Friday, August 21, 2009
Internet Marketing – Past Present Future
What An Expert Advisor Can Do For Your Forex Trading
Most forex traders fail because they fall prey to the human emotions of fear and greed. However, trading with an Expert Advisor [...]
Long Term Profits In Forex Trading
This is how many [...]
FOREX versus Stocks
When the company does well and makes a profit, the value of the stocks rise. Stock owners can sell their shares for a profit or hold on to the stock for even more gain in the future. Sometimes companies will issue dividends – part of the profits that are distributed to share holders.
Stocks are traded on stock exchanges. Most stocks are bought and sold through brokers who charge a commission or fee for this service. American stock exchanges include the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ). Most stocks are only listed on one exchange, although large companies may have listings on several exchanges.
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Stocks were traditionally seen as long term investments. So called ‘blue chip’ stocks – those having proven value over many years – may form the backbone of an investment portfolio. Short term trading is a relatively new phenomenon made possible with the advent of Internet trading. Day traders attempt to take advantage of large daily fluctuations in the market by buying and selling many times in one trading period. It is relatively risky and any profits realized are reduced by broker commissions charged on each transaction.
Stocks may sometimes be bought on margin, meaning that the investor borrows money to buy the stocks. Margin rates are usually around 50% – the investor can borrow as much as half the value of the stock.
FOREX
The Foreign Exchange Market (FOREX) is quite different from the stock exchange. In contrast to the stock exchange, the FOREX is primarily a short term market. Most traders enter and exit deals within a 24 hour period – sometimes within a few minutes. Many FOREX trades can be made in one day without building up a large brokerage fee because FOREX trades are commission free. Brokers earn money by setting a spread – the difference between asking and selling prices.
The FOREX is the largest financial market in the world. It is handles transactions worth $1.5 trillion every day. By comparison, all the American stock exchanges combined handle daily transactions worth about $100 billion. The huge volume of FOREX means that it is one of the most liquid markets in the world. There is always a buyer and seller for any type of currency because the world economy relies on the movement of goods from country to country. The stock market is less liquid because participants may choose to hold their investments or move on to other markets.
The FOREX is not located in any one location. Trading markets are located world-wide and because of difference in time-zones trades can be made 24 hours a day, 5 days a week. Trading begins in Sydney, Australia on Monday morning (Sunday afternoon New York time) and continues non-stop until Friday afternoon New York time.
Stock exchanges have more limited trading hours. While it is possible to trade on exchanges world-wide, each exchange is independent and operates for just 7 hours a day. There is no way to buy or sell a certain stock that is only traded on one stock exchange when that exchange is closed.
Other advantages of FOREX? It is more predictable than stocks. It follows well established trends; it allows high leverage – typically 100:1 instead of 2:1 on the stock market; and it doesn’t require a large investment – mini accounts as small as $250 can get you started in FOREX.
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Forex A Business Or An Investment
At the current economic time many people are doing everything that they can in order to find that get rich scheme that is the American dream. However FOREX is nothing something that should be considered as such, it should be thought of as running a business.
At any point in someoneas when they get [...]
Instant Forex Profit Overview
What does Instant Forex Profit’s website have to say about itself? This is Directly from their website:
- Best Forex Trading Software – Automatically Generate Your Trading Decisions When You Relax
- Perfect for part-timers – even geeks need a life! I wanted to it take no more than five minutes a week, maximum.
- Profit-making – I wanted to make sure I could make and save plenty of money.
- Easy to use – with clear entry/exit signals, leaving no guesswork.
Learn more about exactly what this product is about here: instantforexprofit.com
Does Instant Forex Profit deliver on its claims? It has a refund rate of only 6.35% when purchased at the standard price of $97.00 which is very low – under one in ten people were not satisfied with their purchase. We also took into account various additional factors in order to calculate the site’s trust rank. It scored 4.50/5 which is above average so this is a product we definately recommend.
Taking everything into account we give Instant Forex Profit an overall rating of 4.25/5
Your number one solution for Currency Exchange.
Forex trading hours, trading time
Tokyo open 7:00 pm to 4:00 am EST
Sydney open 5:00 pm to 2:00 am EST
London open 3:00 am to 12:00 noon EST
And so, there are hours when two sessions are overlapped:
New York and London — 8:00 am — 12:00 noon EST
Sydney / Tokyo — 7:00 pm — 2:00 am EST
London / Tokyo — 3:00 am — 4:00am EST
For example, trading EUR/USD, GBP/USD currency pairs would give good results between 8:00 am and 12:00 noon EST when two markets for those currencies are active.
At those overlapping trading hours you'll find the highest volume of trades and therefore more chances to win in the foreign currency exchange market.
Forex Trend Lines
Not only the trend line will show a current trend (direction) of the price move, it will also depict points of support and resistance levels for market price.
In addition, it will also help to determine good entry and exit points, best positioning for profit taking and placing protective stops.
This very simple, but yet quite powerful tool will be one of the crucial indicators of possible trend reversal (when market price starts move in the opposite direction).
So, shall we learn how to draw trend line to make it our good friend in profitable forex trading?
In the uptrend market trend line is drawn below the pattern formation; in the downtrend — above. (That is why when the trend is going to change our trend line will be crossed, which therefore will give us a signal that the price can start moving in another direction.)
Not trading or standing aside is a position
Never risk more than 2-3% of the total trading account
Even with the same trading system 2 traders can get opposite results in the long run. The difference will be again in the money management approach. To introduce you to money management, let's get one fact: losing 50% of total account requires making 100% return from the rest of money just to restore the original balance.
Always take a look at the time frame bigger than the one you've chosen to trade in.
If a trend is hard to spot — choose a bigger time frame. Up and down market patterns are always present. Always make sure you know the dominant trend, unless you are a scalper. Scalpers have no need to spend their time studying big trends, what's happening in the market here and now (during 5-10 minute time frame) should be of only importance to a Forex scalper.
Never invest money into a real Forex account until you practice on a Forex Demo account!
Thursday, August 13, 2009
Trading Using the Triple Moving Average Crossover
When trying to make a decision on whether to buy or sell a particular security, the triple moving average crossover (often referred to as the "triple MA crossover due to keyword restrictions) can often provide partial guidance. As one of the most basic technical indicators, this technical indicator can provide a buy or sell recommendation based on the direction of the crossover, allowing traders to open or close positions accordingly.
Moving Average (MA) Defined
Based on the average value of a security, an MA considers past closing prices over a given period of time. Since the MA is be based on historical prices, the lagging data must not be used in isolation. The longer the MA, the more lagging it will be; the shorter the period, the less lag. As a result of this lag, the triple MA crossover works best in clear markets where there is a definite trend, and not so well in sideways or choppy markets.
What is a Triple Moving Average Crossover
A triple MA crossover is a technical indicator as to the direction of a stock price. This type of indicator is triggered when a short MA crosses over a medium moving average, and the medium crosses over the long moving average. Typically, analysts will use the 4-day moving average for the short MA, the 9-day for the medium MA, and the 18-day for the long MA.
Consequently the triple MA crossover will see the 4-day crossover the 9-day and the 9-day crossover the 18-day. Now that all three moving averages have crossed one another, the analyst makes a recommendation on a trade.
Trading the Triple Moving Average Crossover
When the MA cross over one another in an upward fashion, then a bullish signal is generated. This would be an indication to purchase the security (long). Likewise, when the MAs cross in a downward trend, traders are urged to sell the security (short).
As a warning, however, trade decisions should not be based solely on the signal of a triple MA crossover indicator. In order to confirm or refute the signal produced, investors and analysts can easily rely on signals produced by the MACD and Momentum.
Since reviewing multiple technical indicators and signals can become a full-time job for dozens of analysts, many traders can benefit from the assistance of trading software, which can compute thousands of complex signal on a daily basis and return simple buy or sell recommendations.
The Best Time to Day-Trade
Day-trading offers many advantages over short-term trading or long-term investing. Typically a day-trader is out of the market at the end of the day, so there is no overnight risk. The day-trader watches the market in real time, enabling him to adjust his position live as the market develops. The frequent trades develops his skill much faster and will help to maintain it at its peak. Trades typically have lower risk with smaller losses and there is a quicker return when they are profitable.
The disadvantages of day-trading are also many. Over trading is a real problem with most day-traders. Quicker analysis and decisions, along with faster responses, are demanded. Emotion frequently interferes with good judgment and its roller coaster ride can be extreme. A margin account can be drained faster than with any other type of trading. Most day-traders give up regular careers in order to trade during regular business hours and so trading often becomes their only source of income, placing a great financial pressure on them. Still, most would agree that they wouldn't trade day-trading for any other career.
When I first started day-trading I found it to be very stressful. I chose as my day-trading market the S&P e-mini, a market I knew well and felt comfortable with. The day would start out well, but as mid-day approached I found myself struggling and making trades repeatedly as I tried to keep up with the frequent changes in direction. Afternoon would ease the stress some, but I found myself so exhausted that I could not focus well. I would make some profits, but by the end of the day I would find that I had spent so much in transaction costs that the profits were very meager. After a few weeks I found myself too worn out to get up and trade, particularly if I had just traded the day before. So I started to skip days that I would trade. Eventually, I was reduced to trading at best just every other day. It was clear that the income was far too little for my needs and I knew that any hope of a long term career in day-trading was in serious trouble. At first I thought I had to just force myself to trade more, but when I did so the situation still didn't improve. In fact, it seemed to get even worse.
Here's How to Trade Options in 5 Steps
So you want to know how to trade options? Well get excited - because is easier than you think. Here I have simplified the process into five easy steps. If you simply follow these steps and don't over-complicate the process, then you'll be well on your way to trading options in no time!
==ONE==Understand Basic Option How-To
There's nothing difficult here. Just a bit of memorizing.
* Make sure you know the difference between a call and a put.
* Be sure to understand your rights/obligations as a buyer/seller of each.
TIP: Go to any online stock exchange and download their options booklet (most provide a free information booklet.) Read through the booklet in its entirety - several times! When understanding How to Trade Options, make sure you are completely comfortable with these key concepts:
* If share price increases, call-option price increases.
* If share price drops, put-option price increases.
Also:
* If you buy a call - you are purchasing the right to buy the underlying security at the option strike price. So, you have the right (but not the obligation) to exercise the call (that is you can BUY the underlying security at the option strike price).
* If you sell a call - you are selling the right to buy the underlying security at the option strike price. If the buying 3rd party exercises this right, you will be forced to SELL to them at the option strike price (especially if the market price is higher than the strike).
* If you buy a put - you are purchasing the right to sell the underlying security at the option strike price. So, you have the right (but not the obligation) to exercise the put (that is you can SELL the underlying security at the option's strike price).
* If you sell a put - you are selling the right to sell the underlying security at the option strike price. If the buying 3rd party exercises this right, you will be forced to BUY from them at the option strike price (especially if the market price is lower than the strike).
In the beginning, that's all you need to know. Once you start paper trading (in Step 4) you'll be able to answer you're own questions along the way - either through your own experience or by reading books and other training material.
==TWO==Find a options-strategy to suit you.
There are thousands of strategies you could choose from. It's important you choose something that suits your lifestyle, your personal risk-tolerance, your beginning trading bank, the time you have available, etc. Personally, I like the Australian Stock Exchange - ASX Equity Options. ASX equity options are traded for 6 hours per day, 5 days a week. They also provide some excellent How to Trade Options free resources.
TIP: If you don't live in Australia, you can still trade the Australian options on the ASX. In fact, it may even suit you better than your local stock exchange. Just think, depending on where you live, you might find ASX hours allow you to be an evening trader - a great way to start trading when you're still holding down a 9-5 job!
You'll also want to give some though to whether long-term or short-term trading suits you best. I like to "day trade" options. This means I never hold an option overnight. It means a lot to me to know my money is locked away in the bank overnight. I don't need to be lose sleep about whether my stocks might gap up or down each morning.
When investigating how to trade options, your chosen strategy should provide definite entry and exit points (to remove any doubt) and it must be based on excellent money management.
==THREE==Select your broker.
Today it's very easy to find good quality online brokers. Look for a broker who understand how to trade options, that has good prices and also provides free charting software. It's also nice to know your broker can take orders over the phone (as a safety net if your internet goes down). Browse the link to my how to trade options web site at the base of this article to see the broker I recommend at the moment
==FOUR==Paper trade your strategy.
With your basic knowledge, strategy and broker in place, it's time to get stuck into paper trading (i.e. practice trading with numbers, but not real money). When paper trading a new system, it's very important to execute every single trade as if it were real. I go to the extent of entering my order into my trading software - but I stop before clicking "buy". This gives me a feel for the speed of execution I will need to take my system live. When learning how to trade options, you really do need to make your experience as real as possible.
==FIVE==Go live.
Now it's time for the excitement! Always start small... just a couple of contracts will do. Most times one or two contracts will only break even of maybe bring you a small loss after brokerage, but that doesn't matter. Count it as a small education expense. The idea is to experience entering a real order in your trading platform. Once you have paper-traded for 6-12 weeks and you know your strategy creates profits, then by all means place full sized trades... and watch your bank account grow!
Now keep in mind, if you make a loss on your first few trades, don't give up. Re-examine your paper-trading statements to remind yourself that your strategy works! After all, you should only be trading with real money if your paper-trading showed profits in spite of expected losses. This business relies on letting profits run, and cutting losses short - combined with a satisfactory win/loss ratio. It's a game of probabilities, and your paper-trading will teach you that.
Trading Stocks and Forex Successfully
Trading is both a simple and fairly complex game. It depends how you approach it. Trading requires a neutral mind. Following rules is a key attribute of successful trading. Many failed traders already develop their mind of particular direction. Neutrality itself requires that there is no direction of market. Whenever there is a setup formed according to the given rules, one should act swiftly without hesitation. Here comes the discipline.
Successful trading in futures, emini, stocks, options, forex or any market requires sound strategies and discipline. Actually discipline is more important than strategies. Learning the top notch strategies will not make you successful unless you are committed to follow rules strictly. Sound strategy can be applied to all markets. There are some so-called analysts in the market whose rules apply to one market only and at particular time. Objective analysis covers every market pointing out multiple opportunities in a week for day trading as well as swing trading. If you manage your risk effectively you can do daytrading or swing trading in any market. Rules are usually same in every time frame whether it is emini, emini futures, commodity trading, futures trading, options, stocks. Stock trading itself presents numerous opportunities because there are countless stocks in stock market. Another huge market is a currency market. Currency trading usually called forex trading offers huge potential of income if you know how to limit your risk. Many reputed brokers are now offering forex trading. The key is how you discipline yourself and follow rules all the time.
Another mistake of new traders is to trade live immediately after learning to trade. Paper trading with discipline could give huge amount of confidence over a period of time. What differentiates successful traders from failed traders is right decision at right time. Tough mindset is required to trade every market in every time frame.
How to Be a Successful Day Trader
Step 1
Better to have at least $25,000 to become a pattern day trader (4x buying power). Stock market is risky. Please do only trade what you afford to lose.
If you make four or more day trades in a rolling five-trading-day period, you will be considered a pattern day trader no matter you have $25,000 or not. If your account equity falls below $25,000, a day trading minimum equity call will be issued on your account requiring you to deposit additional funds or securities.
Step 2
Open a stock brokerage margin account:
TradeKing
Etrade
TD Ameritrade
Step 3
Learn how to read candlestick chart and its pattern.
Technical analysis is the soul of day trading. Please take time to get familiar with all the tools you can use. Basically, you will just need to know simple average lines: 20 day and 50 day moving average line, MACD, RSI, and Volume.
Step 4
Rules to follow:
1) Everyone makes mistakes, cut loss early if you make a mistake.
2) After enter into a trade, do not buy more, just watch it rise and sell if you are happy with profit or hold it for 5 to 25 min. If you add more positon, bad thing would happen. Day trading is just like a thief stealing money from the stock market quick and once at a time, if you go back to steal more, they will catch you.
3) Day trading means quick profit, do not hold stock for more than 25 min. You can always sell with profit if it starts to fall from top, and then buy it back later if it turn out going upward again.
Step 5
You should develop your own system of day trading. Because each of us has different personality and a particular trading strategy might not fit for everyone. Happy trading and never stop learning!
Forex MegaDroid Review
It has been a long time since a Forex Expert Advisor made such waves as the new MegaDroid does. Before you read my review let me tell you something about me. I am a professional Forex trader for nine years now. I am testing the new Forex Robots and review them.
After my review I've found out three main reasons why this Robot is so impressive.
1. The Profitability
Of course a Forex Robot has to make positve trades. This is the main feature of an Expert Advisor. The developer tested their software for eight years and the results are more than clearly: Forex MegaDroid is extremely profitable and has an awesome ratio of 95%.
2. The new RCPTA - Artificial Intelligence Technology
Trading Robots have one major problem: They do not learn from the market. That means when the market fluctuates the trader make heavy losses. The Robots simply do not know how to react.
This MegaDroid is completely different. The Artificial Intelligence Technology allows the robot to learn from the market conditions. You have much lower risk!
3. Support and the Ease of use
Many Forex Robots are difficult to install and the support staff isn't really helpfull. With Forex Mega Droid you get videos on how to install the software.
As I know one of the developer I also know that they have six emplyees who provide guidance, they don't leave you hanging.
Finally I can say that because of this three reasons I definitely recommend this Forex Robot!
To read more about this software, click here: Forex MegaDroid Review.
The Case Against Day Trading
Things have not been going well for the day traders for quite some time. Indeed probably since the stock market Internet bubble blew up in 1999. Vast numbers of them have departed the scene since then having been whipsawed one time too many. The strange thing is that for every departure there is a replacement and sometimes two replacements or more. The lure of easy money is strong indeed. The overwhelming majority of these rookies are going to be blown out of the water in short order.
This essay is not addressed to this soon to be road kill. It is addressed to the old timer day traders who remember the glory days of the 90s when they had the world by the tail with a downhill drag and who can't figure out what went wrong.
The first thing to understand is the wisdom of the old Wall Street saying. " To never confuse genius with a bull market. " A bull market makes everyone look good except for the shorts. I am afraid however, that the problem goes much deeper than that. The simple truth of the matter is that there isn't much to learn about day trading. Everyone tries very hard to conceal this basic fact by using a great deal of mumbo-jumbo theories and strategies. These strategies can be broken down into two major subsets. These two strategies are technical analysis and "chasing the news" or if you are kinder than I am "trading the news." Mostly it is a concoction of both fortified with the latest, hot black-box formula. Which is usually but not always technical in nature that some propeller-head is promoting.
My dark suspicion is that the brutally short-term charts that you are compelled to use in day trading is so short as to render technical analysis worthless. Almost everyday some system seller comes up with a new system, which he claims has been back-tested to biblical times with great results. The back-testing that these system sellers are using is a joke. And for a very good reason. The truth is so ugly that no one wants to believe it.
All day trading systems without exception break down if you keep going back in time with your analysis. Every system in the end, no matter how well it works in the short term, is over the long term no better than a coin toss. The promoter will only back-test his hot, new system to the point were it starts to break down. He will then promote his system as having been back-tested from that point forward. He will of course remain silent about the problems that were encountered if you go back in time any farther. When this system breaks down, he will have a hot, new, improved system to sell to the same jerks who bought the original system.
Day Trading Rules and Regulations
It is one of the first, confusing facts for the neophyte trader. Day trading rules and regulations.
Let's say Bill wants to start trading stocks. He opens an account with an online broker. He funds it (puts money into the account) and he applies for a margin account (margin is the amount of money the broker allows Bill for trading, on top of his equity position). Bill puts in $5000 and his broker puts in $5000. Bill doesn't like the idea of holding stocks over-night, so he buys and sells his stocks on the same day. He does this three times in just his first day alone. Since he is new to day trading, he feels okay about just breaking even on his first day.
On day two, he does the same thing. And either before he executes the trade, or very soon afterward, he gets an email message from his broker. Something about a "margin call". The broker is demanding that Bill deposit an additional $20,000 into his account immediately since he is now considered a pattern day trader. Bill freaks out because he doesn't have $20,000. His palms get sweaty. He suddenly feels like a gambler who cannot repay his debts. And he anticipates a knock at the door any minute.
What Bill failed to do was to read the fine print supplied by his broker. It looked like standard contract stuff to him, so he just glossed over it. But if Bill had read the fine print regarding accounts, margins, day trading rules, and day trading regulations then Bill would have known not to do what he just did.
So, stated in simple terms (please read your broker's fine print), these are the day trading rules and regulations. If a trader makes a same day round trip transaction (meaning the trader buys and sells, or shorts and covers, the same stock in the same day), then that is considered a day trade. If the trader does this more than three times during a five-day period that the market is open, then the trader is considered a pattern day trader. And a pattern day trader is required to have at least $25,000 equity in that account. This is the S.E.C.'s rule, not the broker's rule. Lacking the $25,000, the broker is required to issue a margin call and demand that the trader deposit adequate funds to comply with the S.E.C.'s rules. Failure to do so can result in the broker closing that account.
So Bill has a choice. He can come up with the $20,000. Or, he can contact his broker, apologize on bended knee, and promise that it will never happen again. The broker will often forgive the first offense. But not the second one.
So, if you're new to day trading, then read the fine print. You can still day trade with less than $25,000. You just cannot do it more than three times in a five-day period.
Secret of Time Frames in Trading Systems
Trading Systems are built on top of technical analysis, which comprises of charts, indicators, oscillators, price patterns and etc. Just like the music, technical analysis is a universal language. Traders can apply technical analysis to any instrument in any market such as the Google stock in NASDAQ or the Japanese yen in Foreign Exchange (forex).
A typical chart consists of many bars; each bar represents prices which are open, high, low close of any specific period. A bar in weekly chart represents prices in a specific week while a bar in daily chart represents prices in a specific day.
Most traders analyze charts in only one period, usually daily. This is not enough; markets are too complex to be analyzed in only one period. Every time frame relates to its next higher and lower time frames.
The secret of time frame in trading system is to use at least two but not more than three to make a decision of any trade. This system is called "Triple Screen Trading System" introduced by Dr. Alexander Elder in his book "Trading For A Living".
For day-traders, they might choose the hourly chart as their favorite trading period. Then go immediately up to the daily chart as the higher order time frame to analyze the trend before making a decision to long or short. Traders might use any trend following indicator to identify a trend in the higher order time frame. Once the trend is identified, return to the favorite hourly chart to find where to enter, exit, take profit and stop loss. Traders might also go down to analyze the chart in lower time frame to find trailing stop.
Make Money From Forex Day Trading With the Forex Trading Machine
Do you have charts filled with colorful lines and multiple indicators? When one indicator says buy only to have the other say sell, do you want to scream in frustration? What if you could have a very simple forex day trading system that only depended on price action?
Successful foreign exchange currency trading requires a certain level of simplicity. However, you do need to maintain all the critical elements for a successful trading system. So do not over-simplify your trading systems to the point where they no longer work. Getting the right education is critical in order to develop properly as a currency trader.
What if making money in the FX market did not require the use of indicators? And what if you could trade profitably just by looking at price action alone?
The forex daytrading system, Forex Trading Machine, was developed by Avi Frister based on his Price Driven Forex Trading Concept. Using the strategies contained within this manual, you just need to look at price alone to determine your trade without using any other indicators.
You could save a lot of time, energy and frustration when you can chuck the use of multiple indicators out the window. With no more confusing and contradicting indicators to mess up your trading, you have made it a whole lot simpler.
In this currency day trading manual, you get three different trading strategies to capture profits in different trading scenarios. And to be a successful currency day trader, having a simple and tested trading strategy helps tremendously.
In order to become a successful day-trader, it helps tremendously when you focus on mastering a few currencies instead of every single one. When you narrow down your focus, you start to understand and recognize the trading behavior of currencies during specific times of the day. You also start to recognize the trading range for a specific currency, and how to capitalize on it.
The Forex Trading Machine has strategies that allow you to capitalize on trend and reversals in the currency markets. With the first strategy, you identify when a trend is beginning and getting in before everyone else. In the second strategy, you are shown how to capitalize on how a currency tends to move at a certain time of the day.
By sticking to trading using price action, Forex Trading Machine simplifies fx day trading down to the first thing that moves... price. By understanding price action and how to trade it, you make your FX day trading a lot simpler. For simple and effective forex day trading strategies based on price action, make sure you read my review on the Forex Trading Machine developed by Avi Frister.
Studying Price Action in Forex Trading
After learning various methods of trading Forex. It was obvious that there was something missing in my trading. After a massive quest for information over a 4 year period, It soon became clear that I was over complicating my trading. I soon became an avid fan of keeping things simple, and that meant studying clean raw 'price action.'
In the process of this massive search for quality trading information, I encountered trading methods which used nothing more than a raw forex price chart, that's right... nothing but price action!
One of the things that got my attention and something I have always been a fan of is the 'KISS' trading methodology, which is the acronym for 'Keep It Simple Stupid'. All this means is the more simple a strategy is, the easier it will be to follow and still to this day, I believe it to be the most powerful lesson learnt in my currency trading career.
Most traders plaster their charts with indicators hoping they are going to tell them something to give them an edge, Been there, done that, in fact I spent 4 years, chopping and changing from one thing to another which lead me to a spiral of solid declines in my trading account. It only changed for me when i completely removed all the mess, and that left only the candlesticks and the price lines.
The problem is, most indicators are based on Raw Price Action and only plot the indicator signal after the actual market has moved. This Makes them all lagging information, and almost useless for real world trading. I have found that studying price action is really the best way to get hints on where the market is headed because its first hand information, right there on your screen, with no magic at all.
In my opinion the best thing any trader can do is to learn a price action method and the real beauty of it is that that most simple price action based trading methods work with ALL markets. Not just Forex, so the doors really open up with this style of trading.
That's not to say it will be best for everyone but it's a very good place to start your own search. Good luck with your search.
Monday, August 10, 2009
Finexo – Fx Trading Broker Review
Finexo is an independent quality broker that has operated since 2003. While it may still be a young broker, they are definitely one of the most prolific brokers out there in the retail market. Let me give you some info on why you may want to trade with Finexo. First of all, Finexo is a white label of the market leader Saxo Bank and has been since 2004. Now, what does this mean for you? A white label is a company or broker that uses the same platform and operations as the ‘parent’ broker, which in this case is Saxo Bank. Saxo Bank is considered the market leader with their platform ‘SaxoTrader’. Finexo uses this technology, but where Saxo Bank is aimed at high end investors with high deposit minimums, Finexo is aimed at smaller investors as well. This is actually one of the goals of Finexo as you can read on their website. They aim to make forex trading as easy as possible.
Finexo does keep that promise, as it is indeed very easy to sign up for an account with them. I could literally start fx trading within no more than a few minutes after opening an account. Finexo follows the popular trends and allows you to depsoit and withdraw with many different options such as Paypal, Money Bookers, Neteller and more. That is a nice and convenient feature.
Finexo’s own platform is called ForexTrader and is a Saxo Bank derivative. That by itself is a guarantee for quality. SaxoTrader and ForexTrader is the best trading platform out there in my opinion. It is fast and reliable and has all the features you could ever want as a professional trader or as a beginner. They offer one click trading and tons of options to optimize your trading platform.
You also get the very convenient and functional mobile trading possibilities. You can trade from your cell phone or any computer that has a link up, you don’t need to download any software as they run a web application as well, that works surprisingly good. All of it is free of charge.
Finexo has perhaps the most available currency pairs available for trade, an impressive 50 currency pairs, including some exotic ones that you won’t see many other places. I like this added flexibility for traders. A big thumbs up for that.
Finexo has a low minimum deposit of only 25$. Of course you would probably want to deposit significantly more than that, but it is still a nice touch and allows beginners to test the waters before jumping in with the sharks.
The mini accounts have 200:1 leverage levels and spreads of 5 pip, while the classic account has 200:1 leverage and 3 pips spread. There is also the option of going for a VIP account with only 2 pip spreads.
Whats the conclusion then? Finexo is an established and respected broker that I can recommend with good conscience. I rank them at the very top of retail brokers.
Richest Man in the World
As you can see from the list below, Warren Buffet is currently the richest man in the world. Warren buffet has obtained his wealth through many successful investments over a period of more than 40 years. Slim Helu is second, he obtained his fortune partly through inheritence and partly through telecoms business. Number 3 is Bill Gates, founder of the Microsoft Corporation. I think we all know who microsoft are 
Warren Buffett $62 billion
Slim Helú $60 billion
Bill Gates $58 billion
Lakshmi Mittal $45 billion
Mukesh Ambani $43 billion
Anil Ambani $42 billion
Kamprad, Ingvar $31 billion
Kushal Pal Singh $30 billion
Oleg Deripaska $28 billion
Karl Albrecht $27 billion
When it comes to Forex trading, it shows that eevn relatively conservative returns can earn big in the long term. Warren Buffet has averaged around 24% per year over more than 40 years and he is the richest man in the world. 24% per year is certainly achievable for many experienced forex traders.
Forex For Dummies
So you have decided to learn how to trade Forex? Or maybe you are just curious about how you can make money from trading Forex? Let me just say: Good for you and welcome to the exiting world of fx trading where millions are made and lost every minute. The only financial market where the ‘little man’ has a chance to play ball with the big players. Why is this? First of all, the forex market is by far the largest financial market in the world. It’s actually bigger than all other markets combined. Take the stock market and the bonds market and pool them together and you are still far from reaching the daily numbers that you get on the forex market.
So what exactly is traded on the forex market and how is it possible to make many there? Forex is an abbreviation of Forex Exchange, basically it means foreign currencies. Foreign currency is so important because it is used on an everyday basis by people in all situations. Just like when we go for a vacation and change money into the local currency, corporations must also do so when they buy and sell abroad. Add to that, that there are many players in the game only to speculate and you have a market that is very big and very volatile.
There is no centralized market for forex such as a stock exchange or commodities exchange and there are no fixed prices. Forex is traded on the interbank market that only banks and brokers have access too. That means there can be significant differences in prices of currency from region to region and time to time as the market adjusts. This process of earning on price difference is called arbitrage but is usually not an option for the smaller investor.
Forex is traded in currency pairs, these are denoted by the abbreviated base currency first and then the secondary currency last. An example is USD/EUR.
You make money by either selling or buying a currency with a different currency. Lets say you buy Euro with your USD. Now if the relative price of the Euro goes up then you have made money as you can exchange those Euro’s into more USD than you originally paid for.
While the actual process of earning from Forex is easy, it is far more difficult to actually predict movements of currencies because there is so many factors influencing the price. You have economic, financial and political factors to take into account as well as the psychology of the market.
This is why traders develop forex trading systems. These can be based on either technical or fundamental analysis.
Technical analysis aims to predict the future movement of a forex pair by analyzing the trend graph of a pair looking for patterns that are likely to repeat themselves.
Fundamental analysis aims to predict prices by taking into account the underlying economic, financial and political movements of a currencies base country.
Both require skill and dedication to master and both are very profitable methods of making money in the forex market.
List of Forex Brokers
I have put together a list of forex trading brokers that I believe to be reliable, honest and reputable. However, no broker is perfect.
Forex Brokers in Switzerland
Dukascopy This Swiss Forex Broker has been around since 2004. The minimum account size is high at $50,000. There is no MT4 platform
Swissnetbroker – This Swiss Broker opened in 2005. The minimum account size is much lower than Dukascopy at just $200. They also offer ECN services.
UK Forex Brokers
Forex brokers in the UK are heavily regulated by the financial services authority, potentially making them safer than many brokers.
GNITouch Now owned by Man Financial, a FTSE 100 company. Minimum account size is 4,000 GBP.
Alpari (UK) Established in 2004 and offers the Metatrader 4 platform
USA Forex Brokers
In recent years many US Forex Brokers have gone bankrupt, remember Refco? I think to give yourself the best chance, it’s important to choose a large broker that is profitable.
FXCM This is perhaps the largest forex broker in the USA at retail level. They offer their own trading platform, but claim they will offer an MT4 Platform in the near future.
CMSForex This broker was established in 1999. They do not currently offer an MT4 platform, but the platform they use is easy to use.
Web Based Currency Trading
Oanda – Oanda is a reputable broker that has a good web based trading platform. They also have very low spreads
How to Choose the Forex Broker?
Choosing the right forex broker is one of the most important tasks faced by a beginning trader. Choosing the most suitable broker is as important as leverage, money management, and risk controls are, but it can be a complicated, difficult and arduous task. But don’t make any mistakes here: just as high leverage may wipe out your account and destroy your confidence in yourself and completely erase your belief in forex, choosing the wrong broker has the potential to end your trading career even before it has begun.
We’re not just speaking about a fraudster who poses as a broker here. The dangers associated with such ‘business partners” is self-evident, and we won’t waste your time discussing the obvious perils of associating with such people. The wrong broker that we discuss in this article is the broker who, while decent and legitimate, does not cater to your needs as a beginner, inculcates faulty practices in your trading style, or promotes the application of flawed strategies. So in this article we want to discuss those incompetent brokers, and unfriendly brokers, in addition to the fake brokers with which most people are familiar with.
Fake brokers steal your money, run your stops, and in general do their best to cause you as much hardship as possible. Incompetent brokers misquote prices, cannot execute orders in a timely and exact fashion, are unable to facilitate withdrawals properly, and basically don’t know what they are doing. Unfriendly brokers don’t care much about you: they keep initial deposit requirements, and minimum leverage high, so that the beginning trader has to learn how to swim in the middle of a storm. In addition, brokers that are unfriendly to their customers sometimes belittle retail traders due to their low net worth, and low rate of success in the markets. They will treat professionals and retail traders differently.
Of the above three, obviously, we should avoid the fake brokers at all costs. There’s nothing to be gained from trading with them, and a lot that can be lost. We need to keep a healthy distance between ourselves and the incompetent brokers as well. Even if they are decent, the service provided by them is often close to being useless due to the many problems involved. Unfriendly brokers are no use to retail traders either. They usually will see you as cannon fodder, as they offer their best spreads, greatest customization options to their wealthy clients. The unfriendly broker may sometimes be good for a wealthy, successful forex trader, but since most of us are not, we wouldn’t want to associate much with the group.
If these are the dangers involved, what should we do to screen and choose the right broker for our character and needs?
There are some very simple guidelines that we can utilize while picking the right choice for our needs. Aside from the obvious safety issues that necessitate regulatory cover and supervision, the first principle must be about minimum initial deposit requirements, and leverage options. If either of these is too high, we’d better look somewhere else, because as beginners we have very little chance of making successful use of these at this early stage. And remember also that if you can’t generate good returns in pips with a low-leverage position, there’s no possibility that you’ll do better with one that utilizes higher leverage. The second issue is about the availability of online teaching tools, and tutorials that are directed to beginners. If the firm takes the time to create these and publish them at its website, there’s a good chance that it targets the retail segment, and has to accommodate their needs and wishes as discussed before. The third criterion must relate to the trading platform: how reliable are the servers, how consistent are the spreads? Does the platform enable limit orders and trailing stops? Is every detail of the software discussed and explained in detail? How many pairs are there available for trading?
Indeed, the issues related to the trading platform are some of the most crucial in determining if a broker is suitable for us or not. The beginner does not need a trading software that is extremely powerful and feature-rich, because he doesn’t possess the knowledge and experience necessary for exploiting all those options just yet. However, ease of use, and user-friendliness are paramount to the beginner’s needs, because if he can’t be comfortable with even the basic aspects of the software, it is unlikely that he will find the extra energy necessary for analysis and the creation of strategies. So when you are screening brokers, make sure that you devote adequate time to examining and analyzing the software package.
Finally, is the customer support supportive enough and patient when issues inevitably arise? When there are misunderstandings, do they abide by the principle that the consumer is always right within reasonable limits? Can you get answers to your questions? The role of customer support is especially important because if issues arise on fund deposits or withdrawals, the troubles that result may be nerve-wracking, to say the least.
You should explore the responses to these questions, and beyond them, you ought to make sure that the offer of the broker matches your needs and expectations as precisely as possible. There are many brokers in the markets these days, and with sufficient effort, there is little doubt that you’ll find one that matches your needs eventually. This effort at the beginning will save you from lots regrets and headaches in the end, and may well make the difference between a career that ends at the beginning, and one that leads to unlimited riches.
