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forexoffice.ca presents: Forex Money Management
Jul 25th
Stan kajzerek, Professional Forex Day-Trader and Forex Coach; Forex Education.
Trade Man -Forex Money Management Indicator
Jul 23rd
Today we show a commercial product rather than one of the free indicators on our site at www.forex-tools-cafe.com Trade Man (short for Trade Management) is a compact display of your trading situation. It shows what you have to risk based on your account size and your desired maximum risk percentage. It also keeps a running tally of your open trades across any currency pairs. The money is always shown in your account deposit currency even if you are trading two other currencys. It tells you …
Forex Trading – Five Tips to Make Money Fast!
Jul 22nd
This article is all about FOREX trading to make you rich – and we’re going to give some alternatives to conventional investment wisdom. Why? – Because most traders in FOREX follow the norm and make average gains – while this article is about making spectacular gains from FOREX Trading and making money fast!
The Aim
Here we are going to assume you know how to trade, and you have a methodology for FOREX trading you are happy with, and can apply with discipline.
What we are going to show you here, is how to change your system from making average gains, to making spectacular gains, with simple changes in trade selection, money management, and mindset.
FOREX trading offers the opportunity to make money fast – so lets see how it can be done.
1. Accept Volatility and Risk Cheerfully
All good FOREX trading systems incorporate volatility.
You can’t have a profitable FOREX trading method without taking calculated risks, and taking losses – if you can’t accept risk, then don’t trade.
Many traders back away from a market because it’s too risky – however, risk also means reward! If you are a trader who doesn’t like volatility, then go and find something else to do.
Drawdowns are part of trading; it’s volatile markets that make FOREX trading fun and highly profitable.
To the well-informed FOREX trader, a drawdown is not something to fear, but something to enjoy.
Remember: volatility = big opportunity!
2. Trade Infrequently
Many traders trade frequently and always like to be in the market. They think that in FOREX trading if they are not in the market, they will miss a move, or that by trading more frequently, they will make money – wrong!
The big moves in FOREX trading, with the best risk to reward, come a few times a year, and you should trade infrequently.
Focus on the trades that make the really big gains
3. Don’t Diversify
Diversification is an accepted wisdom, believed by most investors in Forex trading, but it won’t make you money fast, – it will do the exact opposite.
4. Money Management
So far, you may think that we are being a little rash, but this is not the case.
We are focusing on the BIG opportunities that allow us to make meaningful gains, and this is actually, where money management becomes so important.
If you are taking risk, you need to control it – risk as much as 10% per trade, but increase your chances of success by:
1. Buying options at or in the money, to give you staying power – and prevent yourself from getting stopped out.
Many traders lose, not because they were wrong in market direction – they just were stopped out by a volatile counter move – and options will give you staying power.
2. Many traders start trailing their stops to close, they then get stopped out – but the trade runs on to make spectacular gains. Don’t fall into this trap – keep your stop in its original position – until the move is well in profit, before moving it up.
You’re looking to make money fast, and you’re trading selectively – so have the guts to go for a trade when it looks good – and milk it for all it’s worth.
5. Understand the Power of Compound Growth
IN FOREX trading the way to make money fast, is to understand the power of compound growth. For example, if you target 50% a year in your trading, you can grow an initial $20,000 account, to over a million dollars, in under 10 years.
By: Stephen Todd
The Aim
Here we are going to assume you know how to trade, and you have a methodology for FOREX trading you are happy with, and can apply with discipline.
What we are going to show you here, is how to change your system from making average gains, to making spectacular gains, with simple changes in trade selection, money management, and mindset.
FOREX trading offers the opportunity to make money fast – so lets see how it can be done.
1. Accept Volatility and Risk Cheerfully
All good FOREX trading systems incorporate volatility.
You can’t have a profitable FOREX trading method without taking calculated risks, and taking losses – if you can’t accept risk, then don’t trade.
Many traders back away from a market because it’s too risky – however, risk also means reward! If you are a trader who doesn’t like volatility, then go and find something else to do.
Drawdowns are part of trading; it’s volatile markets that make FOREX trading fun and highly profitable.
To the well-informed FOREX trader, a drawdown is not something to fear, but something to enjoy.
Remember: volatility = big opportunity!
2. Trade Infrequently
Many traders trade frequently and always like to be in the market. They think that in FOREX trading if they are not in the market, they will miss a move, or that by trading more frequently, they will make money – wrong!
The big moves in FOREX trading, with the best risk to reward, come a few times a year, and you should trade infrequently.
Focus on the trades that make the really big gains
3. Don’t Diversify
Diversification is an accepted wisdom, believed by most investors in Forex trading, but it won’t make you money fast, – it will do the exact opposite.
4. Money Management
So far, you may think that we are being a little rash, but this is not the case.
We are focusing on the BIG opportunities that allow us to make meaningful gains, and this is actually, where money management becomes so important.
If you are taking risk, you need to control it – risk as much as 10% per trade, but increase your chances of success by:
1. Buying options at or in the money, to give you staying power – and prevent yourself from getting stopped out.
Many traders lose, not because they were wrong in market direction – they just were stopped out by a volatile counter move – and options will give you staying power.
2. Many traders start trailing their stops to close, they then get stopped out – but the trade runs on to make spectacular gains. Don’t fall into this trap – keep your stop in its original position – until the move is well in profit, before moving it up.
You’re looking to make money fast, and you’re trading selectively – so have the guts to go for a trade when it looks good – and milk it for all it’s worth.
5. Understand the Power of Compound Growth
IN FOREX trading the way to make money fast, is to understand the power of compound growth. For example, if you target 50% a year in your trading, you can grow an initial $20,000 account, to over a million dollars, in under 10 years.
By: Stephen Todd
Trading Forex Without A Money Management Plan?
Jul 17th
It can be very alluring to take your credit card out of your wallet in order to take advantage of a great trade opportunity in your top Forex trading strategy. However, prior to taking that credit card out, reflect that without sensible money management you could empty your account faster than you realize.
No form of investment is a guaranteed money maker and Forex is not an exception. In fact due to the quantity of leverage available to traders and investors in the Forex market, greed can quickly take over and all commonsense is thrown out the window. Experienced investors and traders realize that many of their trades, even up to half of their trades, will lose money. The reason why they are successful is that they have a good money management plan so when they do lose it doesn’t empty their account.
In any Forex trading strategy, there will be a drawdown. The trouble is, we don’t know when the drawdown will begin. If a Forex trading strategy proves it is 80% successful, that means approximately 20 out of every 100 trades will not be successful. If those 20 trades happened all in a row (yes, it does happen!) your account could be completely wiped out if you aren’t using sensible money management and you wouldn’t be able to keep trading the strategy for the following 80 potentially good trades.
Some aggressive Forex traders claim that the only way to accumulate massive profits fast is to risk more of your capital. While this may be true, it’s also the fastest way to lose all your capital and should really be thought of as gambling. There are a lot of stories around about those that made their first million trading Forex and then lost it. The more successful Forex traders and investors did not get rich quick, they took a slow and steady attitude and learnt to make money trading Forex for the long-term.
An experienced Forex trader only risks a low percentage of their investment capital on each trade. The profits will be smaller than those of the aggressive trader, but when the drawdown hits, the Forex trader practising sensible money management will be better prepared to weather the storm.
Of course, building up capital slowly isn’t an exciting strategy. But, you’re in the Forex market to generate consistent profits, not for the excitement. If you’re not using sensible money management when investing and trading the Forex market, you are essentially gambling. Even professionals that earn a living playing poker and other casino games use some sort of money management strategy. They realize that they can’t win every single tournament or game they enter, so they only risk a low amount of their bankroll on each one. This allows them to recover much more quickly when a losing run hits.
In conclusion, don’t allow the promise of making money fast let all commonsense be dismissed. Trading Forex is not a way to get rich fast, it’s an investment option that can make steady profits for those who practise sensible money management.
By: Jon Provencher
No form of investment is a guaranteed money maker and Forex is not an exception. In fact due to the quantity of leverage available to traders and investors in the Forex market, greed can quickly take over and all commonsense is thrown out the window. Experienced investors and traders realize that many of their trades, even up to half of their trades, will lose money. The reason why they are successful is that they have a good money management plan so when they do lose it doesn’t empty their account.
In any Forex trading strategy, there will be a drawdown. The trouble is, we don’t know when the drawdown will begin. If a Forex trading strategy proves it is 80% successful, that means approximately 20 out of every 100 trades will not be successful. If those 20 trades happened all in a row (yes, it does happen!) your account could be completely wiped out if you aren’t using sensible money management and you wouldn’t be able to keep trading the strategy for the following 80 potentially good trades.
Some aggressive Forex traders claim that the only way to accumulate massive profits fast is to risk more of your capital. While this may be true, it’s also the fastest way to lose all your capital and should really be thought of as gambling. There are a lot of stories around about those that made their first million trading Forex and then lost it. The more successful Forex traders and investors did not get rich quick, they took a slow and steady attitude and learnt to make money trading Forex for the long-term.
An experienced Forex trader only risks a low percentage of their investment capital on each trade. The profits will be smaller than those of the aggressive trader, but when the drawdown hits, the Forex trader practising sensible money management will be better prepared to weather the storm.
Of course, building up capital slowly isn’t an exciting strategy. But, you’re in the Forex market to generate consistent profits, not for the excitement. If you’re not using sensible money management when investing and trading the Forex market, you are essentially gambling. Even professionals that earn a living playing poker and other casino games use some sort of money management strategy. They realize that they can’t win every single tournament or game they enter, so they only risk a low amount of their bankroll on each one. This allows them to recover much more quickly when a losing run hits.
In conclusion, don’t allow the promise of making money fast let all commonsense be dismissed. Trading Forex is not a way to get rich fast, it’s an investment option that can make steady profits for those who practise sensible money management.
By: Jon Provencher
Forex Swing Trading with Elliott Wave
Jul 17th
When evaluating the forex market for swing trade opportunities the focus is placed on predicting directional changes or continuations for a given currency pair. For this we rely on technical analysis.
In technical analysis, just as in fundamental analysis, there are lagging indicators and leading indicators. One of the most reliable tools used to predict forex market swings is Elliott Wave analysis. Elliott Wave analysis can be used to identify trends and countertrends, trend continuation or exhaustion and to evaluate the potential price targets of a trend.
You can apply Elliott Wave analysis to both long and short position swing trade set ups for your currency pairs.
Elliott Wave theory is named after Ralph Nelson Elliott, who concluded that the markets moved in a repetitive pattern of waves. He attributed this action to the mass psychology of the market.
Elliott concluded that the market’s movement was a direct result of the mass psychology of the time and that the stock market is a fractal. A fractal is an object that is similar in shape, but at different scales. A great example of a fractal in nature is a stalk of broccoli. The stalk and the individual branches look exactly the same; just the branches are smaller in scale.
Fractals just happen to form in accordance with Fibonacci ratios. Is this a coincidence?
Elliott attributes this mass psychological move to the human trait of herding. Even though Elliott’s theories were based on stock market price movements, it has been applied to evaluating Presidential approval ratings and fashion trends changes as well.
The conclusion, the market price actions are not the cause of economic growth or slow down, but the reflection of the mass psychology of investors. If the mood of the investing public is upbeat then a bull market ensues. This is counter to what most individual perceive, that because there is a bull market the mood of the investing public is upbeat.
Elliott Wave patterns follow a sequence that the markets move up in a series of 3 waves and down in a series of 2 waves. This 3 wave impulse and 2 wave corrective sequence form the foundation of the 5 Wave impulse pattern (the opposite is true in a downtrend).
The Elliott Wave Counts are as follows;
Wave 1 – Short Covering
In technical analysis, just as in fundamental analysis, there are lagging indicators and leading indicators. One of the most reliable tools used to predict forex market swings is Elliott Wave analysis. Elliott Wave analysis can be used to identify trends and countertrends, trend continuation or exhaustion and to evaluate the potential price targets of a trend.
You can apply Elliott Wave analysis to both long and short position swing trade set ups for your currency pairs.
Elliott Wave theory is named after Ralph Nelson Elliott, who concluded that the markets moved in a repetitive pattern of waves. He attributed this action to the mass psychology of the market.
Elliott concluded that the market’s movement was a direct result of the mass psychology of the time and that the stock market is a fractal. A fractal is an object that is similar in shape, but at different scales. A great example of a fractal in nature is a stalk of broccoli. The stalk and the individual branches look exactly the same; just the branches are smaller in scale.
Fractals just happen to form in accordance with Fibonacci ratios. Is this a coincidence?
Elliott attributes this mass psychological move to the human trait of herding. Even though Elliott’s theories were based on stock market price movements, it has been applied to evaluating Presidential approval ratings and fashion trends changes as well.
The conclusion, the market price actions are not the cause of economic growth or slow down, but the reflection of the mass psychology of investors. If the mood of the investing public is upbeat then a bull market ensues. This is counter to what most individual perceive, that because there is a bull market the mood of the investing public is upbeat.
Elliott Wave patterns follow a sequence that the markets move up in a series of 3 waves and down in a series of 2 waves. This 3 wave impulse and 2 wave corrective sequence form the foundation of the 5 Wave impulse pattern (the opposite is true in a downtrend).
The Elliott Wave Counts are as follows;
Wave 1 – Short Covering
Wave 2 – Pullback from Short Covering
Wave 3 – Major Rally Phase
Wave 4 – Institution Pause in the Rally
Wave 5 – Retail Buying
Wave 1 is usually the weakest of the impulse waves. It is a brief rally based on short covering of the bears from a previous move down. When Wave 1 is complete, the currency pair sells off, creating Wave 2.
Wave 2 ends when the market fails to make new lows. You often see dominant reversals patterns form at the end of this wave signaling the being of the rally phase or Wave 3.
Wave 3 is the longest and strongest of the impulse waves. This signals strong currency buying or selling in the direction of the trend. This trend usually starts of slowly, but tends to accelerate as it breaks to new highs above the top of Wave 1.
Like any trend, especially a strong trend a correction will occur. Traders will begin to take profits and the currency pair will retrace. This signals the beginning of Wave 4.
Again the currency pair will rally ushering in the Wave 5 rally. Wave 5 is typically supported by the retail traders and not institutional buyers (the herd) and tends to lack the momentum generated in the Wave 3 rally. This creates divergence that can be easily measured on any technical oscillator. After the currency pair breaks to new highs above the previous Wave 3 high, the rally loses steam and changes trend.
This trend change can result in either a new 5 Wave impulse pattern or a corrective in nature.
Now that we know what the Elliott Wave analysis is, how would a currency trade using this analysis look like, just as an example?
Look to Wave 5 as the most reliably tradable impulse wave. The trade sets up as follows. Look for the Elliott Oscillator to pull back between 90% and 140% of the Wave 3 high on a daily chart. This pullback should correspond to a 38%-62% Fibonacci retracement from the Wave 2 extension. This signal is the strongest when the Fibonacci retracement is between 38% – 50%.
Like any technical analysis tool you never want to employ an indicator as a stand alone analysis tool. A trigger and a confirming indicator are required as well.
Look for a trigger in candle patterns, such as Harami, Tweezers or Harami cross. There are a variety of software packages on the market that perform Elliott Wave counts and have other entry signal indicators as well.
Draw a regression channel on the Wave 4 retracement and look for a break above or below the channel as confirmation to enter the trade.
Place stops at the high of the Wave 1 advance, just below the 38% Fibonacci retracement level or where your individual trading plan dictates. Trail your stops once the currency pair has advanced past the Wave 3 high. Look for reversal candle patterns like doji, hammers, shooting stars or hanging mans for signals that the wave is about to end or stall. A typical price target is 127% retracement of the Wave 4 low.
This is just a glimpse of how Elliott Wave analysis can be deployed to enhance your forex swing trade evaluations. Look more into the Elliott Wave theory and other strategies as tools for increasing your forex swing trade opportunities.
By: Todd Judkins
Forex Money Management: The Truth About How to Grow Your Account
Jul 16th
This is a money management video that all new and non-disciplined forex traders can use to tame leverage, and use reasonable amounts of money to trade with.
Forex Pivot Point Trading
Jul 16th
Learn how to make money trading the foreign currencies using Pivot Points … forex trading daytrading technical analysis profits euro dollar currency learn FX easy pivot points
Forex Trading Robots – Why Most Automated Trading Systems Sold Will Destroy Your Equity
Jul 11th
There more popular than ever and greedy investors think they are going to get rich quickly with no effort. The reality check is almost all robots will destroy your account equity quickly…
95 – 98% of robots I see on the net have not even been traded!
The track record has this disclaimer on it.
Look for it in the small print if you see it and read it you will understand why it probably will fail miserably:
“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
then of course the statement that makes the track record no use at al in determining profitability:
Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.
Now what is the logic of having a track record that has never been traded and what does it tell you?
Does it indicate anything about the profitability of the system – NO
Of Course it doesn’t and it’s a wonder that these track records are allowed to be used to sell to the public. Most of the time the traders buying the system don’t dig to deep and are generally trusting throw in some good copy and there soon buying the system.
I always read about how these forex robots are sold by ex bank traders etc – there not, there sold by marketing companies looking to tap into the huge market in forex trading products.
You can make money in forex but an automated trading system that has never been traded is not the way to do it. Let’s make one point clear:
Forex trading is NOT as easy as giving a few hundred dollars and buying success in a box – life isn’t like that!
You need to get the right forex education and do your homework – if you want to buy a forex trading system you can find some good ones with track records if you shop around – but never ever buy one with a simulation.
You could trying writing to the vendor and ask for his track record audited over say 2 years and see if you get a reply but don’t hold your breath.
By: Monica Hendrix
95 – 98% of robots I see on the net have not even been traded!
The track record has this disclaimer on it.
Look for it in the small print if you see it and read it you will understand why it probably will fail miserably:
“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
then of course the statement that makes the track record no use at al in determining profitability:
Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.
Now what is the logic of having a track record that has never been traded and what does it tell you?
Does it indicate anything about the profitability of the system – NO
Of Course it doesn’t and it’s a wonder that these track records are allowed to be used to sell to the public. Most of the time the traders buying the system don’t dig to deep and are generally trusting throw in some good copy and there soon buying the system.
I always read about how these forex robots are sold by ex bank traders etc – there not, there sold by marketing companies looking to tap into the huge market in forex trading products.
You can make money in forex but an automated trading system that has never been traded is not the way to do it. Let’s make one point clear:
Forex trading is NOT as easy as giving a few hundred dollars and buying success in a box – life isn’t like that!
You need to get the right forex education and do your homework – if you want to buy a forex trading system you can find some good ones with track records if you shop around – but never ever buy one with a simulation.
You could trying writing to the vendor and ask for his track record audited over say 2 years and see if you get a reply but don’t hold your breath.
By: Monica Hendrix
Forex Online Trading Course
Jul 10th
Are you looking for a highly successful Forex online trading course? This trillion dollar market is the largest volume trading market in the world, with money changing hands between a wide variety of participants every day that includes large financial institutions, investment firms and small investors like you and me.
Most of the currency rate movements are caused by the large financial players due to changes in demand and supply in different currencies. As these transactions are being made, smaller investors like institutions and single investors can profit from the activity by speculating in the direction of movement of the currency rate.
1. Signing Up for a Forex Online Trading Course
Before you can expect to make any money from the currencies market, you should get a good education first by joining a Forex online trading course. These types of courses will give you a good idea of how the markets work in general and help you realize the dangers as well as the potential profits that can be made trading the Forex.
2. Profiting with Forex Automated Trading Software
If you have absolutely no experience but you want to start making money immediately, you can choose to download automated software that can start making money automatically while you learn how it trades the market.
3. How to Start Profiting from the Forex Market?
You will need to sign up for a live account to start making real money with Forex trading. If you have no idea of how your trading system works yet, you should get a demo account to practice on it and get familiar with it first.
4. How is Forex Online Trading Different from Trading other Financial Markets like the Stock Market?
The currencies market is much more liquid and provides much more margin for profit due to increased leverage. It is extremely liquid compared to the stock market, and you can be sure that your trades will be successfully executed as there are always buyers and sellers, unlike certain stocks that can be very illiquid.
By: William Barnes
Most of the currency rate movements are caused by the large financial players due to changes in demand and supply in different currencies. As these transactions are being made, smaller investors like institutions and single investors can profit from the activity by speculating in the direction of movement of the currency rate.
1. Signing Up for a Forex Online Trading Course
Before you can expect to make any money from the currencies market, you should get a good education first by joining a Forex online trading course. These types of courses will give you a good idea of how the markets work in general and help you realize the dangers as well as the potential profits that can be made trading the Forex.
2. Profiting with Forex Automated Trading Software
If you have absolutely no experience but you want to start making money immediately, you can choose to download automated software that can start making money automatically while you learn how it trades the market.
3. How to Start Profiting from the Forex Market?
You will need to sign up for a live account to start making real money with Forex trading. If you have no idea of how your trading system works yet, you should get a demo account to practice on it and get familiar with it first.
4. How is Forex Online Trading Different from Trading other Financial Markets like the Stock Market?
The currencies market is much more liquid and provides much more margin for profit due to increased leverage. It is extremely liquid compared to the stock market, and you can be sure that your trades will be successfully executed as there are always buyers and sellers, unlike certain stocks that can be very illiquid.
By: William Barnes
Forex Money Management Systems
Jun 29th
Are you looking for the highest returns and lowest risk Forex money management systems? Many traders have very profitable trading methods that they have learned from experienced professionals, yet they continually lose money because they do not know how to manage their money properly. In this article, I will demonstrate to you why Forex money management is so crucial and why it may even be more important than your main trading system.
1. Examples of How Important Forex Money Management Systems Are
Let’s say for example that a person has a trading system that has generated 80% returns historically. He gets very excited and thinks that he can trade with big lots since the chances of winning trades is very high. However, he failed to consider the fact that he may start experiencing the 20% of losses first before he starts enjoying the 80% of winning trades. Without proper management rules, the trader may lose his entire account even before he starts profiting.
Another point to note is that a percentage loss first requires a bigger percentage win later to break even. For example, a trading capital with $1,000 experiencing a 10% loss will end up at $900. A 10% win later and the account will end up at $990. In this case, the trader would need to make a profit of 11.11% to break even.
2. Why is it Necessary to Have Tight Money Management Systems?
As demonstrated by the examples above, no one can anticipate when profits or losses will be made. Measures need to be taken just in case the losing trades happen first.
3. Getting Automatic Forex Management Systems with Trading Robots
One way to deal with these issues easily is to download trading robots that trade automatically. This type of trading software reduces trading lots automatically when the capital goes down. I personally use them and I do not need to worry about managing my capital any more.
By: William Barnes
1. Examples of How Important Forex Money Management Systems Are
Let’s say for example that a person has a trading system that has generated 80% returns historically. He gets very excited and thinks that he can trade with big lots since the chances of winning trades is very high. However, he failed to consider the fact that he may start experiencing the 20% of losses first before he starts enjoying the 80% of winning trades. Without proper management rules, the trader may lose his entire account even before he starts profiting.
Another point to note is that a percentage loss first requires a bigger percentage win later to break even. For example, a trading capital with $1,000 experiencing a 10% loss will end up at $900. A 10% win later and the account will end up at $990. In this case, the trader would need to make a profit of 11.11% to break even.
2. Why is it Necessary to Have Tight Money Management Systems?
As demonstrated by the examples above, no one can anticipate when profits or losses will be made. Measures need to be taken just in case the losing trades happen first.
3. Getting Automatic Forex Management Systems with Trading Robots
One way to deal with these issues easily is to download trading robots that trade automatically. This type of trading software reduces trading lots automatically when the capital goes down. I personally use them and I do not need to worry about managing my capital any more.
By: William Barnes