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Trading Tips
84. A Breakdown of the Forex Trading Day
Mar 9th
www.informedtrades.com A lesson on the major money centers of the world and the characteristics of each of the 8 hour forex trading sessions.
Forex Trading Tips – Trading For Too Much
Mar 6th
One big mistake many inexperienced traders make is placing too much money on one single trade. In this short article, I’m going to discuss why this is a potentially hazardous problem.
Other than the obvious fact that you’ll stand to lose a lot of money when you trade WITH a large principal amount, the other reason not to trade with too many lots is that you’ll begin to let your emotions take over your decision-making mechanisms.
Generally speaking, the more money you trade with, the more emotional you’ll start to feel about the trade… and this is exactly how thousands of traders wipe out their trading accounts in only a few short months! They get angry, scared and impatient when the trade starts turning sour… and this almost always leads to even worse damage control on the part of the losing trader.
Instead of cutting off his losses, the emotional trader tends to hang on to his unprofitable trade as it further erodes away his equity. Don’t make this mistake… it’s very possibly the worst thing that can happen to a trader in a single trade.
In day trading when there are many trades opened and closed, a couple of these large losses can empty your trading account very quickly. Experienced traders know not to expose their trading capital to too much risk in every trade that they make.
However, this doesn’t meant that you should place tight stop-loss levels… if you do that, chances are that you’ll get stopped out pretty often and still lose money anyway. The trick is to give an appropriate stop-loss allowance… too much or too little is bad for your financial trading health.
By: Harold Hsu
Other than the obvious fact that you’ll stand to lose a lot of money when you trade WITH a large principal amount, the other reason not to trade with too many lots is that you’ll begin to let your emotions take over your decision-making mechanisms.
Generally speaking, the more money you trade with, the more emotional you’ll start to feel about the trade… and this is exactly how thousands of traders wipe out their trading accounts in only a few short months! They get angry, scared and impatient when the trade starts turning sour… and this almost always leads to even worse damage control on the part of the losing trader.
Instead of cutting off his losses, the emotional trader tends to hang on to his unprofitable trade as it further erodes away his equity. Don’t make this mistake… it’s very possibly the worst thing that can happen to a trader in a single trade.
In day trading when there are many trades opened and closed, a couple of these large losses can empty your trading account very quickly. Experienced traders know not to expose their trading capital to too much risk in every trade that they make.
However, this doesn’t meant that you should place tight stop-loss levels… if you do that, chances are that you’ll get stopped out pretty often and still lose money anyway. The trick is to give an appropriate stop-loss allowance… too much or too little is bad for your financial trading health.
By: Harold Hsu
Forex Training – Pin Bar Forex Trading Strategy
Feb 26th
Forex Training – Pin Bar Forex Trading Strategy – www.learntotradethemarket.com
Forex Trading – Advanced Forecasting Methods For Profit
Feb 24th
Today we have advanced forecasting methods at our disposal as the power of computers has increased, they can do more in less time than ever before and the computer that sits on your desk top, is far more powerful than the one that helped land man on the moon. So let’s look at advanced forecasting methods in more detail…
Before we start lets quote a simple fact which may make you think.
Despite all the advances we have seen in technology over the last 20 years the ratio of winners to losers still remains the same – well over 90% lose and 10% win and make the big profits. So all these advances in technology and forecasting have done nothing in terms of increasing the ratio of winners and the reason is obvious!
Scientific methods CANNOT help when you are trading an odds based area like forex.
There is no scientific movement of prices and that’s obvious, because humans are emotional beings.
You will hear many people who say there is but if there was, we would all know the price beforehand and there would be no market.
I see lots of clever systems based on neural networks, chaos theory and artificial intelligence but most are junk and fail. Not because they are not clever but because scientific theories don’t work on a market that doesn’t move to a scientific formula!
If You Want to Win Understand This!
Simple systems work best as they are more robust than complicated ones, with fewer elements to break and are ideal forex trading an odds based market such as forex.
This has been the case since trading began and all the computer geeks and mathematicians who try and beat the market learn a lesson as the market beats up and destroys their equity.
The markets don’t reward you for being clever or having a complicated trading system, you get rewarded for being right with your trading signal – nothing more.
I always find it highly amusing when I see the sales copy for many systems and how they proudly say the developer is a mathematician, or wiz kid at physics – big deal. It proves nothing and these people tend to be the worst traders as they think being clever gives them a right to win and it doesn’t.
In forex trading all you need is a simple system, the confidence and discipline to follow it and you will probably beat any of the systems with fancy names, which are applied in the brutal world of forex trading and fail.
So forget advanced forecasting, stick with simple forecasting and you will find you will probably make a lot more money.
By: Kelly Price
Before we start lets quote a simple fact which may make you think.
Despite all the advances we have seen in technology over the last 20 years the ratio of winners to losers still remains the same – well over 90% lose and 10% win and make the big profits. So all these advances in technology and forecasting have done nothing in terms of increasing the ratio of winners and the reason is obvious!
Scientific methods CANNOT help when you are trading an odds based area like forex.
There is no scientific movement of prices and that’s obvious, because humans are emotional beings.
You will hear many people who say there is but if there was, we would all know the price beforehand and there would be no market.
I see lots of clever systems based on neural networks, chaos theory and artificial intelligence but most are junk and fail. Not because they are not clever but because scientific theories don’t work on a market that doesn’t move to a scientific formula!
If You Want to Win Understand This!
Simple systems work best as they are more robust than complicated ones, with fewer elements to break and are ideal forex trading an odds based market such as forex.
This has been the case since trading began and all the computer geeks and mathematicians who try and beat the market learn a lesson as the market beats up and destroys their equity.
The markets don’t reward you for being clever or having a complicated trading system, you get rewarded for being right with your trading signal – nothing more.
I always find it highly amusing when I see the sales copy for many systems and how they proudly say the developer is a mathematician, or wiz kid at physics – big deal. It proves nothing and these people tend to be the worst traders as they think being clever gives them a right to win and it doesn’t.
In forex trading all you need is a simple system, the confidence and discipline to follow it and you will probably beat any of the systems with fancy names, which are applied in the brutal world of forex trading and fail.
So forget advanced forecasting, stick with simple forecasting and you will find you will probably make a lot more money.
By: Kelly Price
Price Action Forex Trading Strategies Tutorial
Feb 21st
For More Price Action Forex Trading Strategies Video Tutorials Visit www.learntotradethemarket.com
Forex Day Trading System
Feb 18th
Now, many people are involved in forex trading. Among the different trading methods adopted, Forex day trading is a popular one. This system of trading means that the currency trading takes place in 24 hours only. If you want to buy or sell then it should take place in a day, according to this system. Here, either you can end up in gaining lots of profits or may end up in a loss. So, it’s quite unpredictable. People who are experienced in the Forex trading field can opt for this system, as they will know the various fluctuations in the market. They will be capable of predicting the rise or dip in the currency value. So, day trading is not an easy thing. So, if you are a newbie then it would better if you avoid this system at first. You can take up this system after gaining some experience in this trading field.
Most of the people who make profit from the day trading system are experienced ones. So, experience is an important factor which decides your success. Another factor is the capital. You must be ready to invest good amount of money in to this. Only then you can reap more profit. So, the risk involved is much high in day trading. So, use this system only if you are financially sound. Sometimes you may end up in a big loss also. It depends on your knowledge. You must have a clear cut plan. Then only you will succeed in Forex day trading. Another thing is that you must be ready with a back up plan. If something goes wrong then you must be able to withstand it with your back up. In this way, you can reduce your losses to an extent. If you don’t have a proper plan then it would be better not to go for a deal.
By: Ian Sani
Most of the people who make profit from the day trading system are experienced ones. So, experience is an important factor which decides your success. Another factor is the capital. You must be ready to invest good amount of money in to this. Only then you can reap more profit. So, the risk involved is much high in day trading. So, use this system only if you are financially sound. Sometimes you may end up in a big loss also. It depends on your knowledge. You must have a clear cut plan. Then only you will succeed in Forex day trading. Another thing is that you must be ready with a back up plan. If something goes wrong then you must be able to withstand it with your back up. In this way, you can reduce your losses to an extent. If you don’t have a proper plan then it would be better not to go for a deal.
By: Ian Sani
Forex Trading Software :: Interactive Course
Jan 30th
Learn-to-Trade-Forex.net Forex Trading Software Interactive Online Course
Forex Trading Education – The London Open Checklist
Jan 28th
A thorough Forex trading education must include an understanding of the effect market timings can have on trading and liquidity.
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.
The following questionnaire and checklist will help.
London Open Preparation
About 15 to 30 minutes before London open check the answers to these questions:
Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.On the 4 hour chart what is the overall trend?Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)Are any Economic Reports imminent?As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji’s or hammers indicating price exhaustion?If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?
Within a few minutes of London open, if you see a number of factors converging from the analysis above, make a decision one way or the other:
trade wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.
There is no magic formula involved with Forex trading education. Put simply, successful Forex trading is the result of years of hard work, study, practice, and experience often gained through painful trading scenarios.
Eventually the newer trader learns mental discipline, and how to control the emotions – probably the biggest part of a Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading.
By: Michael A Jones
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.
The following questionnaire and checklist will help.
London Open Preparation
About 15 to 30 minutes before London open check the answers to these questions:
Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.On the 4 hour chart what is the overall trend?Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)Are any Economic Reports imminent?As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji’s or hammers indicating price exhaustion?If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?
Within a few minutes of London open, if you see a number of factors converging from the analysis above, make a decision one way or the other:
trade wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.
There is no magic formula involved with Forex trading education. Put simply, successful Forex trading is the result of years of hard work, study, practice, and experience often gained through painful trading scenarios.
Eventually the newer trader learns mental discipline, and how to control the emotions – probably the biggest part of a Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading.
By: Michael A Jones
Testing a Forex Trading System Before Risking Money
Jan 24th
forextradingseminar.com Another of the “Forex Trading Secrets” that should be obvious to everyone. Find out yet another tactic that differentiates the successful traders from those who lose.