How to Find a Successful Forex Trading System

By: Andrew Daigle

The Foreign Currency Exchange Market, or more commonly known as the Forex market is the largest financial market in the world. Over $2 Trillion dollars are traded on the Forex market every day. Forex traders make money in the currency exchange market by playing one currency against another. They play currency pairs and bet that one currency will either increase or decrease in value and the other currency (or cross currency) will go in the opposite direction.

As I mentioned, Forex traders trade currency pairs. For example a trader might play the Euro against the US Dollar (EUR/USD pair). If the trader thinks the EUR will increase in value over a certain period of time, the trader will go "long" the EUR/USD pair. If the trader goes long this currency pair, he/she is betting the EUR will "increase" in value against the USD. If the trader is right, they make money. If they're wrong, then they lose money. Successful traders always employ a good forex trading strategy so they consistently profit from their trades.

There are two ways to play the Foreign Currency Exchange Market that all experienced Forex traders use. One is called Fundamentals and the other is called Technicals. Fundamentals refer to news events that move the markets. For example if a country increases interest rates, then most likely that will cause the currency to increase in value. If a country releases poor housing numbers then that could cause the currency of that country to decrease in value.

The technical side of trading the Forex markets refers to using charts and indicators. Price charts and other technical tools are used to determine a possible trade. Indicators like MACD, Stochastics, moving averages and more are just a few of the tools in the technical traders toolbox. The best Forex traders use a combination of both fundamental and technical trading. Great traders never rely on just one side.

Some traders trade longer term and some trade short term. A long term trader is considered a position trader. Position traders take a longer term approach to trading the forex market. For example if one currency looks like it could be bullish over the next few weeks or months, they may place a long position trade and let it ride for weeks or months until they exit their trades to take profits.

Traders who take a short term approach to trading are considered day traders or intraday traders. These traders only have open trades for a short period of time and most of these Forex traders open and close their trades in the same day or within hours. Most technical traders don't like to have open position around news time because some major news events can actually cause a great technical trade to fail because of an unexpected news surprise.

No matter what style of trading you use, as long as you use a great forex trading strategy and stick with the rules of those strategies, trading the forex market can be a very profitable way to make a living. Not only is a good forex trading strategy important but good money management plays a big role as well. As long as you manage your winners and losers and set the appropriate stop losses and profit targets, you will quickly find that trading the Forex market can be a very profitable business.

 

 

No Cold Soup at Your Retirement

By: Amy Goodmann

 

All retirees hope that they will have enough cash to see them comfortably through their retirement years. The alternative is obviously more ominous – that they will outlive the comfort of their savings. The truth that most baby boomers have yet to comprehend that even through they will have their parents savings and life insurance plans to live off of we are living longer. Baby boomers will need to carry themselves on their retirement savings many times longer than life span that actuaries used in their precious calculations.

The magic retirement age of 65 was historically chosen not arbitrarily by the German Kaiser in the introduction of the first pension plans as this at the time was the average life span of most male workers. As most baby boomers know and anticipate modern medicine and conveniences have pushed that envelope. You may like it or not before your retirement savings anticipated a 10 year payout period. Now it may be closer to 25 to 30 years.

The thought of having to lower their standards of living and giving up some luxuries to make end meet is for many people, the most worrying aspect of their leisure years. Often, though, the imagined fears are exaggerated. It is often said that 99 % of the things you fear will never come to pass. But why chance it. The basic rule is that by not planning and leaving things to the last moment severely limits your options and causes unnecessary stress and worry.

The good news is that those who planned their finances carefully during their working years will adjust with ease, and their retirement years can be the most enjoyable years of their existence.

Part of the secret knows to manage one's savings in retirement. Basically today's workers are looking at two choices. They can work longer so that they can spend more or they can retire sooner and spend less. Another option is to do a bit of both and reduce your workload and in effect semi-retire. By planning ahead you may well have more than one option.

Taking early retirement before your pension begins offers a number of options. You can downsize your house to free up some of your tax free holdings – and live on that pool of cash. This is especially a valuable option now with low interest rates drive large increases in the value of real estate and as well creating a frenzy of buyers willing to snap up your property. If the retiree has profited from company stock options they can use these to bridge them over until the time their company pension plan kicks in. Or they can withdraw from their 401k plans if allowed or withdraw from their savings.

Managing one's investments does not stop at retirement. Individual income, needs and expenditures will vary, but when liquidating investments a tax efficiency strategy will conserve more of your hard earned investment dollars.

If you are not to be dictated by your tax bracket you should keep foremost in your mind when you are trying to figure out strategies. The goal is not how much you make; it is how you much you keep. The same of course is true when cashing in investment vehicles. You always have to be conscious of the tax consequences.

Much of retirement planning strategy depends on the difference between the two tax brackets at the time if investing during your tax earning years compared to your tax bracket during withdrawal in your retirement years.

Remember those that those that fail to plan ahead will plan to fail.

 

The Online Forex Market

The forex trading market is an international market in which money is bought and sold freely and with no outside intervention. The prices of one currency against the other is decided solely by the participants of the market, by the laws of supply and demand. In this sense the forex market is indeed perfect in that it is a completely free market. It is also a relatively safe market, since, if anyone would want to manipulate the market or corner it, they would have to operate with tens of millions of dollars, which would be absurd.

The forex market has several advantages, which make it an ideal trading market for many people who do or do not have any knowledge of other markets. It takes only a short tutorial to have you playing like a pro. In addition, the forex market is fast. The prices can go up and down several times a day, and there is no end to the combinations that you can get. In addition, in time, with the proper training, you can become a professional Forex trader and even help other people come into the exciting world of Forex. What is best of all is that the Forex trading market is today the biggest market in the world, and there is no end to the number of trades and transactions that you can make.

Tips on Choosing the Right Forex Software for Your Needs

By: Adam Taylor

If you're interested in getting started in playing the field in forex trading, then you will find that there are a large number of software programs available. Whether the software programs you need are desktop based or web based, either one can be used in your forex trading. There are many brokers who offer their clients software packages free of charge or they can be a part of opening a trading account with a particular brokerage. Normally the software that will come with your open trading account is the very basic model, with the bare minimum of what you can use, or even need. Occasionally, these brokers will offer extra features at a cost. So when you're considering which broker to open an account with, you may want to consider what software packages they offer to correspond with your account. There are many web site's that offer free demo accounts, allowing you to download different packages so you can try before you buy. Using a free demo account will give you a better idea of what software you would like to use and will help prevent buyers remorse.

The basic software's available are the desktop and the web based. Which ever one you choose will depend on your preference and other technical constituents. The forex market is obviously very dynamic which means that you will want to get the software that is the most reliable and up to date connection to the data as possible. Now, let's talk about your internet
speed connection. Your internet speed connection is a very important factor and if you plan on playing the forex game, you will need to go from dial up to either DSL, even broadband if you can afford it. The faster it is, often the better. Your internet connection speed is a major factor when considering what forex trading software to use.

Another great consideration would be one of online security. Most web based forex software is generally more secure than the desktop based software packages. If you choose the desktop software, then all of your information and your data are stored in your hard drive, making all your valuable information vulnerable to a number of security infractions. If a virus
invades your computer, then all of your personal data and the integrity of your trading system can be jeopardized. If you're hard drive crashes, then all of your important data will be lost forever. Another threat would be those hackers who can hack their way into your computer and gain access to all of your personal information and trading systems.

If you decide to go with the web based trading software then most of the maintenance and security issues are handled by the provider of the package. The internet based foreign exchange systems are readily hosted on secure servers, like the servers that credit cards are processed on. This will give you more protection, with less hassle, as your data is encrypted. Along with this protection, your software provider will protect you from losing data by providing mirrors and backups of your account data.

You may also find that internet based software is more convenient, aside from the extra security when you're considering on
what software would best suit your needs. Moreover, the software will run on your regular web browser, so there won't be
any software you would have to download, meaning you will always have access to the most current features and versions of
that software. In addition, if you frequently travel, you are sure to appreciate being able to log in to the internet from
any computer and have all of your information immediately accessible.

Whatever option you decide to use, choose the forex trading software that you personally find easier to use. Just because particular software works wonders for your friend or colleague, doesn't mean it will work the same for you.

I've used a number of products that weren't any good. Some of them didn't show prices on the charts, some of them didn't have any charts or news, but I did have some success with the EASY-FOREX. Its user friendly and straighforward. They have good support team.You actually may speak with them over the phone, or over the online chat system. But what hit me
the most is the speed of updates. You may check your accounts and positions practically in real time. You can find link to that software on my website.

If you're new to the trading game, then it would be best to have two accounts, one with your software of choice and one demo account. Considering that you learn as you play the trading game, you can keep one account that you will actually use to trade real money; and the demo account, to use to test any alternative moves. You can also use your demo account to overshadow the trades in your real account so you can see if you are being too conservative.

 

Forex Trading Relative Strength Index

The Forex trading RSI is an oscillator that measures the strength of a currency trend, and ranges between 0 and 100. If you're keen to learn forex trading, the RSI is one of the key indicators you should learn, as it enables you to recognize a Forex trading market situation. The relative strength indicator (RSI) is a measure for whether a currency is overbought or oversold.

• Overbought Forex trading occurs if the currency is in an uptrend pattern, because many traders buy the currency in an expectancy for it to keep rising. Over time traders cease to buy the currency, and the rise slows until the trend changes.
• Oversold Forex trading happens when the currency price is in a downtrend. Here too the traders stop selling over time, and a short position is created, finally changing the trend direction.

The RSI is an index of price fluctuations over a certain period, and is seen as a percentage.

RSI=sum of price rises/ sum of all price fluctuations

Forex trading RSI rates consist of:

• Neutral market- RSI Between 30%-70%.
• Oversold market- RSI under 25%.
• Overbought market - RSI over 75%.

An RSI should not be used alone, but in addition to other Forex trading technical analysis indicators. The longer the period of time that is used for the RSI, the less fluctuations it is expected to show.

Gary Burton - Forex Analyst

4 Main Risks Involved In Futures Trading

By: Ricky Lim

 

There's no doubt that futures trading is inherently a risky business. Anyone who tells you it is 100% risk free is either ignorant or trying to sell you something. The truth is futures trading is a gamble. There's no telling when you are going to win or when you are going to lose. The best strategy is to play this game based on the cards you have and hope for the best.

Futures trading does have huge rewards if you win and that's probably the reason many people are attracted to it. However the chances of you losing big is just as great if not greater particularly if you are new to futures trading.

I outline the 4 main risks when trading in futures. You might want to read further before deciding futures trading is suitable for you.

1. Speculative Business

Futures Trading is speculative in nature. No matter what the experts tell you or predict, it is not always 100% accurate. Take it with a pitch of salt. The best investment strategy is not to put all your eggs in one basket, divesting your investment among different financial instruments.

2. Financial Backing

Futures Trading requires a large capital outlay at the beginning which is expendable. Therefore it is definitely not for the faint of heart. If you are thinking of making money in futures trading to pay your bills, then my advise is don't. You should not use money to pay your bills/loans/grocery to dabble in futures trading. Only use money you can afford to expend.

Ideally, a person who wants to play in futures trading should have at least $10,000 USD in his/her personal trading account.

3. Technical Knowledge

Futures Trading requires an intimate knowledge of financial instruments. At the very least, you should be knowledgeable in the 4 main investments categories namely, income, growth, speculation and inflation hedges. Without adequate knowledge, it will restrict you to where you can invest on the market and lose potential revenue on a particular sector of the financial market.

You might be thinking I can always rely on my broker for advice. While it's good to seek the advice of someone knowledgeable, you should be able to make intelligent decisions on your own and the only way to do that is if you have sufficient knowledge.

4. Only Invest What You Can Lose

I would not advise someone new to trading to dabble in futures simply because of the risks involved.

You should have a balanced portfolio with only a certain percentage invested in futures. My advise is about 10% but that depends on your financial standing and your investment strategy. In general, only use money that you can afford to lose in futures trading.

The 4 main risks I outline above is not meant to discourage you from futures trading. What I want to make clear is you fully understand the risks involved and also what you need to do to better your chances at winning in futures trading.

 

The Ins and Outs of Trying Out a Forex Demo Account

By: Adam Taylor

 

Trying out a forex demo account is a method used by literally thousands of potential forex traders and investors to determine if forex trading is truly for them. With a demo account, an interested person can go online and see exactly how an account would work. They are able to do the forex equivalent of the war games generals play in the Pentagon. Without investing and risking any real money the investor can pretend to have money in an account and make buys and sells the same way it would be done in reality. The software used for these demo accounts is very realistic, and generally a person is able to see at the end of the day if they would have lost or gained money if the transactions had been real. It would work very simply. Let's say an investor pretends to have a margin account with ten thousand dollars in it. He looks closely at the currency markets and believes that the dollar will go up in value against the yen. The demo account allows him to buy at a ten to one margin, so he buys (in the program) one hundred thousand dollars of dollars and sells one hundred thousand dollars of yen. There will be a spread, or difference, which amounts to the pretend profit.

Why would a person want to use one of these pretend demo accounts?
The reason is found to be because it is always much safer to learn how to do this sort of thing without having actual money at risk. The same principle applies when kids in driver's education classes sit in demonstrator modules that resemble real autos. They are able to practice driving without taking risk. They maintain heir safety while they build their skills, knowledge and confidence. Pilots follow this idea also by using flight simulators. You would never think of flying an airplane unless sufficient time had been spent in a flight simulator first. The same holds true for forex trading. Spending time with a forex demo account allows the potential trader to gain skills and learn the ins and outs of the game and the market place. A person is then able to see if they truly have the instincts necessary for the market and have sufficient knowledge to "play with the big boys."

Most brokerage companies involved in forex trading have such demo accounts available, sometimes free and sometimes for a small fee. Even if a fee is paid, it is usually worth it because a forex trader can parlay his skills and knowledge into vast profits after spending some time practicing with the forex demo account. Generally checking with a broker can get a demo account set up quickly. A trader with an interest in setting up a forex demo account can also go online and find a vast array of companies ready, willing and able to help the student trader set up an account and enhance skills. Learning what you are doing is always smart, no matter what game you are playing, and forex trading can certainly be seen as an advanced financial game.

John Jackson is an example of a person who benefited from a demo account. After months of study of the forex market, Jackson was convinced that he could make a go of it as a day trader in the forex market. His wife however wasn't convinced and was a little less risk inclined. Jackson went to a brokerage company online that he felt good about and trusted. He set up a demo forex account and began to make trades as though he were using real money. After several days, on paper, Jackson had made a consistent profit. As he learned and as his confidence increased he became even more anxious to open a real forex account and invest his money. His wife also saw how on paper he had made a nice profit and relaxed, taking away her objections. Today Jackson and his family do very well financially through forex trading, and his wife is confident that he will continue to do so. By using a forex demo account he was able to learn enough to go foreword and open a true account and is an active trader today.

So if you think you are ready to challenge the Forex Trading Market, you should start with a demo account on one of the trading platforms.

Personally I use Easy Forex Ltd. (it suits me best), but FXYard Ltd. or FX Universal are pretty good too.

We Should All Be Grateful To Day Traders

By: Amy F. Goodmann

 

Day traders play an essential and often uppreciated role in our economy. And do not most things and events in life come back to the subject of "money ". Day traders allow the stock market to put a price on the companies that are a constant, vital part of our lives. We know these companies. As they touch our lives in many ways. They build our homes, produce our food, make our clothing and build our cars. They broadcast our TV show we watch and pipe the internet as well as telephone and cable service into our homes. They provide jobs for our friends and families. As an integral part of our economic cycle, these are companies that need capital to develop the products that will improve that will improve the quality of our lives in the years to come.

The stock market allows day traders to put a price on these companies every second of the trading day. By actively trading, day traders provide the liquidity that is the cornerstone of our markets. Without liquidity, companies would not be able to raise the money they need to produce the goods and provide the services that we demand. Without liquidity, investors would not be able to commit capital. It is this capital that allows these companies to grow and prosper in our economy. And it is the day trader who plays a pivotal role in creating the markets that allow our economy to flourish.

Day traders add immense depth and liquidity to the stock markets. Liquidity enables any individual, institution or financial institution to rapidly sell its stock for fair value and that is a direct consequence of the large relative numbers of day traders providing active financial markets. Liquidity does not just mean a rapid turnover: it means a rapid turnover at fair value. It could be said that anyone could sell a Rolex watch on the street for $ 25 dollars, but this would not constitute or represent a fair price for the product and therefore could not be said to represent fair and present value. Thus to blow out product at prices below fair and reasonable value does not constitute true and trustworthy liquidity. Other products of wealth such as Real Estate or large expensive boasts may sits for many expensive years before buyers appear on the market that are willing to pay fair value for the product to be liquidated into cash... On the other hand, the stock market allows trader to place a value on capital investments and more importantly affords investors and traders the opportunity to enter or exit their equity positions efficiently in an effective manner. The economic functions of the markets, coupled with unparalleled liquidity and a myriad of constantly arising new opportunities, communication tools and ongoing technological advances make the stock market the ultimate way to speculate and as well provide a value function of the value of assets as well as a quick means of liquidation and accumulation of vital capital

 

Which Forex Trading System To Choose?

By: Jovan Vucetic

 

What Are Forex Trading Systems?

A Forex trading system is a set of rules which are aimed to ensure that you are trading in a way that is free of bias and the influence of emotion. Most beginner traders will look to learn a forex trading system whereas more experienced traders will eventually move to build a trading system of their own.

A good Forex trading system should look to encompass and cover for all possible eventualities which the markets may through up. In that respect, they should comprise of rules which govern, amongst other things the following:

1. Which currency pairs to trade.

2. When exactly to enter and exit a trade.

3. Where to place Stop Losses and Take Profit rates.

Forex trading systems must always be tested against historical data (known as back-testing). Beginner traders, when looking to purchase a forex trading system, should always ensure that the system was properly backtested and that the results are genuine. There are certain software packages available now which back-test trading systems automatically.

Which Forex Trading System To Choose?

This will depend upon your trading style. Some traders are swing traders and will look to keep positions for days, weeks or even months. Others prefer a day trading style and will be in and out of a trade within the same day. A typical swing trading system will look to take larger moves ranging from 100-300 pips over a period of a few days or weeks. On the other hand, an intraday forex system looks for smaller opportunities ranging from 25-50 pips.

Forex scalping systems have become popular of late as well. Scalping is a trading style which looks to take profits on very small price changes, usually soon after a trade has been entered into and becomes profitable. It is a strategy that does not look to capture 50+ pip moves; rather it is more about watching the price and getting in and out of trades for quick 5 pip moves which little by little add up.

While this might sound risky, it can be quite a low risk strategy if performed correctly. As with all trading systems, the most important parameter which has to be addressed here is money management. Having a strict exit strategy and rules on how much of your equity to risk per trade must be clearly outlined.

Forex Trading And Pricing Explained

By: John Forman

 

I received the following question from one of my list members today:

"... you referred to the currency exchange cash market and the fact that this is basically a market between banks across countries. Does this mean that, for example, the EURO/USD exchange rate is set between the Federal Reserve and the ECB? Is that how a price is established without the benefit of any trading on any listed exchange anywhere else? Thanks for the brief education on this particular point." - Stan Z.

The forex spot market is primarily an "interbank" market. That means the majority of the trading volume is done bank-to-bank such as between Citibank and Goldman Sachs, for example. This trading is generally done on behalf of banking customers such as multinational corporations, though the banks also trade with each other both to hedge their currency exposure and to take on trading positions.

This sort of market structure is the same as the one for most cash market government debt trading, such as that for US Treasury Bonds and the like. You can think of it like the over-the-counter market for stocks. Those trades don't go through an exchange, but are done directly broker-to-broker.

In both forex and fixed income there are big players like hedge funds that take part along with the commercial and investment banks. The world's central banks are also major participants at this level in their attempts to influence exchange rates (forex) and/or interest rates (fixed income).

The transaction sizes in the interbank market are large - generally $5 million and up. Obviously, the average individual trader is not going to be trading anywhere near that big. That's where the online brokers and forex dealers come in to play. They allow small traders to do transactions in significantly lower amounts. In fact, there is at least one which will do trades as small as $1.

Here is where some folks get a bit nervous. Many of these forex dealers actually act as market makers with their clientele. By that I mean they take the other side of the trades that are done by their customers. This is something which can sometimes happen in the stock market as well, especially with OTC stocks. The concern that folks have with this is the implied conflict of interest in terms of price execution that creates. Is a dealer who will be taking the other side of your trade going to be acting in your best interest when you put on a trade?

While it may be true that some unscrupulous dealers may take advantage of their customers in that way, I am quite confident that most of them are not acting against their customers. They simply provide liquidity to the market and earn the spread to do so. When they have an excessive exposure to any particular currency, they offset it by hedging in the interbank market or with another dealer. That's basically the same as a floor trader on any exchange.

Getting to the question of how prices get set, the market does that, not the central banks. Each individual bank and dealer is actually setting its own price. That might sound a bit strange in that it would create different rates all over the place. The fact of the matter is, however, that prices between dealers and banks are almost always going to be very, very close. There are services such as Reuters where dealer prices are aggregated and presented in data feeds, allowing everyone to know the current (and historical) market rates. Arbitrage trading keeps dealers from quoting prices too far away from each other.

There is also trading in the futures market, and the relatively new currency exchange traded funds (ETFs). The activity there, while only a small fraction of the global market volume, also contributes to keeping prices in line across the board.

 

Chart Patterns Verified By The Elliott Wave Principle

By: Bret Freak

 

Still wondering whether chart patterns are a valid form of analysis to trade the forex market? Well, just recently I have realized that both Elliott Wave, and. Hurst Envelope analysis support the validity of chart patterns, and even go as far to explaining why they occur! What's interesting is the fact that both Elliott Wave & Hurst Envelope analysis are two very different analysis techniques, yet both explain exactly why these patterns continue to repeat time and time again.

Here is a quote from the Elliott Wave Principle on chart patterns:

"The Elliott Wave Principle not only supports the validity of chart analysis, but it can help the technician decide which formations are most likely of real significance" It goes onto explaining how chart patterns relate to Elliott Wave analysis and how you can use it in your trading.

And here is a quote from James Hurst's book entitled: "Profit Magic of Stock Transaction Timing"

"If the "X" motivation concept is valid, it must be able to explain the existence and, reoccurrences of common chart patterns and, why they impart information to the investor." And:

"The second purpose of the chapter is to show you how the price motion model can be used to resolve chart patterns. Such patterns can be used to determine which way and when price motion will go at pattern termination."

Although the above may sound very confusing to those who haven't read Hurst's book, it's still an interesting fact that the validity of chart patterns have been confirmed and supported by two very different market timing techniques. Now this brings us to another question: Can both Elliott Wave and Hurst Envelope analysis be somehow combined together to take chart analysis to a new level? Perhaps.

It's not however my aim here to go into any details on how this may be achieved, but rather, allow those interested to follow up on this interesting idea themselves, and give those who are unsure if chart patterns are really a valid form of trading analysis, some confidence in their value in trading the forex market.

A Parting Comment:

Before you go out and buy a copy of Hurst's book "Profit Magic of Stock Transaction Timing" I would like to warn you in advance that the content presented in this book can be at times hard to understand. And on top of this, the market timing technique Hurst presents in that book can be very time consuming. Since it involves manually drawing in "Envelopes" around price action. It is still however an interesting read, especially for those who are interested in how Hurst's timing technique can be used to add accuracy to chart pattern recognition.

I believe the Majority of traders would be content on using the Elliott Wave Principle to further analyze chart patterns. Since it is more widely known than Hurst's Envelope technique, and has more extensive information and education available on it than Hurst's technique.

Conclusion

By understanding the Elliott Wave Principle, and Hurst Envelope analysis, you are able to take chart pattern recognition to a new level of accuracy, and therefore profitability. So, if you are the type of person who is interested in trading chart patterns more successfully you may be interested in doing some further research into Hurst Envelope analysis, and the Elliott Wave Principle.

Forex Trading: Avoid Bruises

By: Donald Brown

 

Forex trading involves a highly competitive, fragile and volatile market. Starting out in forex trading can be like stepping into a china shop with your pet bull on a leash. Sooner or later there's going to be a commotion and someone just might get bruised.

If you're a beginner in the forex market, you'll need to prepare yourself in order to survive, let alone become successful. The twenty-four hour forex market is the world's most high-risk market, with incredibly high trading volumes. Decisions must be made in split seconds, and there is no room for weaklings.

It is essential to master the different terminologies, concepts and processes that are involved in forex trading. An educational investment in these diverse and complicated areas will give arm you with the tools and confidence you'll need to succeed in the currency trade. More importantly, this training will allow you to understand whether or not you are out for this highly volatile trade. This is an important decision to make, and should be made honestly and early in your career. There is no point in starting out in your trading career by losing money on forex markets, only to decide later to move on to mutual funds, stocks or commodities trading.

Succeeding in forex trading does require intense training. Beginners need to learn how to chart and analyze market movement, and determine the entry and exit points. This is an extremely important skill to acquire, as every forex trader's future depends on his or her ability to control order flows. Forex trading means knowing when to buy and when to sell. When studying forex trading, you'll also learn about margins, bids, order types, rollovers, leveraging and other trading basics. Be sure that you know all of this before entering the market. There is nothing more embarrassing than being at the center of the action and not understanding a common trading term.

Trading philosophies should also be studied before entering into forex trading. Strengthening certain psychological traits like discipline, commitment, patience and risk management, will help your to better handle the certain pressures of trading.

There are several ways to get acquainted with the skills and knowledge required for forex trading. Live seminars, trading books, online webinars and subscription services can all offer the training you need. Each training method has its own advantage, so be sure to research your options and choose the one that meets your needs. Live seminars deliver vital information on a one-to-one basis. Trading books provide a wealth of information that you can easily refer to anytime you need it. Online courses provide 24/7 access to trading knowledge. It's up to you to decide which method suits you best.

The forex trading market is like a vast, unsettled ocean; there are a lot of sharks in there, and you're either going to sink or swim. Train yourself well and you will have a better chance of success.

 

Forex Trading: Good Opportunity Or Scam?

By: Brittney Foster

 

Until recently, the forex market or foregn currency exchange market wasn't for the average trader or individual speculator. With the large minimum transaction sizes and often-stringent financial requirements, banks, hedge funds, major currency dealers and the occasional high net-worth individual speculator were the principal participants. These large traders were able to take advantage of the many benefits offered by the forex market vs. other markets, including the fantastic liquidity and strong trending nature of the world's primary currency exchange rates.

Fortunately, thanks to new legislation written in the late 1990's, forex brokerages have opened up to the general public and offer trading opportunities for anyone who has an interest in trading currencies for profit. In fact, many brokers allow traders to open and trade currency with as little as $250 dollars in an account.

Regrettably, all of these new currency trading opportunities have created a lot of hype around the forex. Some of this hype includes magic trading formulas, "easy" indicators and expert trend predictors. There are now countless currency brokerages enticing potential traders to open accounts and start trading today. Many people have started to get the feeling that trading currency is more of a scam then anything else. We strongly disagree with this notion and are certain that the forex market has much to offer investors. However, before your take you paycheck and head down to the nearest brokerage to open your forex account, may we make some important suggestions before you enter the currency market?

First, there are thousands of websites with information, terminology, trading strategies and more. We recommend researching several of them as you begin to explore the basics of what the forex is. Brokers often will offer information about the forex, but realize that they are also trying to get you to open an account. Aside from brokerage sites, there are several informational sites and a few forex education companies on the market that offer good information without the pressure of signing up for a "live" trading account.

Second, read some books. Most of the professional forex traders operate using a combination of Japanese candlestick charts and other complex indicators to determine the direction of a particular currency pair. Find books about technical analysis trading, candlestick charts and other methodological indicators. Remember that when you are buying currency it is like buying a stock in a nation or country. Learn about different countries economic announcements, interest reports, and job indicators. These are highly relevant factors that help indicate a currencies direction.

At this point, it may be time for you to open a demo account with the broker of your choice. This will help you get familiar with trading platforms and basic charts. Practice making some "demo trades". Even after doing some basic homework you will find that you fell like you areflying by the seat of your pants" during your trades. At this humbling point in your new forex trading career you realize its time to take a forex training course.

There are many forex training courses on the market today. They come in many forms including seminars, home study courses, interactive online courses, and class room education. Fxcenter.com , one such forex training course has found that the best education courses use all of these methods in their training regime. They feel that a program should include a minimum of 20 hours of home study to teach the basic principles of forex trading. Next a student would need to observe the market in action, without necessarily making trades. To do this, an interactive online class is necessary to help you tie in all the information and begin to apply it to live market conditions. Onsite classes then further reiterate the fundamentals of trading forex and help the student discover a trading strategy that fits his or her personality, financial status and risk tolerance. Finally, working with a highly skilled forex mentor, again during live market sessions, is critical to help the student understand the psychological part of trading. These mentors would also help students create an advanced trading system and analyze the market minute by minute.

Most successful traders have spent years developing good trading habits and learning the hard way how to take advantage of currency volatility. We strongly recommend you follow these steps as you begin to investigate investment opportunities in the forex market.

 

 

What Is Forex Market?

By: Michael Redmond

 

The forex market, or foreign exchange market, is a trading market where people will trade currencies around the world. The forex market is like the stock market in that money is traded and that people on the market can gain or lose money in trading, but it is much larger than any other market out there. That is because all kinds of monies are being traded at any time of the day.

Like with stock market prices currency exchange rates will change every day and can be different at any time of day. Therefore, it will be important to watch how your forex market investments are doing so that you do not lose any money in your transactions.

Also, you should understand that the forex market is open all day long. There are major forex market trading areas around the world, including locations in London, New York, Zurich and Tokyo. There is always at least one forex market trading area open during the day. The exchange rates will be different throughout the day, especially when the forex market in one city closes for the day and another at a different point in the world opens.

There are many different currencies that are being traded on the forex market. These include the American, Australian and Canadian dollars, the Swiss franc, and Euro and Japanese yen. When using the forex market you can trade a currency against another one trade it for another currency in order to help increase your revenues and earn more interest.

One great benefit of forex market trading is that there is very little possibility of any insider trading involved. Insider trading, although it is illegal, does happen in traditional stock markets, as people will know inside business secrets that will allow for people to buy stock before it begins to go up significantly in value. While the forex market does have people buying and selling things like in the regular stock market, insider trading is not found in the forex market because the changes are all based on how people buy and sell and by how the value of the economy of different countries is going.

It is also easy to identify different currencies on the forex market. This is because all of the currencies on the forex market are identified by three-letter codes to help distinguish between them all. For instance, the American dollar is listed as the USD, and the Euro is listed as the EUR. These codes make it simple to remember what currencies are out there for trading.

The forex market is a great market for you to consider investing in. If you would like to learn more about the forex market and how you can get involved you should consult your local broker for information. Also, be sure to look up information on the broker you are interested in working with to see if it is the right one for you to be working with for the forex market.

 

The Power Straddle

By: Jack Wheadon

 

Discover How To Win Back Your Trading Losses And Make Profits CONSISTENTLY Every Month...
The "POWER STRADDLE" Strategy Holds The Key
You're about to learn a very simple, yet very effective strategy to turn your FOREX trading into a reliable cash cow!"

Dear Forex Trader, have you lost money trading Forex? Have you worked so hard without success with your trades? Have you lost confidence and interest in Forex trading because you kept losing? You're not alone. But cheer up, The POWER STRADDLE is here.
Why You Need A Trading Strategy Right Now...

Let me begin with my little trading experience. My name is Benyomin. I graduated from a college with an degree in aviation. Soon after graduation I started to work with the airlines. So beside some basic math courses, I knew absolutely nothing about financial markets, especially FOREX trading.

As I traveled from country to country exchanging U.S. currencies for currency of the country I was in, I was trading FOREX without knowing it. Back then there was no way to trade on the internet. As you can image now that has changed.
I kept thinking about it. Forex trading was such an exciting game that fitted my life so well, but only if I won... ah, exactly, did I say "game"? Yes, it was more like gambling than any trading at all, because I had absolutely no idea how the market moved...

Naturally, the first step I took was to buy a bunch of books about FOREX, hoping to find some wisdom in there. I read a few simple books, they were O.K!  Some of them taught me how to trade FOREX! Then I tried looking at a few sophisticated ones... They were very technical! I thought to myself " do I need a college degree in finance to trade FOREX?" That doesn't make sense, because if it's true, then why wouldn't those "finance gurus" trade themselves to financial freedom? And I am sure some are… FORGET ABOUT THE BOOKS!

So after some research, I decided to subscribe to a FOREX signal service. To make it short, it was not as consistent as promised.
 
Then about two months later, I happened to talk with a very good friend of mine, a great mentor in many aspects including financial matters. He (whom I would like to call a trader who lives off of his trading. He suggested a few strategies. Before I knew it the 'POWER STRADDLE was born.
 I have tested and recorded by video the HOW, WHY, and the PROFITS. So it can be explained in written form as well as watched the ease of setting up the POWER STRADDLE. So anyone can start making PIP's
 
So what is this strategy all about? Read on... I'm sure you'll love it!

Power Straddle is the powerful tool for the MetaTrader 4 Platforms
 
It is always hard to know where the market will go during the news time. Therefore we offer you Power Straddle to take care of such events.

In seconds
 
- Our software is a huge help to trade during the most volatile reports.
- Position Long/Short - when the News report occurs
- No need for expensive reports
- Preset the PIP profit you want to take
- Preset the Stop Loss for your protection
- Preset the size of the Lots
- Maximize Profit with added extra positions.
- In both directions with stop losses and profits.

The January Effect and how it relates to Small Caps, or Penny Stocks

By: rob rens

 

The January effect is predicated on the theory that investors tend to sell of their losing stocks towards the end of the year in order to write the losses off on their taxes. Therefore, according to the January effect, stocks will tend to dip towards the end of the year and rebound in January when tax-loss selling has ended.

The January effect is supposed to have a greater affect on small-cap stocks (as opposed to large-caps) since it is assumed that a relatively small amount of tax-loss selling will still have a significant impact on a relatively small, thinly-traded company

Analysis of broad samples of value-weighted and equal-weighted returns of U.S. equities documents that abnormally high rates of return on small-capitalization stocks continue to be observed during the month of January. This January effect in small-cap stock returns is remarkably consistent over time and does not appear to have been affected by passage of the Tax Reform Act of 1986. This finding brings new perspective to the tax-loss selling hypothesis and suggests that behavioral explanations are relevant to the January effect. After a generation of intensive study, the January effect continues to present a serious challenge to the efficient market hypothesis.

So there you have it Gang.... easy huh?....Not really at all useful to those that ONLY invest in the majors....BUT ( and this is a VERY BIG BUT....no, not mine....nice try though )....if you are like me, and ONLY invest in small caps and/or penny stocks...THIS IS OUR TIME OF YEAR!!!!!!!

As month end is indicative of back office selling ( credit departments of EVERY brokerage houses clearing off their books for adjusted loan values ), so is the end of the year for penny stocks. I mean.... it's simple to follow....how many penny stocks that you know of this year alone, have declined in value? If you're a full time VULTURE, like myself, out of every 10, and average of 6 or more will be losers....therefore, "we" sell to "book" the loss and apply it to our gains for the year ( if any..)....are you following me?.....so....if you've done your own DD on a few "juicy" penny plays and are finding yourself at a loss.... you may not be a loser after all.......if your stock is thinly traded....but trades regularly ( VERY IMPORTANT----PLEASE PAY CLOSE ATTENTION TO THAT )....SELL you position ON Dec.31 before noon.

Get a VERY comfortable blanket and some coffee and be prepared to sleep next to your computer ( or have your finger on speed dial to your Broker )....on Jan. 2 ( Not 1st as we're closed ) at 6:30am....BUY back in....more than likely, you'll be buying back at levels slightly lower than where you sold the day earlier...TADA!!!....you're already a head for 2007!!!!!

Pretty elaborate spam on that one, we don't suggest anyone buy anything here, sorry, Thanks for the rest of your report though!!!

How to VALUE a penny stock...MARKET CAP !!!!

By: rob rens

 

So, you want to know how to VALUE a penny stock do you?... Ok then class, we're about to begin:

Penny shares
The term " Penny Stocks" ( or Micro's )simply implies JUST THAT....stocks that trade under $1.00. Now, without getting too technical... from time-to-time certain stocks that once traded in pennies, can breakthrough that IRON CLAD ceiling of $1.00. From here ( $1.00 )....to "usually" the $5.00 level.... you are now dealing with SMALL CAPS ( Small Capitalization ). So... with a PLETHERA of penny stocks to choose from.....how does one PROPERLY place a value upon it's shares?.....I mean, the VERY reason they're trading under $1.00 tells us all something..... do you wanna know what that is? Oh....you do?.....GOOD!!! 'cause i'm telling you anyways.....lol...

THEY HAVE NO EARNINGS!!!! NO INCOME!!!! (usually)

So, with that said.... how do "we" compare one to the next to determine whether or not "we're" getting ripped off? SIMPLE!!!!

MARKET CAP / MARKET CAP / MARKET CAP!!!! ( Market Capitalization )

Once you've set your sights on a JUICY penny play....you need to do 3 VERY simple things:

1) Find out the TOTAL ( very important ) number of shares issued and o/s ( outstanding )

2) Take the current price ( the price you see TODAY in the market )

3) Multiply the TOTAL # of shares o/s by the current price.

TADA!!!! You're done!!!! ( how hard was that?!?! )

example:

ABC Company ( lets say they looking for GOLD...have a property or 2 )

6 million shares o/s

0.30 ( Current Price )

6,000,000 x 0.30 = $1,800,000

Now... the trick is to find another company that does the very same thing ( looking for GOLD ). Apply the same multiple to that company now. Compare the two.

So, with that said... let's compare ABC Company to:

DEF Company ( also looking for GOLD )

20 million shares o/s

0.55 ( Current Price )

20,000,000 x 0.55 = $11,000,000

UUUMMMM DUH.....Which one is a BETTER VALUE?!?!?!?

YOU'RE RIGHT!!! ABC Company gets my money!!!!!

You see people....

This idea behind the advocacy of penny shares is that low priced shares have more potential to rise, and therefore investors should do their stock-picking by selecting from among penny shares.

The idea is fundamentally flawed. Looking at price alone, without any indication of what value a share has is not meaningful. A share price can only be said to be too high or low relative to earnings per share, assets per share, or some such similar measure.

It is not possible to say what a share ought to be worth without properly valuing it. Once a real valuation technique has been used, the fact that it is a penny share is irrelevant.

The falsity of the idea that penny share are in some way special is evident if one considers that a company can decide whether its shares are penny shares are not by consolidating or splitting its shares.

What little value techniques based on the penny share idea have is attributable to the fact that penny shares tend to be those of small companies and those whose price has fallen from more conventional levels. The former are more likely than large companies to have good growth prospects. The latter are more likely to be recovery stocks

Investors are better off using the more precise technique of screening by market cap to find small companies, and looking at historical data to find recovery stocks.

( now apply what you've learned to my previous postings!!! )

Let's make $$$$ together!!!!

 

How to analyze junior exploration companies

By: rob rens

 

How To Analyze Junior Exploration Companies:

Most conventional analytical techniques cannot be applied to junior exploration companies. Most juniors lack either a property with a PROVEN economic ore body or sufficient capital to attain production should a mine be found. How then are junior companies evaluated? The following are some factors to be considered:

1) Extent of exploration activities and location of properties

2) Management's track record - Is management experienced? Have they discovered or do they operate any producing mines?

3) Financial position - Is there enough working capital to finance exploration or will more treasury shares have to be issued ?( this is where dilution comes into place )

4) Common shares issued - How many common shares are issued and outstanding? (o/s) If a company has few assets and a great number of common shares o/s ( I smell OTC ... ), a reverse stock split may be necessary before new equity capital can be raised.

Successful analysis of junior mining companies and their correlating share price requires SPECIALIZED knowledge (Shhh, can you keep a secret), patience and willingness to devote a great deal of time to security selection. Shares of junior mining companies can resist sharp price fluctuations in response to favorable or unfavorable news or rumors. Nimble trading is required if profits are to be realized or losses minimized.

There you have it class.... from my brain to yours