep it simple stupid” and that’s exactly what our automatic cash formula does! A simple and effective method of trading Forex maintains profits over HUGE amounts of time.

Monitoring high amounts of trades during overlapping market hours has become as easy as 1-2-3.

The secret ‘Fibonacci Formula’ that determines the most beneficial time to enter and exit the market.

Will This Work For Anyone?

Absolutely, you don’t need any previous Forex experience in order to earn a substantial income with Forex Auto Pilot, and it doesn’t matter where you live! We have members in over 100 different countries, so this opportunity is available to almost everyone. It was developed for beginners and experienced traders alike, and with our cookie-cutter step-by-step training material, newbies will gain all the knowledge needed to succeed in the Forex market. The best part is that the majority of people who use our system are online and trading within minutes of downloading the software.

Test The Forex Auto Pilot System

Forex Trends And Trends Will Make You Rich.

2007-04-05T16:52:00.000-07:00

Yes, as long as you learn how to identify the trend and how to profit from it you will be always on the money as you advance on your trading career.

As every experienced forex trader knows, the forex markets have a characteristic that make them kind of special compared to other capital markets, that is, Forex is a highly trending market. And you can probe it to yourself by looking at the forex charts in any time range you choose. If you watch with attention you will realize there are always marked trends for any currency pair you choose to watch. Then the art is in identifying the trend early enough to enter the market with an edge in your favor and also in learning when to exit an exhausted trend that is about to reverse. That’s, in a few words, all you need to make money with Forex.

A forex trading system that is based on the trending characteristics of the market is, in short, a system based on common sense and logic. And besides this kind of approach has the advantage that it tends to be simple, stable and consistently profitable. With this system you are not trying to read the future with a crystal ball but you are opening your eyes to the most basic behavior the forex market can show to any smart trader.

Learning the correct approach to identify the trends when forex trading can make you a highly profitable trader. There are people who makes more than $1000 dollars per week using this simple approach to trading the forex. Sometimes we think that everything involved with forex trading has to be overly complicated in order to work. But simple approaches can work too if you know how to use them.

Trends Equal Money In Forex Trading.

2007-04-04T15:44:00.000-07:00

For many people that has recently discovered the great earnings potential of the currency markets the problem of identifying a good forex system that will help them become profitable in their trading business becomes the main thought occupying their minds.

The forex market has the characteristic of being a highly trending market. As you can see by looking at the forex charts in every time range, there are always marked trends for any currency pair. The art is in identifying the trend early enough to enter the market with an edge in your favor and also in learning when to exit a trend that is about to reverse.

It is all about learning the right timing. And this is not involved with any future prediction capacities of the forex trader. Predicting the future is a complicated way of approaching the currency markets for the ordinary human being who usually doesn’t relay on a crystal ball to guide his life. Reality always imposes itself in every aspect of our lives showing us the right way, and in the case of forex reality tells you must aim to understand the currency markets instead of aiming to predicting the future of any particular currency.

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Learning How To Trade The Markets Will Give You Financial Freedom.

2007-02-26T19:08:00.000-08:00

In today’s world, finding and effective way of generating a good and more than good income outside of a traditional job can be difficult for those new in the entrepreneurs jungle.

As soon as you find yourself outside your traditional job, ambivalent feelings start arising. You feel both alleviation from having regained your life and be in control of your destiny and a scary feeling of loneliness in an uncharted sea where you may lose the control you just gained in any moment. But despite everything you decide to go ahead and as you start looking there seems to be many options in front of you promising big fortunes but the reality is that only a few ones will give you the financial freedom you are looking for.

Among those few opportunities that will appear in front of you as a great promise and that will indeed deliver, you will find the world of “Trading”. You can trade indices, stocks, e-minis, commodities, options or forex. Each of these markets have their very particular characteristics that you will need to learn but in a general sense they are all equal, their basic characteristic is that they offer values with prices that oscillate over time and these oscillations can be analyzed such that you will be able to profit from the variations in the prices. In short, the basis for being successful with each of these markets is learning how to trade.

With this I mean, learning the basic concepts behind a proper analysis of the markets. What patterns are the best ones to trade, what behaviors of the markets will be in your favor, what will play against you, etc.

Learning how to trade is similar to learning to fish money out of the markets at your will, instead of just spending your hard earned wage every month.

Find More Information Here

How Many Indicators Do You Need To Watch When Forex Trading?

2007-02-26T11:48:00.000-08:00

Forex trading has become a widespread activity around the world these days. Since the introduction of the internet, the access to the currency markets has become a work at home activity that many people has embraced and converted into their main income source.

But Forex trading is not easy. It may be hard work sometimes, but no one can deny that trading the forex has a huge profit potential for the “initiated trader”. The amount of work depends on how much you know about the currency markets and the tools available to you.

As a forex trader you will need to have a “trading compass” in order to successfully trade the market. The usual thing for the forex trader is to have a number of indicators that will serve as the “compass” in his trading activity and efforts for profitable trades. There are indicators as Bollinger Bands, EMA’s, Elliot Waves, Fibonacci levels, Pivots, etc. I’ve known of traders who have tested more than 100 indicators!.

Once you understand and learn the language of each of these indicators you must be ready to read the forex charts for a while and start making decisions based on the information you get from the number of indicators you may be using at the moment, and these can be many indicators that you will have to use at once when you are facing a no very clear market.

The work involved in using these indicators is one of the main reasons most forex traders dream with a tool that would let them trade without spending too much time reading the charts and that would also help them reduce the stress of the trading decision. All this would involve the use of a “Forex Trading Machine”, a tool that, believe it or not, nowadays exists and which use has been spreading in the forex trading world.

Is A 5 Figures Income Possible Trading Forex?

2007-02-22T11:40:00.000-08:00

Many people would love to have a high income just by doing an activity they can do from home or anywhere else they wish to be. But most of the time they don’t know where or what they can do to gain that income and freedom a regular job rarely gives anyone.

Earning a more than decent income from home is not a distant dream any more for many Forex traders around the globe. They are people from all walks in life that once in their busy lives found that Forex existed and they correctly appreciated the multiple possibilities and high income potential this activity has for those with the proper knowledge of the currency markets.

Forex is a very dynamic market where prices are continually oscillating and with activity practically the whole week, except for a short period during the weekends. These characteristics makes the Forex a great place to trade. This market has so much life that you can analyze it and realistically hope to gain a lot of understanding about how it behaves with time and around particular world events.

The dream of every forex trader is to have a trading system that will allow him to trade the currency markets profitably with the least amount of analysis done on the charts. These means a much less confusion potential and also less doubts when the moment of truth comes and you place a trade for your chosen currency pair. These kind of “trading machines” let you trade based only on simple signals that result from the previous analysis of the data by the “machine” saving you most of the sweat when trading.

The “Forex Trading Machine” has been giving great results for many traders around the globe. You can test it here:

=>> http://www.1-forex.com/FXTMachine/Trade-by-the-Button/

Fibonacci Trading, Your Compass To High Probability Trades.

2007-02-20T14:43:00.000-08:00

When you start trading the currency markets, or any other market, you usually think that every trade is worth the risk and that a good trading system will teach you how to win in every trade you make. But that’s far from the truth.

One of the first things you must realize as you enter the world of trading is that not every trade is worth the risk and every professional trader aims only for those high probability trades that will surely make them money. These are always trades that are highly predictable with the particular trading system you are using.

For example, by the combination of trend and Fibonacci techniques you can obtain very powerful signals for high probability trading. By using these indicators, trend-lines and Fibonacci levels in conjunction you will greatly improve your chances to pinpoint a highly profitable trade.

You may be asking by now what Fibonacci is? Fibonacci trading is directly related to the existence of specific mathematical proportions that appear in many places and structures in nature. Fibonacci was the last name of an Italian mathematician who is remembered by his famous “Fibonacci sequence”. The definition of this sequence is that it’s formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13. In the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc. These ratios are what determine the famous Fibonacci Levels.

Learning the correct use of these levels can positively impact your trading success. Fibonacci levels can perform as a compass guiding you to high probability trades.

http://www.1-forex.com/Fibonacci

Trading Characteristics Of The Forex Markets.

2007-02-19T21:01:00.000-08:00

There are a number of reasons why FOREX trading is such a great way of entering the capital markets.
Among them we can find it’s easy accessibility thanks to the use of the internet, the fact that currency trading
is all commission-free and also the low transaction costs involved.

There is one important characteristic about Forex that makes it what it is. This important characteristic is that there is not a single unified foreign exchange market in the world. Instead of this, due to the over-the-counter nature of currency markets, there exists a number of interconnected marketplaces, where many different currency instruments are traded. What this implies is that there is not a single dollar rate in the world, but different rates, depending on what bank or market maker you are asking a quotation to. In practice these rates are often very close as you can easily find on the web.

As a piece of general knowledge you must learn that the main forex trading centers are placed in New York, London, and Tokyo, but this doesn’t mean they are the only ones; there are other banks throughout the world that also participate. For example, as the Asian trading session ends, the European trading centers open, then the US session, and then the Asian centers open again. This kind of “continuos” market has the advantage that traders can react to news immediately, instead of waiting for the markets to open.

There are many factors that can influence the exchange rate of a particular currency. These rate fluctuations are usually caused by changes in inflation, GDP growth, interest rates, budget and trade deficits or surpluses, and other macroeconomic conditions f the country emitting the particular currency. Also major news that are released publicly can affect the prices of currencies; so many people have access to the same news at the same time that they can shake a currency price really hard.

According to a specialized study, the most heavily traded products on the spot market are: EUR/USD - 28 %, USD/JPY - 18 %, GBP/USD - 14 % and the US currency was involved in 89% of transactions, followed by the euro (37%), the yen (20%) and sterling (17%).

Forex Trading can make you real money if you learn the correct trading strategies. I particularly recommend you this one:

=>> http://www.1-forex.com/Day-Trade-System/

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The Right Forex System Can Make You Rich.

2007-02-19T15:07:00.000-08:00

Whatever you think you should be doing in forex, the first thing you must consider when thinking about starting a profitable forex trading career is to find a forex system that will give you consistent gains. This means a system that will have a high percentage of successful trades over losing ones. No system is perfect, that’s true, but you will make money even with losing trades, as professionals do, if you do things right with your system. Lots of people earn a living trading the forex and you can do it too.

A key ingredient in your forex trading system must be to have the proper money management rule sin place before you start trading. Bad money management can sink your trading career at the very beginning. So be wise and plan ahead in your system.

Also you should have clear chart setups in order to have a wide and detailed view of the market at the moment you are trading. With your charts in place you should load your trading system with the correct logic of when to enter a trade and when to exit. In forex trading these two critical times often means lots of money inside or out of your pocket. Never use a system that doesn’t give you a clear logic for your trades.

It is always a plus if your system ha information of the best times of the day when to enter the markets and when you should better leave and take a brake. Forex trading session is all day but there are hours when the volume increases and trends show themselves more clearly. Taken note of this and considering when looking for a good forex trading system for you.

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Technical Analysis & Trends In Forex Trading

2007-02-06T11:54:00.000-08:00

Everyone is talking about forex these days, and there are big reasons that explain this huge interest expressed by people all around the world who are willing to learn and enter the world of forex trading. Forex is a huge market with an almost continuos activity all year long, week after week, hour after hour and with the particular characteristic of showing highly marked trends, making it an easily tradable market if you know how to read those trends.

In order to correctly read the forex charts you need technical analysis; this is defined as the study of the price and trading history of a particular currency pair. T. A stands in the opposite sidewalk to what’s known as fundamental analysis, which is defined as the study of the actual nature and characteristics of the stock or a particular currency in the case of forex. Although some investors combine the two types of analysis in making investment decisions, there are techniques originated from the exhaustive studying of past price charts and trading action during long trading periods that allow the use of only technical indicators in order to have profitable trades.

Technical analysis relies on the empirical evidence to assert that prices do trend. This assumption that prices must trend in the forex market evolution with time is the most important concept in technical analysis..

Technical analysis has many different methods and tools in its arsenal; they all share the characteristic of relying on the assumption that price patterns and trends exist in the markets. Of course, technical analysis is not 100% accurate, but a correct analysis by these methods and techniques will give results that are correct much more often than they are wrong. And this is the basis for building a profitable forex trading system.

If you want to learn more about Trend Trading in Forex and how to become profitable take the first step.

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What’s An EMA? The Concept Behind The 5 EMAs FOREX SYSTEM.

2007-02-05T18:51:00.000-08:00

There is a concept in forex trading and in trading in general that is used as an indicator by many forex traders. This widely used concept is that of the “moving average”. It’s used in the field of finance and specially with technical analysis. It belongs to a family of many similar statistical techniques widely used to analyze time series data.

You can calculate a moving average for any time series, but in our case we are mostly concerned about this average calculated over currency pair prices over time. As an averaged quantity, MA’s can bee seen as a smoothed representation of the current market activity and an indicator of the trend influencing the market behavior. Thus highlighting longer-term trends or cycles. The limit between short-term and long-term depends on the market you are observing, and the parameters of the moving average should be set accordingly.

There are three main types of moving averages. Simple moving average, Weighted moving average, and the Exponential moving average. They are all moving averages but differ on how time period are weighted for the final value of the indicator.

In the case of the Exponential Moving Average (EMA), which is also called Exponentially Weighted Moving Average (EWMA) sometimes, during the calculation the formula applies weighting factors which decrease exponentially. What this means is that more weight (importance) is given to the latest data.

From this definition we can conclude that an exponential moving average reacts faster to recent price changes than a simple moving average. The 12 and 26 day EMAs are the most popular short-term averages. And in general, the 50- and 200-day EMAs are used as signals of long-term trends.

Take your first step into profitable forex trading, visit:

http://www.1-forex.com/5EMA-Forex-Trading/1

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Is Forex Trading By Pushing Buttons Possible?

2007-02-04T19:32:00.000-08:00

Now that many people around the world is thinking about joining the club of the forex traders, the thought of having an automatic system sending you the right signals to enter or exit the market are, I’m sure, pervasive in many of those joining the ranks of aspiring traders.

In principle the concept of trading the forex by pushing buttons and having precise entry and exit signals seems a bit awkward. With a forex market having such a huge volume of transactions during most of the trading week and with the market quotes constantly oscillating it seems next to impossible to have such a simple approach to the trading of currencies.

Contrary to this conception; the other day, as I surfed the web I discovered a curious system called the “lazy trading forex software”, the title naturally catches your attention but it really catch my attention when I read the statement where the author mentions that he has historically won 76% of the time with his trades. That’s not a perfect record but it’s a very impressive one for any forex trader world wide.

As I read more information about this system I discovered one more thing that really excited me, as I’m sure would excite many savvy webpreneurs with some flight hours on the web, the issue was related to the fact that you can use this software with the famous Betonmarkets site. Just thinking about beating Betonmarktes makes me salivate, again if you have been around for a while and trying to make money from the internet you will know the reason of my excitement. This is the first time I find a piece of software that has the ingredients that will help you to become profitable at this great site; a place that may become a very dangerous site if you don’t know what you are doing.

Can you trade the Forex Markets just by pushing buttons? Maybe you can…

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Price Driven Forex Trading, The Concept Behind The Forex Trading Machine.

2007-01-06T17:27:00.000-08:00

Entering and trading the Forex markets has become one of the most popular activities among people from all walks in life these days. But Forex trading is not always easy, you can be mislead by the apparent periodicity of the forex charts and think you can easily spot profitable trades. But often this is not true. You will need a good amount of knowledge related to how the currency markets behave in order to become a profitable forex trader.

For those worried about how to make money consistently trading the forex markets, recently a veteran trader has been spreading the word about an original and quite revolutionary way to trade the forex markets. It is a system based on what is called Price Driven Forex Trading (PDFT).

PDFT is a system based in three trading strategies that are able to produce consistent and systematic profits for the trader that follows PDFT to the letter. In short, Price Driven Forex Trading (PDFT) is a method for trading the forex market without using any type of indicators, support or resistance levels, moving averages, pivots, oscillators, fibonacci, trend lines or ANY other trading tool you can think of right now. PDFT only uses the price of the currency pair and a time element.

This system is the basis of the elusive forex trading machine. This original trading system based on PDFT concept is 100% mechanical, this means it requires no discretion or interpretation, that’s why the term “machine”. You will simply have to follow strict rules in order to operate the forex trading machine. This may be a dream come true for many aspiring and veteran forex traders.

If you want to test the FTM and for more information Click Here

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The 5 EMAs FOREX SYSTEM, Exponential Moving Averages Full Potential.

2007-01-05T16:10:00.000-08:00

Among one of the important concepts a new forex trader should know is what a Moving Average means, how it’s calculated and what its use as a trading indicator is.

Moving Average is defined as a technical indicator that shows the average value of a particular currency pair over a previously determined amount of time. This means, for example, that prices are averaged over 20 or 50 days, or 10 and 50 min depending on the time frame you are using at the moment of your trading activity.

As an averaged quantity, MA’s can bee seen as a smoothed representation of the current market activity and an indicator of the major trend influencing the market behavior.

The basic mechanics of how Moving Averages can tell you where the forex market is moving (up or down), at the moment of your analysis is by considering two different time frame Moving Averages and plotting them on the forex chart. It is very important that one of these MA is over a shorter time period than the other one; let’s say one will be over a 15 days period and the other over a 50 days period. Most trading station software available by a number of brokers will let you do this plotting and much more.

Recently there has been the realese of a new forex trading system called “The 5 EMAs FOREX SYSTEM”. This system will allow you to identify both entry and exit points with incredible accuracy. He even claims you can convert $1000 into $1000 000 in just 24 months. He may be exaggerating a bit on this, but his plan of action and use of moving averages is quite outstanding and accurate.

Depending upon the exit strategy selected, the system generates monthly returns of between 30% and 55%. Which is more tha enough to make a living trading the forex markets with the 5 EMAs Forex System.

Give the first step into profitable forex trading

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Lazy Trading Forex Software, Is It The Answer?

2007-01-05T14:46:00.000-08:00

They say that if you can check a mark in a box you can succeed using the Lazytrading Software. It’s not a secret that every forex trader has the dream of one day finding a mechanical way that can tell them, with a high accuracy, when to enter the markets and when to exit with a nice profit. But for many years this has been just that, a dream.

Recently as I surfed the web I discovered this curious system, the lazy trading forex software, and it catch my attention when I read the statement where the author mentions that he has historically won 76% of the time with his trades. That’s not a perfect record but it’s a very impressive one for any forex trader around. So impressive that I decided to make some more research on this forex software.

I discovered a few things about the lazy trading forex software. One of them is that the amount of time needed to implement this system is not much . It is just matter of checking you computer two or three times a day and see if you have a signal. The signal is given by the software in a simple to read format that will make your trading rather easier than if you had to read through the charts and pin point indicators with not much accuracy. At the beginning it can be a bit confusing to read the signals but you get the use of the software really quick

One more thing that really excited me was the fact that you can use this software with the famous Betonmarkets site. This is the first time I find a software that will help you to become profitable at this great site; that may become a very dangerous site if you don’t know what you are doing.

In short the Lazy Trading Forex Software seems to fulfill the requirements of a great forex trading product. It’s not perfect, I wish the winning record was 100% but with a 76% you can surely make a living trading the currency markets.

Lear more about this great software

Click Here

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Profitable Trend Forex System, Make $5000 A Month Trading.

2007-01-05T13:01:00.000-08:00

The Forex market is known by its immense volume of transactions per trading day, and it’s because of this fact that it’s impossible for a single of the market’s forces to noticeably control the market direction for any considerable length of time, opening many opportunities for traders of any size.

The Profitable Trend Forex System has its origins in a little fact that very few traders know about. This controversial fact is that you don't need complicated and confusing fundamental or technical analysis to trade successfully. Systems that are based on logical, scientifically sound, and well-tested forex trading concepts have been performing extremely well and will continue to do so for many years to come. One of the greatest myths in trading is that you need to forecast or predict the future of the markets in order to make money in the forex markets. But the Trend Forex System author says NO (and this is a big and controversial statement), according to his research nothing could be further from the truth, you don’t need to predict the futur. The fact is that trying to predict future price movements will certainly lead to unnecessary frustration and failure. To be successful in forex trading, you only need to do two things: Identify the trend & join the trend with the precise timing. That’s really all profitable forex trading is about.

As all traders know; trading is difficult and trading is ruthless. In short it’s a hard world so you must have the edge to survive and succeed in this tough business. The Profitable Trend Forex System claims to be the system that will give you the confidence to trade and become profitable. I’ve seen only some of it in action but so far everything works right.

If you want to learn more about Trend Trading In Forex take the first step:

http://www.1-forex.com/Trend-Forex-System/

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A Good Forex Trading System And Its Main Characteristics.

2006-11-28T22:15:00.000-08:00

Forex trading is one of the great money making opportunities available these days. People from many walks of life, men and women, decide to join the forex trading world everyday looking for the great style of life a profitable forex trader can achieve.

But once you enter the world of Forex trading the first thing you will realize is that it’s not easy to become a profitable trader. The more you learn about the currency markets the more you realize the urgent need of a good forex trading system in order to make money and not just spend your time entering trades as a hobby taking you nowhere.

There are many companies and individuals out there offering you forex trading systems that promise to be the real thing and that will teach you how to earn tons of money easily. But you must be aware that not all of them are always sincere and you should be ready to look for some specific characteristics good forex trading systems must have.

For example; they must be willing to let you know part or the basics of their trading system for free, so you can evaluate their claims and be sure of what you will be buying from them. Also, they should offer you a money back guarantee in case the complete system doesn’t stand to their initial claims.

A very good sign of the “goodness” and utility of the system would be if the company offering you their services offers to follow up with you about any doubts and questions arising from the use of their trading system. This follow up can include a users forum, contact phone number, email direct contact, etc.

Also the forex trading system you are acquiring should be recession-proof and go beyond the traditional linear models that are based mostly on past results, it is difficult to make decisions about the future moves of the currency markets based just on past performance. Ideally, the currency trading system you get should allow you to go with the market direction, either up or down, instead of hoping and believing it will go one way or another, and then find out it was all wrong.

And, of course. The system should be given to you with software that performs the complex math behind it, making it simple for you to use at any time and without strange formulas.

Look for these main characteristics in the forex trading system you are planning to buy, and if it full fills them; then you are quite certainly making a good decision by planning about using it in your trading career.

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A Good Forex Trading System And Its Main Characteristics.

2006-11-28T21:58:00.000-08:00

And, of course. The system should be given to you with software that performs the complex math behind it, making it simple for you to use at any time and without strange formulas.

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FOREX, A Trending Market.

2006-10-23T15:26:00.000-07:00

The Forex market is widely known by its high liquidity and high volume of transactions
occurring during most of its long trading week. These characteristics highly contribute
to make the Forex market a very trendy market with few trend-less periods during the
whole trading period.

But what does this mean to the Forex trader? Mainly this trendy characteristic of the
currency markets means that there will be plenty of opportunities for the trader to find
profitable trades during the day.

As you start analyzing forex charts you will realize that the market often display's some
very familiar patterns of price movement, this is; trends; and you will notice that once
a pattern is established, it becomes the most probable course of future price action until
the market changes. Giving you a good forecast of what comes next with the currency prices.

There are two types of markets which will become very important for you to identify and
understand; these are: trending and, the less frequent, trend-less markets. Each market
type has two specific patterns which you will also notice over time.

A Trending market is defined as a steady, elongated price movements with less than a 45
degree angle with occasional pauses, profit taking, or resting periods.

In a Trending market, you will notice two main and quite evident patterns:

Uptrends - A pattern of higher highs and higher lows.

Downtrends - A pattern of lower lows and lower highs.

There is also the less frequent kind of market, this is a Trend-less market with erratic
price movements which are often steep (greater than 45 -degree angle) and cannot sustain
and therefore must reverse. Although the movements can move many points in a short period
of time, they are constantly and rapidly oscillating with the consequence that they often
result in very little net price movement over time.

In a Trend-less market, you will find these main patterns:

Choppy - An erratic pattern of higher highs and lower lows.

Sideways - A narrow pattern of lower highs and higher lows.

While up-trend and down-trend periods will offer excellent trading results most of the time,
choppy markets often create stop outs, this is they activate your stops by constantly overshooting your projected resistance level but without never really crossing too far from this level; while sideways markets produce for little in either direction making them hard to trade and to make any profit during these periods.

As always in Forex, your main trading objective is to get into profitable trades most of
the time and a trending market is the perfect situation to find this profitable trades by
riding the trends until you make your target profit objective of the day.

Forex and Some Important Facts about Bollinger Bands.

2006-10-19T11:07:00.000-07:00

Forex trading is nowadays one of the most looked after occupation for many persons of all ages around the world. This is due to its great advantages over other capital markets and its high profitability potential; among these advantages you will find that is extremely easy to access a trading platform from the best forex broker firms thanks to the internet; and also you will notice that Forex has a high liquidity along with a high leverage.

But having a good broker firm and great trading platform is only one part of what you need in order to make your forex trading career a winning and profitable one. You need to have the right knowledge and techniques in order to forecast with the best accuracy what the market will do next. One of the techniques used to predict the Forex market behavior is that based on Bollinger Bands.

These Bollinger Bands are what is called a technical trading tool and they are widely used in the capital markets (including Forex) and were created by John Bollinger in the early 1980s. These bands technique was formulated based on the need for adaptive trading bands and the discovery that the volatility of the markets was a dynamic phenomena, not a static one as was widely believed at the time.

Bollinger Bands consist of a chart of three curves drawn in relation to currency pairs prices. The band situated in the middle is a measure of the intermediate-term trend and is usually a simple moving average, that serves as the base for the upper and lower bands. The interval between the upper, lower and the middle bands is determined by the volatility of the market, typically the standard deviation of the same data that were used for the moving average. The default parameter is 20 periods and two standard deviations above and below the middle band; of course this may be adjusted to suit your needs.

In short, the purpose of Bollinger Bands is to provide a relative definition of high and low price. By definition prices are considered high when touching the upper band and low when they touch the lower band. This relative definition can be used by the Forex trader to compare price actions and as a very useful indicator when the purpose of the trader is to arrive at rigorous buy and sell decisions.

Forex Trading, What Hours Should I Be Ready For Trading?

2006-10-17T11:00:00.000-07:00

Once you have decided to enter the Forex trading world you will find that FX trading has many advantages over other capital markets. Including among others; very low margins, free trading platforms, high leverage and around-the-clock trading.

It is my main concern in this article to let you know what hours you should be ready and focus for start trading, so you can expect the highest profits in your trades, and not just consider that around-the-clock trading means you should randomly trade through out the day.

In short, it is important to know what the best hours to trade are because if you want to find an appreciable number of profitable trades you need to enter the forex market at the best period of time, i.e., when the activity, the volume of transactions, is the highest.

At any given time; somebody, somewhere in the world is buying and selling currencies. As one market closes,
another market opens. Business hours overlap, and the exchange continues as day becomes
night and night becomes day. Giving you 5.5 entire potential trading days.

Forex Trading begins in New Zealand at Sunday 5pm EST, and then is followed by Australia, Asia, the
Middle East, Europe, and America in this order and through out the day and through out the week until
Friday 4pm EST when the American market closes.

Other important facts every Forex trader should know are: the US & UK markets account for more than 50%
of the forex market transactions; Forex major markets are: London, New York and Tokyo. Nearly two-thirds
of NY activity occurs in the morning hours while European markets are open. And maybe one of the
most important characteristics; Forex Trading activity is heaviest when major markets overlap.

So, the answer to the question; “What hours should I be trading?” is dictated by this last characteristic,
you should trade when the major markets overlap. Now, when do they overlap?.

Considering the different time zones of the world and open and close times for Australian, New Zealand,
Japan, America and Europe markets. We can arrive to the conclusion that there are two major time gaps
when two of the major markets overlap during trading hours.

These hours are between 2 am and 4 am EST (Asian/European) and between 8 am to 12 pm EST
(European/N. American).

So if you want to catch the best trading opportunities of the day and you are in the American continent
you must be ready to wake up early or go to sleep late some times. Of course things change around
the world. What’s the best region where to trade from if you can’t wake up early?… Maybe the Ukraine.

What Is A Mini Forex Account?

2006-10-16T10:28:00.000-07:00

But one of the main worries of the new trader is if he will need lots of money in order to be able to access this market and start placing trades.

The reality is that practically anyone can enter the forex markets and place trades. You don’t need to be super-rich or the owner of a big corporation. You just need a few dollars and the right strategy to start profiting from Forex trading.

In the Forex world there is something called a Mini Account, and it
uses a different leverage calculation than a regular (100k) account.
This means that instead of trading full-size currency lots (100,000 units),
you'll trade in lots that are just 1/10 the size (10,000 currency units),
which in turn greatly reduces the amount of money you risk in each trade you enter.
Pips in a Mini Account are worth, on average, $1 instead of the $8 to $10 value they
have in a regular account. The Mini Forex account offers up to a huge 200:1 leverage,
this means that just a $50 margin deposit will allow you to trade lots worth roughly
$10,000 , but the smaller lot sizes, with correspondingly smaller pip values, means
that you'll be profiting less from a successful trade and also losing less if the trade
goes bad . For example, while a 20-pip loss on a 100,000 USD/JPY position would be $200,
the same loss on a 10,000 USD/JPY position in a Mini account would amount to only $20.

The following are the characteristics of a Forex Mini Account.

- Minimum required account deposit = $300

- Recommended required account deposit = $2,000

- Traded in 10,000-unit currency lots

- Default Margin: set at 0.5% ($50 per mini-lot)

- Leverage up to = 200:1

Contrary to what you may be tempted to think, there is no downside
to trading a Forex mini account, you will be enjoying all the benefits
that full-size FX account holders enjoy; including, same state-of-the
art trading software from your broker, charts, resources, and tools.
This mini accounts are ideal for a new Forex trader to develop a disciplined,
rational forex trading strategy and technique without excessively focusing on
the fear naturally arising from thinking too much about profits and losses.

One more great new for the starting forex trader is that there is no maximum trade volume when you use a mini account. Although the standard trade size is 10,000 units, you are not limited to trading one lot. For instance, you can trade 10,000 units or even 200,000 units. Allowing that, as you become more seasoned and build up your confidence you can slowly increase the size of your positions to maximize profits. This ability to customize the size of the trade will allow you to have a better risk management of your money.

What Is A Mini Forex Account?

2006-10-14T12:15:00.000-07:00

Nowadays many people around the world is looking for entering the world of Forex trading due to its very high profitability potential and many other advantages the Forex market has over other capital markets.

But one of the main worries of the new trader is if he will need lots of money in order to be able to access this market and start placing trades.

In the Forex world there is something called a Mini Account, and it uses a different
leverage calculation than a regular (100k) account. This means that instead of
trading full-size currency lots (100,000 units), you'll trade in lots that are
just 1/10 the size (10,000 currency units), which in turn greatly reduces the amount
of money you risk in each trade you enter. Pips in a Mini Account are worth,
on average, $1 instead of the $8 to $10 value they have in a regular account.
The Mini Forex account offers up to a huge 200:1 leverage, this means that
just a $50 margin deposit will allow you to trade lots worth roughly $10,000,
but the smaller lot sizes, with correspondingly smaller pip values, means that
you'll be profiting less from a successful trade and also losing less if the
trade goes bad . For example, while a 20-pip loss on a 100,000 USD/JPY position
would be $200, the same loss on a 10,000 USD/JPY position in a Mini account would
amount to only $20.

The following are the characteristics of a Forex Mini Account.

- Minimum required account deposit = $300

- Recommended required account deposit = $2,000

- Traded in 10,000-unit currency lots

- Default Margin: set at 0.5% ($50 per mini-lot)

- Leverage up to = 200:1

Contrary to what you may be tempted to think, there is no downside
to trading a Forex mini account, you will be enjoying all the
benefits that full-size FX account holders enjoy; including, same
state-of-the art trading software from your broker, charts, resources,
and tools. This mini accounts are ideal for a new Forex trader to
develop a disciplined, rational forex trading strategy and technique
without excessively focusing on the fear naturally arising from thinking
too much about profits and losses.

One more great new for the starting forex trader is that there is no maximum
trade volume when you use a mini account.
Although the standard trade size is 10,000 units, you are not limited
to trading one lot. For instance, you can trade 10,000 units or even 200,000 units.
Allowing that, as you become more seasoned and build up your
confidence you can slowly increase the size of your positions to maximize profits.
This ability to customize the size of the trade will allow you to have a better risk management of your money.

Three Important Forex Concepts For New Traders.

2006-10-07T17:34:00.000-07:00

As you enter the world of Forex you will find yourself learning and using many new concepts that you may not have used or heard before.

Three of this important concepts that you must understand are what “Pips” are, What “Volume” is and what you do when “Buying” and “Selling Short”. They may look more like four concepts but Buying and Selling are like the two faces on the same coin so we can consider them as a single concept.

Lets first introduce what Pips are. Maybe you have heard or read already how many pips a day you can make using some trading system. In short, currency pairs prices will go out to 4 significant digits. For example; if one currency pair is trading for 1.3451 then an increase to 1.3452 would be a “one-pip” increase in the price of this particular currency. This is an increase of one hundredth of a percent of the value of the currency pair you are trading. And depending the type of account you have, regular or mini, each pip will have a value of $10 or $1. So if you make 10 pips a day with a regular account you would have made $100 and with a mini-account $10.

Now we can talk about the Volume; trading Volume is a quantity that tells traders how much money is being traded at one particular moment. And the forex market is known by its high volume of trading during most of the time markets are open. Some times there can be spikes in the volume during some type of news breaks and during the time New York stock exchange is open. The volume of transactions in Forex, even in a slow day, will always be much higher than the volume traded in other large exchanges at their full capacity.

Now maybe the most obvious of the concepts. Buying refers to the acquisition of a particular currency pair to open a trade. Selling short refers to the selling of a particular currency to open a trade. When you Buy, you are expecting the price of the currency pair to increase with time, i.e., you buy cheap to sell high. In the case of Selling short, it looks a bit more complicated. Here the way to make money is to initially sell a currency pair that you think will lose value in a given period of time and then, once it happened, you will buy it back at the new price but now you can sell it at the previous greater price the currency had when you opened the trade, so you earn the difference in prices. I know it seems kind of tricky, but once you are in front of your trading station it will look much simpler.

Understand well these three concepts and you will start with solid steps your trading career.

Introduction to Bollinger Bands; A Great Help In FOREX Trading.

2006-10-03T15:52:00.000-07:00

Forex trading has become one of the most looked after occupation for many persons around the world. This is due to its great advantages over other capital markets and its high potential profitability; among these advantages we can find its extremely easy accessibility thanks to the internet and its high liquidity and high leverage.

But in Forex as in all other speculative activities in the capital markets there is a major problem new and experienced traders will face every time they open their forex trading stations. This is how to predict the behavior of the Forex market over time in order to make the highest amount of profits and with the less risk possible.

One of the techniques used to predict the Forex market behavior is that based on Bollinger Bands.

These Bollinger Bands are what is called a technical trading tool used in the capital markets (including Forex) created by John Bollinger in the early 1980s. These technique was formulated based on the need for adaptive trading bands and the discovery that the volatility of the markets was a dynamic phenomena, not a static one as was widely believed at the time.

The first thing you should notice about Bollinger Bands is that they consist of a set of three curves drawn in a forex chart in relation to the currency prices. The middle band in the forex chart represents the intermediate-term trend, and it is usually a simple moving average, that serves as the reference base for the upper and lower bands. The interval separating the upper and lower bands from the middle band is calculated by using the volatility of the market; typically the standard deviation of the same data that were used for the average.

The default parameters used with these analysis technique is 20 periods for the average and two standard deviations for the gap between the bands. These parameters may be adjusted to suit your particular trading purposes.

In a future article I will talk about how these bands will give you a very good prediction on what the market will do next, based on the parameters and statistics built in the Bollinger Bands.

Short Introduction to Elliot Waves as a Resource in Forex Trading.

2006-10-02T11:57:00.000-07:00

The Forex market has the largest volume of trades per day among all the capital markets you can trade. This characteristic together with it’s high leverage and around the clock trading schedule makes Forex very attractive for traders around the world.

Once you enter the world of forex trading you will realize that this market has strong trends that seem to follow a repetitive pattern in all the different time frames you can use to analyze the market conditions.

Ralph Nelson Elliot also observed this and after analyzing a great number of charts he discovered in the late 1920’s that the markets move in a repetitive manner that is far away from being a totally chaotic behavior. The markets move in cycles and they reflect the mass psychology of the active elements participating in them, with a characteristic ebb and flow that can be divided and analyzed as “waves” of this active elements psychology in their daily dealing with the markets.

But Elliot not only discovered the repetitive nature of the markets cycles but he also realized that this patterns had a fractal nature. This means that the patterns not only repeated with time but that in a given period of time the characteristic wave pattern would repeat at different scales (days, hours, minutes).

The Elliot wave pattern can be divided in five constitutive waves with the first of the waves called the impulsive wave. The fractal nature if this waves was evident to Elliot when he observed that in every impulsive wave, when observed at a smaller time scale he would find the characteristic five waves of the pattern he had found and if he now looked at the impulsive wave of the smaller impulsive waves in an even smaller scale he would find again five ways, etc.

Elliot waves are very important in Forex because he identified the specific patterns that you can observe when trading this market and considering the repetitive nature of this patterns you can make a pretty accurate forecast of what the markets will do next. Giving you a huge advantage in your daily encounters with the currency markets.

What’s Fibonacci Forex Trading?

2006-09-30T16:55:00.000-07:00

Fibonacci forex trading is the basis of many forex trading systems used by a great number of professional forex brokers around the globe, and many billions of dollars are profitable traded every year based on these trading techniques.

Fibonacci was an Italian mathematician and he is best remembered by his world famous Fibonacci sequence, the definition of this sequence is that it’s formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13 ...But in the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc.

These ratios are mathematical proportions prevalent in many places and structures in nature, as well as in many man made creations.

Forex trading can greatly benefit from this mathematical proportions due to the fact that the oscillations observed in forex charts, where prices are visibly changing in an oscillatory pattern, follow Fibonacci ratios very closely as indicators of resistance and support levels; maybe not to the last cent, but so close as to be really amazing.

Fibonacci price points, or levels, for any forex currency pair can be calculated in advance so that the trader will know when to enter or exit the market if the prediction given by the Fibonacci forex day trading system he uses fulfills its predictions.

Many people tries to make this analysis overly complicated scaring away many new forex traders that are just beginning to understand how the forex market works and how to make a profit in it. But this is not how it has to be. I can’t say it’s a simple concept but it is quite understandable for any trader once he or she has grasped the basics and has had some practice trading using Fibonacci levels along with other secondary indicators that will help to improve the accuracy of the entry and exit point for every particular trade.

Free chapters of a forex day trading system can be downloaded at http://www.1-forex.com in case you are interested in learning more about Fibonacci forex trading.

Forex And The Anatomy Of An Elliot Wave

2006-09-29T12:22:00.000-07:00

As you enter the world of Forex you will immediately feel the basic need all Forex traders have: A method or technique to forecast the market behavior with the highest possible accuracy.

There are a number of methods and techniques that traders have researched through the years with this goal in mind. These techniques are based on different indicators and approaches to trading, and each one has had its own successes and positive outcomes when applied to specific market conditions, but there is no doubt that among the most successful of these techniques you will find Elliot Waves as one of the best concepts and methods you can learn.

Ralph Nelson Elliot observed that the markets have strong trends that seem to follow a repetitive pattern in all the different time frames you can trade and after analyzing a great number of charts he discovered in the late 1920’s that the markets move in a repetitive manner far away from a totally chaotic behavior.

He divided market movements into trends, corrections and sideways movements. With these distinctions being made he then assigned a wave terminology to these periodic movements; he called the trend movement an Impulsive Wave and a correction a Corrective Wave.

In order to have the formation of an impulsive wave we need five constituent waves “inside” this wave. This will be three waves in the direction of the trend and two corrections against the trend.

But considering the fractal nature of the waves found by Elliot, then each of the smaller impulsive waves will have itself other five waves “inside”.

In the case of the corrective waves they will be formed by other three smaller waves. Two in the direction of the correction and one in the direction of the trend.

Considering the repetitive nature of Elliot Waves you can make a pretty accurate forecast of what the markets will do next, with the huge advantage this represents in your daily encounters with the currency markets.

Comments on Forex and Trade Intervals.

2006-09-29T10:08:00.000-07:00

The Forex markets are open 24-hrs a day during most of the week, allowing forex traders a huge flexibility to enter their trades. And as long as the markets are open the prices will be constantly fluctuating as can be easily seen by looking at the forex charts. And it’s thanks to this fluctuations that traders can have profitable trades the whole day.

The charting software interprets the constantly changing prices by dividing this data into various time intervals. For each of these intervals the chart will show you the open and close price, along with the high and low price during the interval. Most software packages will allow you to see this price data by clicking on the spot of the chart where you want to check these values.

One very interesting feature of these forex charts is that they will allow you to choose the time interval under which you will be trading. You may look at charts with time intervals going from ticks, 1 min, 5 min, 10 min, 15 min, 30 min and 1 day.

What of these time intervals you use will depend mostly on the amount of time you want to spend monitoring your trade. For example if you want to monitor the trade for only a few hours you should use the 15 min charts. If you would like to enter a trade that will last for an entire day then you should better use the 30 min charts. And if you want to have a trade that stays open during days you should choose the 1 day charts.

Of course the lengths of the trades can vary, and the time interval you see is only a first approximation indicator of how long your trade will stay open.

One more issue with the length of the intervals is how much you will make, in average, per trade. The longer the interval the most profitable the trade will be compared with a short interval. But on the other hand shorter intervals allow for a greater number of trades that will compound and maybe surpass the profitability of the longer intervals.

An Introduction to Forex and Elliot Wave Degrees

2006-09-19T13:17:00.000-07:00

As a Forex trader you will always be attempting to make more profits than losses from the fluctuations of exchange rates between currencies in the forex market; in short, this is what is called forex trading.

And if you want to become a profitable forex trader you will need a good technique to forecast the market behavior with time; i.e., how the currencies value will fluctuate in the next period of time you are interested on trading.

One of the best techniques you can use to forecast the Forex markets is by using the Elliot Wave Theory.

Ralph Nelson Elliot also observed that the market has strong trends that seem to follow a repetitive pattern in all the different time frames; and after analyzing a great number of charts he discovered in the late 1920’s that the markets move in a repetitive manner that is far away from being a totally chaotic behavior.

And this was not all Elliot discovered; he also realized that this patterns had a fractal nature. This means that the patterns not only repeated with time but that in a given period of time the characteristic wave pattern would repeat at different scales (days, hours, minutes).

This is the most basic concept in Elliot’s theory; i.e., the largest wave structures are composed of smaller sub waves, and these in turn are composed of even smaller sub waves, and in principle this goes on to infinity.

Elliot gave a name to these wave structures calling them “wave degrees”, depending on the time frame you are looking at. The range of these degrees goes from centuries to hours.

Elliot distinguished Nine Wave Degrees in his studies, they are known as:

- Grand Supercycle

- Supercycle

- Cycle

- Primary

- Intermediate

- Minor

- Minute

- Minuette

- Sub Minute

In principle these degrees can go to infinity and they clearly show you can choose the time frame you like better, according to your trading objectives, and the patterns you will see will be the same in any of these time frames.

Some Reasons Why You Should Trade Forex and Two Important Forex Concepts You Must Know.

2006-09-18T16:10:00.000-07:00

These days everyone is talking about Forex trading and the great opportunity this activity represents for people willing to brake free from the corporate world and start working from home or any where else without losing their current lifestyle and even improving it.

Some of the great reasons why Forex trading is a great way of entering the capital markets is that is all 
commission-free and it has a low transaction cost. All the best forex brokers have these characteristics and
even Mini FX traders (i.e., traders starting with accounts having a capital as low as $250), who are just starting
in this field, can buy and sell currencies online always commission-free.

When trading the forex markets you don’t have to worry about fees you may have to pay to your broker;
there are also none of the usual fees to which futures and equity traders are accustomed to pay always;
no exchange or clearing fees, no NFA or SEC fees.

Over-the-counter currency trading involves a bid/ask spread and that’s how the brokers make money.
The good news is that the currency market is capable of offering you a round-the-clock
liquidity and this way you will receive tight, competitive spreads both in intra-day and night trades.

Now, once you enter the world of forex trading you will need to learn about two very important concepts.
These are; “Pips” and “Buying and Selling Short”. Let’s talk about “Pips” first. Currency pairs prices are
considered always to go out to 4 significant digits. For example; if one currency pair is trading 
for 1.3451 then if the price increases to 1.3452, that would be a “one-pip” increase in the price of this particular
currency pair  This is an increase of one hundredth of a percent of the value of the currency pair you are trading 
at the moment. And depending the type of account  you are using, regular or mini, each pip will have a value 
of $10 or $1.So if you make 10 pips a day with a regular account you would have made $100 and
with a mini-account $10.

The concept of “Buying” in Forex refers to the acquisition of a particular currency pair to open a trade and “Selling short” refers to the selling of a particular currency to open a trade, i.e, just the opposite. When you Buy, you are expecting the price of the currency pair to increase with time, i.e., you buy cheap to sell high; which is easy to understand. In the case of Selling short, it looks a bit more complicated. Here the way to make money is to initially sell a currency pair that you think will lose value in a given period of time and then, once it happened, you will buy it back at the new price but now you can sell it at the previous greater price the currency had when you opened the trade, so you earn the difference in prices. It may seem kind of tricky when you are starting, but once you are in front of your trading station it will look much simpler.

Fear And The Profitable Forex Trader.

2006-09-18T15:19:00.000-07:00

Forex trading is one of the most looked for occupations for many people these days. Around the world people is getting tired of fixed working hours and tight cubicles that limit their aspirations of a more relaxed and satisfying working life.

In order to start Forex trading the new trader doesn’t need a fortune or good Wall Street contacts that will let him become part of the chosen ones. The only thing the new forex trader needs is some starting capital (as low as $100, but an amount around $5000 would be more recommendable) and the free forex trading platform that will be provided by the Forex broker.

But one thing is to start Forex trading and other very different is becoming a profitable Forex trader. In order to become a profitable trader the new trader will immediately discover the imperative need of having an accurate knowledge of the markets and a good understanding of the forex technical indicators. Concepts as Moving Averages, Fibonacci levels, Bollinger Bands, etc; are the basic knowledge every trader must have.

This basic knowledge is indeed essential but once in front of the trading station, with real money on the line and with an open trade subject to the currency markets oscillations; things will start to get tricky even if the basic technical concepts of forex trading have been understood by the beginning and sometimes also by the experienced trader.

Knowledge will start to fade in front of one of the most basic instincts we humans beings have. Fear will ask for an entrance to the traders mind and if let in by the inexperienced trader, it will turn the making of critical decisions difficult and many bad trading moves may follow.

It is very natural to be afraid and let fear invade us if we are not really sure of what we are doing or we can not afford to lose even a cent in a bad trade; or seen in a different approach, the trader is so anxious and perfectionist that he won’t let him lose anything and will take it very seriously if he loses a trade.

Fear is one of the worst enemies of the Forex trader. In order to become a profitable trader it is essential that the person involved in trading understands that he must leave fear aside and stick to the trading plan he has constructed and arranged before, always understanding that losing trades happen to everyone and they are always part of a profitable trading career. A forex trader must learn how to profitable use his stops without heavily compromising the capital in his trading account, i.e., he must play safe but realizing that a calculated risk must be undertaken in order to maximize profits.

In short, fear is a natural emotion we all humans have given the right environment is present; therefore it is the trader’s obligation not to arrange a “fear environment” around him and be psychologically prepared for the ups and downs of the trade. No one is prefect and that’s an even deeper truth in forex trading.

Comments on Forex Trading Account Sizes, Lots and Margin Calls.

2006-06-20T19:08:00.000-07:00

Forex trading is one of the best business opportunities you can think of joining these days. No other market in the world allows the â€œLeverageâ€ that the profitable world of currency-trading does. Leverage is all about margin trading. In the Forex market, it is essentially the ratio of the amount used in a trade to the required security deposit needed, by the particular broker you chose to use, for that trade.
Normally, for most brokerages, a margin deposit of just $1,000 allows you to control a $100,000 position in the Forex market. That's 100:1 leverage, or 1%. Or, said in a different way, a â€œregular full-sized accountâ€, sometimes referred to as a 100k account, allows you to trade with lot sizes equal to $100,000. Each lot is worth $100,000 in currency. So It would only require $1,000 to trade one lot.
This great feature in Forex trading is what makes this market the hottest market to trade in right now. The Forex broker has given you a loan of $99,000 dollars secured only by your $1,000! This is a huge loan and, as you may know by now, this is what allows traders to make extraordinary incomes in this market. And, as you also are probably used to hearing , "leverage is a two-edged sword" , it is what can cause you to lose a lot of money if you trade without rules or Stop-loss orders.
But just as an example, let's say you were a person that likes to trade with reckless abandon, i.e., with no strategy, no common sense, no money- management principles, etc. Thatâ€™s never recommended for anyone, but being a Forex trader has such great advantages, that even someone with a trading mind like the one described before, will never lose more than what he has placed into a trade. Unlike Futures (Commodity Trading), the market that most people associate with High leverage, you can never have a debit balance when trading Forex. So, despite the greater leverage associated with FX trading, it is still arguably less risky than futures trading. Futures markets are often prone to sudden and dramatic moves, against which you canâ€™t protect yourself, even by trading with protective stops. Your position may be liquidated at a loss, and youâ€™ll be liable for any resulting deficit in the account. But because of the Forex markets great liquidity and 24-hour, continuous trading, dangerous trading gaps and limit moves are very unprobable. Orders are executed quickly, without slippage or partial fills, which is just great. And as it was not enough, there are no margin calls, for your protection, the forex broker's trading platform will automatically close out some or all of your open positions if your account equity, meaning the total floating value of the account, falls below the level required to hold the positions. Think of this as a final, automatic stop, always working on your behalf to prevent a debit balance.

Forex Trading