It has become imperative for every forex trader to learn how to predict the price trend and which method or software is the best.

When you do forex trading, it is very important to understand the difference between fundamental analysis and technical analysis. A quick explanation of the difference among the two types of analysis is: fundamental analysis focuses on money policy, government policy and economic indicators such as GDP, exports, imports etc within a business cycle framework while technical analysis focuses on price action and market behavior, especially on chart and technical indicators.

Needless to say both schools are equally disparaging about the other, and both believe their techniques are infinitely superior. But the reality is that it has become increasingly difficult to be a purist of either persuasion. Fundamentalists need to keep an eye on the various signals derived from the price action on charts, while few technicians can afford to completely ignore impending economic data, critical political decisions or the myriad of societal issues that influence prices.

Genarally speaking, fundamental analysis can only judge which direction the market will move, and technical analysis can supply both direction and rough currency rate.

Keeping in mind that the financial underpinnings of any country, trading bloc or multinational industry takes into account many factors, including social, political and economic influences, staying on top of an extremely fluid fundamental picture can be challenging. Meanwhile, forecasting models are as numerous and varied as the traders and market buffs that create them. Different people can look at the exact same data and come up with two completely different conclusions about how the market will be influenced by it. At the end, some may make huge profit and some lose their money. You can not say fundamental analysis is easy.

Remember, fundamental analysis is a very effective way to forecast economic conditions, but not necessarily exact market prices. For example, when analyzing an economist’s forecast of the upcoming GDP or employment report, you begin to get a fairly clear picture of the general health of the economy and the forces at work behind it. However, you’ll need to come up with a precise method as to how best to translate this information into entry and exit points for a particular trading strategy.

Give you a tip,if you are new to do forex trading and not trade frequently, you can mainly use fundamental analysis for your trading.

Don’t disturb yourself by information overload. Sometimes traders fall into this trap and are unable to pull the trigger on a trade. Normally, your first feel is the answer for you to do forex trading. At that time, you are sure which currency is strong and which country’s economy is good. The more simple, the more useful.

However, trading a particular market without knowing a great deal about the exact nature of its underlying elements is unbelievable. You might get lucky and snare a few on occasion but it’s not the best approach over the long haul.

For forex traders, the fundamentals are everything that makes a country tick. From interest rates and central bank policy to natural disasters, the fundamentals are a dynamic mix of distinct plans, erratic behaviors and unforeseen events.

Therefore, it is very important to understand fundamental analysis and use them on forex trading. Visit SoloInvest and Forexmentor to know more.

About the Author

Bing Zou is the blogger of Make Money Online, Online Investment and New Lifestyle. Featured information for you to work at home and make money online. You can contact him at email:paulzou@yahoo.com

Fundamental Analysis On Forex Trading   by Bing Zou

A trading course allows you to make the right trade decisions and to build up the kind of dealing strategy which is central to any investor’s success. There has been a great deal of research in to this kind of investment and a fair amount of technical information is available to help you proceed. While much of it may be second-nature to the most experienced and educated, it is essential for a beginner to take note.

A good Forex trading course will mentor your progress at every step through the expansion and development of your trading knowledge. It will equip you with the practical skills and intellectual prowess you need before making those first moves into the Forex marketplace. It will also introduce you to the foreign exchange trading software, which will give you a taste of how your Forex trading account will operate and allow you to gain the right level of self-belief before starting out. Investment should, at least in the early part of your career, be a relatively simple painless experience.

Some courses offer a ‘virtual-money’ trial run, in order for consumers to put their new-found skills into practise as soon as they complete the course. Some even boast of home-from-home training centres with every amenity you might require. This is to help you make a move into investment which feels as simple and comfortable as possible. Essentially, however, a good trading course never loses sight of the most important tools of investment.

Essentially, you must know your market. A jungle to most newcomers, your market must become your best friend if you are to succeed. Secondly, the principles of currency trading must become second-nature. From there, you should be able to carry out basic analysis of any fluctuation and act accordingly. Of course, a Forex course will also help you to implement successful money management plans, all part of the skill-set of the best investors. In addition to every tool and resource you could hope for, a course will introduce you to the psychological aspects of the business, how to ‘read’ an opposing investor and hold your nerve for best results.

Margaret Dorsey has over 35 years experience in the legal field and she has been an active member of the Forex Trading Education and Trading Course community since 2005. http://innerfocus.tradingpostfx.net

Tag: forex training, forex trading course, forex trading strategy, forex trading education, learn forex, currency exchange

Forex Trading Course – Currency Exchange Made Easy by MARGARET DORSEY

Fast easy money is far from the truth when it comes to the stock market. But you can make money in the stock market. Slow and easy is the way to go, and if you start at an early age, a fast and easy retirement
is a reality.

Beginners at stock trading should take the time to get the education they need in order to succeed. You do not see a surgeon pick up a knife and become good at surgery overnight. It takes time and knowledge to be good at anything in life.

To begin with, make sure you understand How The Stock Market Works. Start with the basics and work your way up. You did not pick up a book one day and start to read, first you learned the letters of the alphabet.

Decide how you are going to trade. Making this decision is going to tell you what you need to be reading to learn about it. Are you going to scalp, day trade, swing trade, or buy and hold for the long run.

Scalping involves buying large quantities of shares in a stock, and you are just looking for a small move in the stock price. Day trading is similar to scalping but you are looking for bigger moves in the price, and you do not hold the stock overnight.

Swing trading is when you buy a stock and hold it for a short period of time looking for a substantial move in the price. Buy and hold is when you plan on holding on to the stock for a long time. You believe the company is going to grow in value and the price is going to go much higher.

Next you will need to understand what fundamental analysis and technical analysis is:

Fundamental analysis relies on economic supply and demand information, such as a stocks annual growth rate, and quarterly earnings. This can be very time consuming reading each company’s financial reports.

Their is a paper called Investors Business Daily to help with this. If you are going to be trading in the markets you should not be with out this paper. Technical analysis is the study of time, price, and sentiment. The tool used for this is charts.

Charts show a stocks price history, and with practice we can see everything we need to know about a stock, just by looking at the chart.

The next thing you are going to need is a Stock Trading System. When you go on a vacation you do not just jump in the car and go. You look at a map, decide when you are going to leave, when you are going to start to head home etc.

The same is true with the stock market. Many beginners jump in without a plan, you must have a plan in place, why and when you are going to enter the trade, when you are going to get out, and you must stick to the plan.

Practice trading on paper before you open an account to see how well you are doing. Once you are doing good on paper then it is time for the real deal.

Now you are going to need money to start trading stocks with. Do not get into the markets with money you can not afford to lose. If you have to set some money aside a little at a time until you have enough saved, then do it.

Even though you went ahead and got the knowledge you need to start trading, does not mean you are going to be a success at the get go. It is going to take some time, and you will lose some money. That is why you don’t start trading with the rent money.

The stock market for beginners might seem hard at the beginning, but once you learn the basics, you will be well on your way to becoming wealthy.

Stock Market For Beginners can learn more about the markets and trading here Stock Market Trading

Stock Trading Information

The thrill and rush of excitement caused by a few successful trades can be intoxicating and leave you wanting more-a lot more! Still, the heart of any investment strategy centers around putting the odds of success in your favor and overtrading in the Forex market can undermine even the best of strategies. Forex is a very volatile market and most investors would be wise to follow the advice of Jimmy Rogers, a famous and successful trader who is quoted as saying, “One of the best rules that anyone can learn…is to do nothing.”

One of the biggest mistakes that an investor can make is to allow fear or greed to govern the decision-making process. Fear causes investors to close positions too early or to stop opening positions altogether. While fear limits the potential for profit, greed opens up the door to huge and staggering losses. Chasing profits due to fear causes investors to keep a position longer than they should have or to spread themselves too thin. Inevitably, market volatility will swing in the wrong direction and an investor can lose everything!

Risk Management

Any time an investor opens a position there will be risk. The market is always right while even the best of investors are only right part of the time. Each and every position should have a stop/loss order attached to it. Stop orders will limit risk and protect the investor from riding a losing trend too long. Plus, when the order is in place and adhered to, there is no reason at all to trade unless the stop has been triggered so they will also help reduce the tendency to over trade.

Especially for investors new to the Forex, stops can be triggered often in the early going. Now while an investor wants the stop to be effective and limit loss, it is important that it not be triggered too early or profit opportunities will be lost. An effective investment strategy may take some time to “dial in” so don’t be surprised if the stops are initially set too tight (or close to the opening price) and are triggered prematurely.

It is very possible that a trading account will have a negative balance in the early going. However, with patience and better placement of stops, an effective investment strategy will begin to win out and be profitable. One of the worst mistakes that beginning investors make is to try and “make up for” a loss by getting out there and investing immediately. If your stops are not set properly, however, this additional investment may be little more than another chance to lose more money.

No Forex investment strategy will work every single time because the market is simply too big and too volatile for anyone to predict with 100% accuracy. Investing too often in the Forex, however, is almost certainly a recipe for disaster while being patient, setting effective stops, and continually testing your strategy will ultimately bring you the profits you seek.

Forex-trade Too Often, Lose Too Often! / Kent Douglas

Article by Kent Douglas, author of “The Simple Forex Solution: The Easiest Currency Trading System Anywhere.” To learn how you too can succeed in Forex and Currency Trading, please visit http://www.SimpleForexSolution.com

There is an old adage connected to online forex and stock trading. It goes some what like this If you are inexperienced and have money and meet an experienced trader, but without money, you are likely to end up with experience and the experienced trader your money. There can be some semblance of truth in this but what this infers is trading without experience and strong fundamental knowledge of the market is an invitation to loss making.

Online Forex Trading Tutorial
There are several reputed online forex trading houses that cater to retail investors and traders. The same trading houses offer to train their prospective and existing clients on the nitty gritties of online forex trading most of the times free of cost.

What You Need To Learn About Online Forex Trading?
If you are a novice you need to start from the beginning. The macro economic factors that affect price volatility and the demand and supply of currencies that trigger the short term fluctuations which are your trading opportunities and most importantly the points of entry and exits form the basis of your learning.

Most of the online forex trading tutorials available require you to open a cost free demo/practice account so that you get exposure to either real time or simulated environment for better understanding.

Online Forex Trading Tutorial Curricula
You will see that, generally all the tutorials have more or less the same curricula. Basically speculations are made through a number of charts and indicators.
Chart Types:
1. Line chart
2. Bar chart
3. Candle stick chart

All these charts are price plots for selected periods. Then there are several indicators that help make decision. The important and most followed ones are

1. Average true range (ATR)
2. BOLLINGER BAND
3. Commodity Channel Index
4. Linear Regression
5. MACD
6. Momentum
7. Moving average
8. Parabolic time price
9. (ROC)Rate of Change
10. Relative Strength Index
11. Slow Stochastic
12. Standard Deviation
13. Stochastic

All charts and indicators are taught with sufficient demonstrations for self study. The tutorials deal with the patterns and formations made by charts/indicators and what they mean. While charts help you for short term speculative trading (technical analysis) they don’t concentrate on the underlying reasons for price movements. This is the ground for fundamental analysis. The study of macroeconomic factors such as changes in government policies, wars etc that influence supply and demand, and as a consequence prices, constitute the fundamental analysis. These things are illustrated in contrast with demonstrative price movements.

Online forex trading tutorial helps gain a lot for everyone who takes it.

Online Forex Trading Tutorial / Jason Uvios

Jason Uvios writes about “Online Forex Trading Tutorial” to visit : foreign currency trading, foreign pharmacy and foreign currency.

The rollover is the arrangement of artificially postponing the actual delivery settlement of a currency in position by normally a day. In actual practice, ideally all traders are required to take or give delivery of the currency they bought or sold (settlement) on the second business day after the deal was closed. But the actual practice differs by way of artificially extending the settlement day. But this rollover differs in the forex trading parlance fom that of stock trading.

It can be fairly well assumed that most of the forex trading accounts are leveraged with the broker having extended the trader a loan for the day which is the exposure limit. At the closing every day theoretical closing; though- at 21:59 London time, traders need to close their position unless they actually want to take or give delivery of their positional currency. But due to the loan leverage the traders account will not be having that kind of capital that enables him to take delivery of the currency.

Brokers have a stated policy of closing all accounts at that precise time and almost instantaneously open a new account for the quantity of that currency pair at the corresponding rate. This means although the account has been closed theoretically, the positions are still open from the traders’ perspective. This effectively means hat he traders do not have to take or give delivery nor do they have to payback the loan extended to them.

Broker, on the other hand charges an overnight interest for the amount rolled over. How is the differential interest calculated by the broker? Assume that you have a 1 lot position of euro/dollar with euro being your long position. If during the trading day the dollar appreciates by 25 pips and the broker rolled over your position to the next trading day at the close with dollar having further appreciated by another pip overnight, this 1 pip is the difference in interest between the two currencies. So you pay this 1 pip premium to the broker.

On the other hand if you were short on euro and long on dollars you would gain that differential interest amount. To put things in perspective, if you bought a currency and it gained overnight you are to benefit by that incremental differential and if the reverse were to happen, you have to pay this to the broker.

In actual practice, all rollovers and overnight interests are automatically calculated and credited or debited to your account by the broker. For tax purposes, IRS treats the interest gained or paid separately.

Rollover in Forex Trading / Jason Uvios

Jason Uvios writes about “Rollover in Forex Trading” to visit:forex, online forex trading and forex broker.

Give a thought to this: what makes the forex market so unique that none other like equities, commodities or even the bond market can match either individually or all put together? I think everyone who wishes to have a share worth his or her salt of action in the forex market needs to know this.

The Unique Characteristics of Forex Market
Forex market allows trading in all major world currencies seamlessly. US Dollar, Euro, Japanese Yen and Great Britain Pounds are the few currencies that account for over 80% of the daily forex trade. Now let’s see what other features attribute to make this so unique.

1. There is no single exchange market for trading foreign currencies yet all of them are so closely connected to each other (‘over the counter’ trading) that the differences in values can hardly be considerable, at least, for a retail trader.

2. There is no commission involved in the foreign exchange trading although there is low transaction costs involved. One reason for this feature is you are trading currencies and not negotiable instruments which are always virtual in nature at the point of trade time.

3. Forex market has a continuous nature. Global time zones and universal nature of currencies have facilitated the continuous nature of this. When markets in Asia close European markets open and when they close there is American market to take over. The next cycle begins with the Asian markets taking over from American markets.

4. Largest daily turnover- over US Dollar 3 billion which is ten times bigger than turnovers for all equity exchange markets put together.

Ponder the point number one again; London, New York and Tokyo are the top trading markets with many smaller markets and countless banks and operators functioning across the globe in relativity and interconnection to these big three. Thanks to the continuous nature and ‘over the counter’ trading facilitates quick decision making for traders without waiting for the markets to open the next day.

‘Over the counter’ trading also brings in the benefit of arbitrage (overnight differential interest) since there is no single dollar rate over the world depending on significantly great number of factors that affect the local Dollar demand and the local economy. Beginners need to understand the mechanics of economy that play roles here. These factors include the GDP, budget, trade deficits, rate of interests and inflation amongst other macro economic issues.

An interesting piece of information: regardless of trends, US Dollar is involved in about 90% of transactions.

Unique Characteristics of Forex Market / Jason Uvios

Jason Uvios writes about “Unique Characteristics of Forex Market ” to visit: forex currency trading, forex trader and forex market.

The Vast Internet Trading Market

“Pitfalls Of Internet Trading” The internet has brought the speed, power, and wealth of possibilities of internet trading right into our living rooms. The online trading craze has brought the power of day trading to a whole new level and never before has so much access and opportunity been possible.

The trend caught on like wildfire and spread throughout fledgling internet communities and grew into a basic of acceptable trading strategy within a few short years. The protocol for day trading had changed, and while there was a small percentage of die hard brokerage buyers, most people grew to love the advancements. They loved the advancements so much that a lot of people never slowed down to discover the pitfalls of internet trading until after they had lost large sums of money.

Internet trading had developed wealth for some people in a very short amount of time while for others who leaped before looking it proved to be their greatest downfall. Just like everything else in history, should you choose to not learn from it then you are condemned to repeat it. Learning the “pitfalls of internet trading” from the mistake of others is like paying attention in history class.

Fast Trades “Pitfalls Of Internet Trading”

The internet has brought about an era of lightening fast trades. The speed of which trades can be executed is actually misleading. Some people believe that because the speed of executed trades has dramatically increased that there is a magical formula that means your mouse cursor now has the power to buy and sell stocks on an immediate basis. This is not an accurate overview of the speed of executed trades.

Your mouse clicks to an order that is still connected to a broker. The speed of executed trades hasn’t really increased, it’s the speed in which we communicate with brokers that has increased. The broker receives you order immediately and then he runs about doing his job which is finding you the absolute best price for your order in the shortest amount of time possible. There is still time for the market to fluctuate during this time, sometimes even drastically depending on what you’re trading.

To help prevent error related to the speed of executed trades, it is recommended that you use a limit order to protect yourself from loss while your broker is running about doing his job. A limit order limits the cost that your broker is permitted to buy your stock so that any fluctuations on the market can not compensate for your original decision.

Low Commissions “Pitfalls Of Internet Trading”

The internet revolution has also changed how much we compensate our brokers. We have ultimately made their jobs easier and thus an internet broker can expect his commissions to decline. At the same time he is capable of executing more trades on his clients’ behalf so he has the opportunity to make more money than before.

What some people fail to realize is that there is still a commission. Since you are still requesting a broker fulfill your needs he still gets his share. The low commission structure of online brokering does contribute to the benefits of online trading, but beware when choosing a broker that the low commission structure doesn’t interfere with the broker’s ability to provide a good service for you.

Not all brokers were happy with the notion of a lowered commission structure for online trades. Just like anyone else trying to make a living, brokers are busy chasing the big fish and often leave the little fish hanging out to dry. While it is human nature to attempt to earn the most money possible for your time, the lower commission structure of internet trading has led to poorer service for the small investor in some firms.

Other firms however, seem to understand there is great potential for remarkable profits even with the lower commission structure. Where else can you pause once an hour, gather up several small investor trades, spend ten minutes executing the trades and then return to the larger investors’ needs. These small commissions can add thousand of dollars to a weekly commission check.

Specialty Brokers “Pitfalls Of Internet Trading”

Once upon a time, a brokerage firm could choose its specialty and sometimes even land higher commissions based on their trading specialty. Online trading has led to remarkable competition among firms and no longer do day traders really utilize a specialty. Most investors are looking for the convenience of executing all their trades with one broker instead of carrying different accounts with various brokers for various trades.

Now there are numerous commodities brokers executing forex trades and forex traders who are trying to trade penny stocks. In the beginning of the internet revolution of online trading, specialty brokers who were trading in everything without being properly equipped were costing their clients quite a bit of money. Over the years training has become much more intensive and most brokers are no longer interested in carrying a specialty. Use caution when finding an internet broker. While a specialty broker may very well come in handy if the only thing you are interested in trading are penny stocks, however over time most investors want at least a little diversity in their portfolio.

Specialty brokers still have their place among internet trading. They can be a wonderful asset to a company who want their clients’ special needs addressed by an expert. Most trading firms do not restrict their specialty brokers to just their specialty.

There are a few firms who carry only specialty brokers. In these firms, the specialty brokers are restricted to their specialty and any orders that come in are divided up among the specialty brokers in order to maximize their talents. This idea is quite effective although these firms lose time in their rate of execution.

Brokerage Firms “Pitfalls Of Internet Trading”

Choosing a brokerage firm does not have to be an insurmountable achievement. A little bit of homework can determine whether an online brokerage firm can handle your needs. Asking a few basic questions can go a long way in determining whether an online brokerage firm is what you are looking for.

We already covered the pros and cons of specialty brokers. Understanding your own financial goals will help to determine whether you are interested in trading with a specialty broker or not. If the only stock that interests you is commodities then you may want to choose a specialty broker. If you want something more diversified then you probably want to go with a firm that requires a more rounded education from their brokers.

When comparing commission rates remember that the lowest is not always the best. While there is something to be said for you get what you pay for, find out what it is you are getting when you are paying. Are the commissions flat rates or are they based on the size of your trade? A struggling firm may suddenly have a commission “sale” and drop their commissions to nothing for a period of time. Use your own discretion before deciding this is a good opportunity. Look at their trading history. Is this just a promotion to get them over a hump or have they been continuously struggling?

Read the fine print when it comes to the firm’s policy on executing enter and cancel orders. A bad policy is bound to cost you money. Read the fine print on the firm’s policies on broker mistakes, web site crashes, and of course, margin accounts.

How accurate is the information you are receiving either via e-mail or ticker bar? Are the stocks quotes in real time or do they have a delay? Does the broker send blanket e-mail notifications (most do) or are they tailored to the type of investments you are interested in?

The basic answers to these questions can determine whether a firm is right for you. Remember that you will most likely never talk to an actual person so all of this information should be readily available right on the website. Online trading does not offer the personal touch of a traditional brokerage firm. Don’t expect phone calls from your broker to discuss your portfolio. If you are uncomfortable being a faceless number instead of a unique investor, online trading is not something you are likely to be satisfied with.

Online trading has its distinct advantages and disadvantages. Most people who transition from a tradition broker to the convenience and speed of online trading are quite happy with the principle even if they find themselves dissatisfied with the firm. You can eliminate the disappointing firm experience by doing your share of due diligence before proceeding.

If you are still hunting more in depth information regarding online trading I recommend the website for unbiased reporting on online investing. Onlinetradingideas provides accurate and unsolicited information regarding online trading and navigating the world of online finance. The website is dedicated to educating the beginning and average investor in order to create personal success and financial health. Onlinetradingideas is a valuable resource in your journey towards personal investing independence. Be aware of the “Pitfalls Of Internet Trading”and avoide them if you can AT ANY COST.

Pitfalls Of Internet Trading / Bobby Ryatt

Bobby Ryatt, If you enjoyed reading this articles, then go to my website where I have lots more on the subject. You will have free to use material and tips, No more guessing or taking risks after this. http://www.onlinetradingideas.com http://onlinetradingideas.blogspot.com

Here’s is where we start to have some fun. Regardless of how you want to trade the markets you need an approach. It might be spinning a bottle, asking your Aunt Jenny what she thinks or just gut feel. However you do it, even though you may not think so, you have an approach.

The majority of traders will eventually use some form of technical analysis (also known as chart traders, market technicians and chartists). For every book that there is on making money trading there is probably an opposite book explaining why it can’t be done. Before you dismiss the last statement out of hand. Lets explore the argument that no matter what you do you can’t beat the market.

Rectangles can occur in any time frame and any market you are following. As with many chart patterns the pattern is in the eye of the beholder. I have found that some traders are better than others at identifying chart patterns. It may take some time before you can spot the most common patterns.

The rectangle contains price movement between two points in a rectangular shape to which we add lines to signify the upper boundary and lower boundary. These lines should be horizontal. Slanted rectangle will most probably fall into the realm of “Flags”, which we will discus in another lesson.

The top line should connect at least two bars and the bottom line should connect at least two bars. As most markets are in congestion most of the time rectangles are fairly common.

It is not necessary to draw the top and lower lines at the extreme of the congestion points but rather make sure the lines contain at least 95% of the congestion area. The longer the rectangle continues the more important the breakout.

To help identify a valid breakout there should be an increase in volume on the day (or time period) of the breakout. The breakout can occur in either direction but if you are in a defined up trend then an upside breakout is favored and vise versa for a down trend. If I am in a defined trend then I tend to view this pattern as a continuation patter unless it starts to break the other way.

There are a number of ways to trade the rectangle. You can buy or sell the breakout as it happens or you can wait to see if there is a pullback to the neckline. Once you have defined the rectangle you can also buy and sell at the boundaries of the rectangle. I prefer to buy at the lower boundary if in an up trend and sell at the upper boundary if in a down trend. This can be a very effective trade as the risk is small. If you sell at the upper boundary then your stop loss can be close to the boundary and vise versa for the long trade at the lower boundary.

If you sell the breakout place your protective stop inside the rectangle and do the same for buying the upside breakout. You can also measure the distance between the upper and lower boundaries and project the distance forward to get an indication of the size of the next move. If the distance from the upper to the lower boundary were 20 ticks then I would expect the next move to be at least 20 ticks.

Understanding Rectangles on Forex / Martin Chandra

Martin Chandra is a full-time investor. Learn more at here.

The two period reversal is originally taken from the 2-day reversal pattern and as the name implies this particular pattern consists of two periods. I use two periods and I apply this pattern to all securities and time frames. A period could be 1 minute or 1 month depending on the time frame you are looking at. I like to see this pattern after a strong move up or down. It does not work in periods of consolidation.

For the two period reversal down, the first period should be at the end of a strong move up. The close should be near the high and it is preferable that this high should be a new recent high. The second period should open near where the first period closed and should lose most if not all of the first periods gains and close near the low of the first period.

This is the set up and you are now ready for the trade. Once the second period has closed you can enter short the market with a stop loss order just above the first or second periods high depending on which is higher. If the trade is to work is should not retrace back above the high of the two periods.

For the two period reversals up, the first period should be at the end of a strong down move. The close should be near the low of that period and it is preferable that this low is a new recent low. The second period should open near the close of the first period and should regain most if not all of the first periods losses and close near the high of the first period.

Once set up you can now enter the market long with a stop loss order below the low of the lowest low of the two periods. With both the up and down reversal there may be some retracement before the trade takes off but it should not pass below the low of the two periods or the high of the two periods depending on which direction you are trading.

I have found this trade to have a high probability of success, it does not however happen that frequently in the markets I have observed. It does however happen with sufficient frequency to have it on your list of set ups to look out for.

Forex Basic: Two Period Reversal Pattern / Martin Chandra

Martin Chandra is a full-time investor. Get limited offers at here.

Outside days can occur frequently on daily charts. The secret of the outside day is the bigger the better and it has more meaning if found at the end of a trend.

They can be short lived and I always take my profit quickly. The outside day (OD) should completely encompass the previous day. It must have a higher high than the previous day and a lower low than the previous day.

One of the most important things about this pattern is that the bar closes in the opposite direction of the trend. If the trend is down the close on the OD must be near the high or in the upper part of the bar. The opposite is true of the up trend. The OD may still work if this is not the case but my research show that it is more effective if it does close in the opposite direction.

I like to trade this in two ways. First, depending on what the market has been doing prior to the outside day I will place a entry order a few ticks above the high of the OD if the trend has been down and I am looking to get long. Once I am in the market I will place my stop loss either as a dollar amount or at the .618 fibonacci retracement of the OD.

If you don’t know anything about fibonacci don’t worry, we will cover that in future lessons. The same applies to the short trade. If the OD occurred at the end of an up trend and I am trying to get short, I will place my entry order a few ticks below the low of the OD. Once taken short I will place my stop loss order in the same way as the long trade, either as a dollar amount or as the .618 fibonacci retracement.

The second way I like to trade this pattern is to trade it intraday. I closely monitor what happens at the high of the OD if I intend to go long and the low of the OD if I intend to go short.

Once the high or low has been taken as the case may be I will then enter the market on a 5 minute or 1 minute chart. For long position I will buy the first retracement with a tight stop loss order under an intraday support and if trying to get short I will sell the first rally with a stop loss order above an intraday resistance.

Forex Basic: Outside Days / Martin Chandra

Martin Chandra is a full-time investor. Get limited offers at here.

Those of you who have been trading for a while will be familiar with Pivot Points. During this lesson I want to go over how to find a Pivot Point and also a slightly different method of using them. First let’s look at how you calculate a Pivot Point.

Using a bar chart you will observe that each bar has an Open, High, Low and Close. This information represents all price activity during that particular period.

In the case of the following example, we shall use a daily bar. To calculate the pivot point all you need to do is add the High, Low and Close. Once this has been done you next divide the total by three, e.g. the cash FTSE on the 2nd May 02 had a High of 5192.70, a low of 5125.50, and a close of 5174.10. If you add the three together, you get 15492.3. You then divide that total by three to get a Pivot Point of 5164.10.

OK, so far so good, but what do you do with this information? Well, one technique I like to use intra day is to use the pivot point as a trend indicator. We already know that the Pivot Point for the 2nd May was 5164.10 and we will use this the next day as an intra day trend indicator.

If the price is above 5164.10, then I would only be long and if it were below 5164.10, I would only be short.

As price can fluctuate around any given point I also add a further proviso. If I have support close to 5164.10, I will first wait for the price to pass through 5164.10 and support before entering short. If I have resistance close to 5164.10, I will first wait for the price to move through the Pivot Point and resistance before entering long.

This method becomes even more powerful when the Pivot Point is close to the opening price. If, for example, the opening price is 5174.10, the Pivot Point is 5164.10, and I eventually go short at 5155, I can stay short the whole day as long as it does not go above the Pivot Point.

Once in a position I normally have a very tight stop to begin with and then will follow the market with a trailing stop to lock in profits.

Another way I like to add Pivot Points to my analysis is for more long-term projections. I will use the Pivot Point of a Yearly, Monthly and Weekly chart. In this case it would be the High, Low and Close of the previous Year, Month and Week.

I like to think of the weekly Pivot Point as the short-term trend, the monthly as the medium term trend and the Yearly as the long-term trend. I find this particularly useful in Spot Forex. If I am below the yearly, monthly and weekly Pivot Point, I know I am in a strong down trend and I can scale into multiple positions over time. The same holds true for long positions.

The point is there are many ways to determine trend. You can also use Pivot Point to find potential Support and Resistance, which we will cover in later lessons.

Experiment with Pivot Points and see if it suits your trading style. At the very least it is always handy to know where they are and it may help you decide which side of the market you should be trading from.

Forex Trading Pivot Points / Martin Chandra

Martin Chandra is a full-time investor. To learn more about pivot points, go to here.

How difficult is it to make money trading the Forex market
? How much time does it take to actually be able to make a living trading the Forex market? These and other important aspects of trading are to be discussed in this article.

Always Place Stop-Loss Orders

The most common and important risk management tool in forex trading is the Stop-Loss order.

A Stop-Loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses should the market move against your position.

We recommend you always place a Stop-Loss order immediately after a new position is opened, as it can be very tempting to overrun losses on losing trades if a Stop-Loss order hasn’t been placed.

So often have I seen situations where a novice trader is 500 points out of the money
when he only intended to make or lose 50! By not placing a Stop-Loss order the trader has lost much more than planned, and the Risk/Reward Ratio is exceedingly poor.

In order to avoid this scenario you must follow a simple rule – Always place Stop-Loss orders, liquidity of the Forex market ensures Stop-Loss orders can be easily executed.

Usually Place Take-Profit Orders

Aswell as placing Stop-Loss orders, we recommend in most cases to enter Take-Profit orders at the same time using the OCO order function that most trading systems now have. The reason for this is similar to that for placing Stop-Loss orders.

Whereas with losing positions it can be very tempting to overrun losses, with winning positions it can be just as tempting to lock in a profit too early. By placing limits you will eliminate the risk of not being patient enough and taking profit too early.

However, you may feel confident in your ability not to profit take too early, prefering to monitor the market and taking profit at an opportune moment. In this case placing only a Stop-Loss order is an option.

Positive Risk/Reward Ratio

You should always trade using a positive Risk/Reward Ratio. By a positive Risk/Reward ratio we mean “The amount you’re willing to make on a trade should be more than or equal to the amount you’re willing to lose”.

All successful traders trade using a positive Risk/Reward ratio. There is no sense in having five 30 pip winning trades, and then one 200 pip losing trade because at the end of the day you are 50 pips down!

Unfortunately, many novice and unsuccessful traders use a negative Risk/Reward ratio. When trading this way losing positions are always going to be greater than profitable ones, and it can be difficult to recoup the losses in the short term.

It is not uncommon for unsuccessful traders to increase trade size in order to recoup losses quickly, therefore greatly increasing trading risk relative to trading equity.

This is a recipe for disaster, you must trade with consistancy and control. The easiest way to manage your Risk/Reward is to use the Stop-Loss and Take-Profit orders mentioned above.

Overtrading

Some online forex brokers now offer 3 to 5 pip spreads in the liquid currencies such as EUR/USD and USD/JPY. These are very competitive prices which a few years ago were unthinkable. As recently as the mid 1990′s brokers were quoting 10 pip spreads in the major currencies plus a commission!

Thankfully due to the internet, the current boom in Forex trading and the competition between Forex brokers, those days are well and truly over.

The excellent value available from trading on tight spreads works very much to the traders advantage. However, you should avoid overtrading and entering trades for just a 5-10 pip profit or loss. Even trading this way on 3 pip spreads can adversely affect your profitability.

Below are examples of both a winning trade and losing trade when trading for a 10 pip profit or loss:

Winning Trade:

Buy EUR/USD at 1.2020 (price = 17/20)
Sell EUR/USD at 1.2030 (price = 30/33)
Market moves 13 pips before taking profit

Losing Trade:

Buy EUR/USD at 1.2020 (price = 17/20)
Sell EUR/USD at 1.2010 (price = 10/13)
Market moves 7 pips before taking loss

The above example highlights that the risk/reward of trading for a 10 pip profit or loss is poor.

For the same 10 pips P&L, the market must move 13 pips for your winning position, but only 7 pips for your losing position.

As a general rule of thumb, we recommend that your Take-Profit or Stop-Loss levels are at least 10 times the spread you have traded on. This strategy will help avoid overtrading and improve risk/reward.

Chasing the Market

If you are a day trader or short term trader, in general we recommend not to “chase the market”.

By this we mean you shouldn’t for example buy Euro after it has already risen 100 pips and is trading at the days highs. Or sell USD/JPY after it has come off 150 pips and is trading near the days lows. The rationale behind this is that in many cases the market will consolidate and there will be better opportunities to enter into a new position.

A common scenario when chasing the market is panic buying or selling when a novice trader reverses a position in the hope that they can quickly make back losses. Unfortunately what often happens is that they simply instead end up repeatedly buying the high, and selling the low. This situation must obviously be avoided.

Managing your Margin

We recommend you only risk a maximum of 10% of your total trading equity on a single trade.

10% may sound like too little risk considering many online forex brokers offer 1% margin or 100 times leverage. However, trading on high leverage can be very risky as you could lose everything in a single trade.

By risking only 10% of your equity on a single trade, you will still be able to make good profits from successful trades whilst avoiding the risk of being wiped out during a bad streak.

Even the most profitable traders can have losing streaks in which they could for example have 3 or 4 consecutive losing positions.

Finally

Successful forex trading is a long term investment which can produce excellent returns if traded with control, discipline, patience and consistency. Your target should be to make substancial profits over the course of anything over 3 months.

Wanting to double your money in a week is not the right mindset with which to start trading. The risks involved are way too high and belong in the casino!

In forex trading the old cliche definately rings true — knowledge equals power!

Beginners Trading Guidelines / Martin Chandra

Martin Chandra is a full-time investor. Get limited offers at here.

Online Forex Trading
is the arena where a nation’s currency is exchanged for that of another currency of another nation. The foreign exchange market
is the largest financial market expression within the world and is the equivalent of over 1.5 trillion USD changing hands daily, which is more than three times the collective amount of the US Equity and Treasury markets combined.

Unlike other financial markets, the Forex Trading market lacks physical location and has no central exchange. Thus it operates all the way through a global network of banks, corporations and individuals that trade one currency for another.

The need of a physical exchange enables the Online Forex Trading market to operate on a 24 hours a day and 7 days a week basis, spanning from one zone to another in all the major financial centers in the world.

By resting on the Forex Trading market a person can easily trade main and exotic currency pairs and crosses quickly and easily, from his or her home or the office too. Many companies offer both individual and institutional customers instant “click and deal” trades on live deal-able quotes during the Online Forex Trading.

The Online Trading is very much influenced on a margin that allows a person to open positions as large as 200 times the opening amount. A person can easily earn interest on a strong currency position even if the market is not moving enough.

Dealing in Online Forex Trading

Companies dealing with Online Trading try to be as practical as possible to their customers which is why the companies are constantly improving and enriching their services.

In such a stage the customers can execute directly from streaming prices through a platform, which is fast, reliable, stable, easy to use, secure and also contains powerful functions. They even highlight within the most demanding trading environments of the Online Forex Trading.

The orders are executed and finalized within seconds. Real-time tables and real-time interactive charting are both flexible and customizable. They include a precision feature that allows the customers to work with other applications and yet are able to monitor their trading activities.

The platform that is used is proprietary software that has been created in-house by Online Forex Trading stock’s information technology department. They enjoy a distinctive ability to repeatedly develop the same and to meet the evolving needs of their customers.

All the trading activity is tracked onscreen in real time, including the current open positions, real-time profit and loss, margin availability, account balances, and all the historical transaction details too.

The responsive and well-informed staff is available 24 hours a day and 7 days a week to assist the customers with any question that comes to their mind. While dealing with the Online Forex Trading customers can trade currency via our online dealing room and also by the telephone in English, 24 hours during the working days and can also easily chat with the dealers round the clock.

To deal with Forex Trading there are many online Forex trading platforms available with proprietary softwares that are based on the superb qualifications of professional currency traders. They are effective, efficient and reliable to use too.

Placed direct orders in Forex Trading are executed on streaming currency prices and can never be re-quoted. The market orders that have not been filled instantly are confirmed within seconds at prices accepted by the client during Online Forex Trading.

As soon as a live trading account is opened, the customers are provided with the Charting package. Multiple Online Forex Trading forex charts can be opened in virtually any time to view the currencies that matter most to the customers.

The transparency feature helps the customers to work with multiple windows as it supports the multiple screens and yet keep a bull’s eye on each and every single one of them.

Eliminating all commissions and fees enhances the trading performance. In addition, various companies offer complete transparency of where the Forex market is Online Forex Trading and where it can be bought or sold.

Through the unique map function that some companies offer, the customers can easily place the open platform’s windows outside the visible area of the screen and easily move them back in. Thus facilitating in the process of trading.

The Online Forex Trading platform has user-friendly, customizable windows, through which you can easily track the current Forex holdings in your account, the quantity of your position their average price and the current market price too.

What is Online Forex Trading? / William Smith

William Smith the author provides much more financial information on many subjects as well as the secret to his success in the market along with 5 Free power stock picks emailed daily so grab your Free subscription on his website at Online Forex Trading (All is Free)

Trading can be fun and exciting when you daytrade and very boring when you position trade. Our motto: get in, get out and go play!

WHY We Want To Day Trade Versus Position Trade

1) We want to spend only a few short hours each day trading, sometimes just a few minutes!

2) We don’t want to hold any overnight positions!

3) We don’t want to hedge!

4) We want the fun of the quicker action and quicker profits!

5) We want more profits with less risk!

So keep these goals in mind as you learn our trading techniques!

Be patient in your learning process and keep in your awareness that if you learn this trading system successfully, you will have a cash cow system FOR LIFE that is safe, independent, portable and highly profitable. It will give you the freedom to quit your J.O.B. (Just Over Broke) and travel the world and earn a great living, with just a portable laptop and your debit card!

The currency pairs are made to swing, so trade with ease and without fear. Quickly close out a losing position…don’t dream/hope that it will turn back into profit! It often doesn’t!

Don’t be radically bullish or bearish, swing trade within the trading range of the day, go with the short term trend.

If you can develop the mental and emotional disciplines to trade according to these guidelines, you’ll do very well and become very successful!

Ideas About Trading in the Different Time Frames

Each person needs to experiment with the different time frames and moving averages to find out what he/she is most suited for, time-wise and personality-wise. This takes time and lots of practice and patience in your demo account.

If you have a J.O.B., then what we teach is perfect for you if you can trade during the busiest hours, between 3 am to 11 am EST. Even 1 hour of trading in the 1-5-10 or 15 minute chart will make you enough money for the day. You can do multiple scalping trades in the 1 and 5 minute chart, or one trade in the 10 or 15 minute chart, and then go to work. If you get lucky and hit a breakout or breakdown, no matter what time frame you are in, you can make as much as 30 -100 pips in a few minutes! YOU ONLY NEED 20 PIPS A DAY TO BE RICH!

Some people love scalp trading, which are quick trades in the 1 and 5 minute charts for small but quick profits; and some love day trading, mostly done in the 10 and 15 and 30 minute charts, which simply means you close out all positions before the end of the trading day.

If you do one or more trades in one day that rides the price up and down and you close each position out, that is called day trade swing trading. And some prefer swing trading over the course of several days or weeks, which I call position trading, mostly done in the 1 or 2 or 4 hour charts.

We personally scalp and short term day trade, which is really just one-day swing trading. If you use a 1 or 5 minute chart with a 20 pip initial stop loss with a 10-15 pip trailing stop after breakeven, and/or a 10-50 pip limit, you will do very well without big risk or staring at your computer screen until you fall asleep or go blind!

Our motto: get in, get out and go play!

The beauty of this method is that you don’t have to have your PC on all the time or be glued to it or worry about overnight positions. The trade-off is that the longer plays make more money, although, they do carry more inherent risk. So again, staying with your trade in the beginning until you’ve moved your stop to a breakeven, is your first goal, and this is true for every time frame you decide to trade in.

Keep a trading journal

Finally, it is a good practice to keep a simple trading journal. This way you can keep track of your trades and progress and be able to analyze, improve and hone your trading skills.

Simply include the time you entered and exited the trade, the currency pair, the chart time frame (this is important), and the strategy (breakout, trend or top or bottom). Also include write down what happened and what you could have done differently for future reference.

Not every trade can be a winner but in order for you to be a consistent winner, you need to do two things: keep your losses small and manage your margin conservatively.

We recommend that you trade no more than 5-10% of your account size in each trade. 5% is safer. It’s easier to make up the losses, when they happen, and they will happen!!! And ALWAYS use stops!

Learn to manage your money wisely…invest small amounts each time and keep your losses small and when you’re in profit, let your profits run with a trailing stop.

What “Rich Dad, Poor Dad” says about trading:

“It’s not gambling if you know what you’re doing. It is gambling if you’re just throwing money into a trade and praying. The idea in trading is to use your technical knowledge, wisdom and love of the game to cut the odds down, to lower the risk. Of course there is always risk. It is financial intelligence that improves the odds.” Robert T. Kiyosaki

“Knowing how to take a loss for the trader is as significant for him or her as learning to overcome the fear of death was for the samurai warrior.” Robert Koppel

What’s the best way to stay positive no matter what? Celebrate your losses! Get up and dance, do a little jig, blow a horn, yell yippie, another loss! Remember, you love the game and winning and losing are both part of the game!

Forex Day Trading Versus Position Trading – The Pros and Cons / Cynthia Macy

Erol Bortucene and Cynthia Macy are co-authors of The Day Trade Forex System: The Ultimate Step-By-Step Guide To Online Currency Trading: The Day Trade Forex Trading Systems