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Tuesday, March 16, 2010

Learn to Be a Successful Stock, Forex , Futures Trader With a Solid Trading Plan

Learning to trade the investment markets you need to have skill and knowledge. The successful traders have learned how to trade and cut their trading losses. Here are some ideas on how to learn to trade the stock, futures, forex markets.

1. You need to learn from the ground up. You need to educate yourself about what stock market you want to invest in. You need to learn that in trading you will have losses, trading is risky that's why you need to educate yourself. The more you learn about investing the more confidence you will have when you place a trade. To make money trading you need have your own trading strategy and have your own profit and loss objectives. You must developed this yourself from trial and error.

2. You need to learn to be flexible in your stock trading style,not everything in a trade is cut and dried. When you place a forex or futures trade from your own research you will be more successful. Take your time this is one of the secrets to profitable trading,don't be in a hurry just to place a trade out of boredom. Make sure to study the markets futures,forex or stocks.Try paper trading first to get confidence in an investment trading strategy. This will make you confidant when you start to use real money to trade with.

3. You need to developed a money management system that works for you. A plan of how much to put back into your account and how much to take out. This should be in percentages not dollar amounts. Most experienced traders try and profit 2% a day on the amount at risk in a trade. Make sure you set your targets and stops for each trade. Do not let your losses effect your confidence its part of any trading learning experience. If you have a loss do not try to force another trade hoping to make up the loss this is a big mistake.

4. If you decide to trade from home you need to have a quiet business type area to work in. Good computer equipment and high speed internet access. Try and keep distractions to a minimum this is a serious job if you want to make money. This is a job that you need continuing education on what the different markets are doing news, politics ,weather can effect your trades especially in the futures markets. Work on sticking with the task at hand. Keep notes on your day to day activity keeping losses small and let the profitable trades run. Learning to be a profitable trader takes time and effort in believing in yourself and your trading system.

(Source: ehow.com)

How to have Success with Forex Trading

Having an automated Forex trading system can give you an edge in Forex trading, but having a Forex strategy can give an upper hand. If you want to reap long term profits, then you just do not trade using your instinct or just because a particular trade excites you. You need a trading system or a strategy to make sure that you are getting solid trades and transactions.

1. A Forex strategy or system consists of rules that guide you on how to make trades in the Forex market. A Forex strategy or system provides information on when to enter a trade and how to exit the trade. It would also enable you to apply and use risk management rules.
There are ways to know if your Forex trading strategy is really successful or good.

2. • Start knowing how successful it has been in the past. It pays to know how much previous or existing users of the system have earned so far by using the strategy. Aside from that, also obtain some information on how much is the maximum draw down of the system in its previous trading.
There is a win-loss ratio wchich you can also check. It is about how much you have won compared with much you have lost. Aside from that, there is also a profit-loss ratio. This s about the average winning trade compared to the losing trade.
You would also have to know how consistent the system is in delivering profits.

3. When choosing a Forex strategy, you do not only have to factor-in the success rate and profit percentage. You would also need to consider your lifestyle and what system can be used to fit or suit it. You would have to know what Forex trading system can be used appropriately in your time zone.
A useful strategy used in Forex trade is what is called leverage. With the leverage strategy, you would earn about a hundred times the amount of the money that you are trading in your account. A lot of traders have testified that they were able to win a lot of profit by using this kind of strategy. So if you have a funded Forex account, you can use this strategy to get more profits.
Another strategy is the stop-loss order. This strategy works by identifying a point where you will not trade. This trading point is identified and determined before the trading begins. When using this kind of strategy, you would have to be able to analyze trading signals so you would not be mistaken with your prediction. If your predicted trade did not go on as you expected, the stop loss system could be very disadvantageous.

Tips and Warnings:
- Follow the rules for Forex trading.
- Know how to enter a trade and exit.
- Never guess when making trades.
- Be level headed when trading don't get into something that you can't be counted on for.

(Source: ehow.com)

How to Use Forex Strategy To Analyze The Market

What is Forex strategy? "Forex" is a currency exchange market and "Strategy" is a skill to make a plan to achieve goal. So Forex strategy is a plan of action to achieve goal in foreign exchange market. Plans are required because forex market is very risky and tricky market.

1. As foreign exchange market is the market of currencies, so the traders buy and sell currencies in order to make profit. This business of currencies requires a lot of patience and money as well. It might take many years to become a successful trader in this market so there should be a Forex strategy in order to become a successful trader. There are different types of traders, they may be short-term, medium term, and long-term. Short term traders are also known as scalper. Usually, most of the traders focus on medium term strategy which requires less investment.

2. The forex strategies could be basic, complex, simple or advance. A basic Forex strategy is helpful for beginners. In basic strategies, there are some rules defined for the beginners about How to trade? Simple forex strategies are not for experienced traders, it is for skilled beginners. Simple Forex strategies define the techniques of trading. Also, other strategies like complex, advance etc guide traders about trading. Before start trading, one should first practice with forex trading software. These softwares are helpful for the beginners and give them idea of market as well as idea of business. Also, it is good for the beginners to enhance their skills by "Mini forex trading".

3. Traders use Forex strategy in order to make wiser investment decisions. These strategies educate traders. While developing strategies one should must kept one thing in mind and thing is "risk" about the business as forex is a risky business.

4. Types of forex trading strategies:
There is still no golden rule for a strategy to be 100% accurate all the time. Along with Forex strategy practice and hard work is also required. In order to survive, forex market needs long-term investors, people who have greater economy and banks. In trading, forex strategies consist of two constituents: Technical analysis and Fundamental analysis.
- Technical analysis:
It is based on analysis of charts. It is also helpful if we are to analyze the boom and depression region of the market. Mathematical formulas are used to analyze the movement of market.
- Fundamental analysis:
In fundamental analyses, the economics of the countries are analyzed, as each day new figures are disseminated around the world.

5. Both above types of trading strategies are essential in making successful and profitable trades. If one of them is missing, it will not be help in successful trading. When we associate Forex Strategy with technical analysis then we are able to deal with price. When we talk about fundamental analysis or when Forex strategy is associated with fundamental analyses then we are able to deal with economic factors. So in order to become a successful trader, it is important that besides following forex strategies trader must show positive attitude towards his work. Also, it requires patience because earning money is not quick it takes time as well as hard work.
  1. www.master-forex-reviews.com offers unbiased reviews, tips, advice and techniques to help you improve your forex trading strategies and master the forex market.

    (Source: ehow.com)

Tuesday, March 2, 2010

Forex Trading Tips (Part 3)

Tip 16. Choose the right day to trade.
This recomendation is often wrongly taken as an optional thing, because everyone knows that Forex market is open 24 hours a day 7 days a week. Yet, choosing the time to trade can make a difference between successful and hopeless trading.

It's proved and highly recommended not to trade on Mondays, when the market has recently awaken and is making first "probation steps" to form a new or confirm a current trend; and on Fridays afternoon, during the huge volume of closing trades. The best days to trade are Tuesdays, Wednesdays and Thursdays.

Tip 17. Learn about Fibonacci levels and how to use them for trading.
Fibonacci can be very helpful in trading, even partially using the study, for example, to determine the best exit, can bring traders to a new edge of trading.

Tip 18. Always ensure that a signaling bar/candle on the chart is fully formed and closed before you enter a trade.
A golden rule of trading: "Always trade what you see, not what you would like to see" is the best explanation here.

Tip 19. If you someone else's to give you an advice on how and when to trade
in other words, choose to rely on live trading signals from other Forex traders, make sure you do it for your benefit, not for disaster. If you use such signals to discover how other traders do analysis and study on the price — you are on the right track and soon you'll be able to do analysis yourself. But if you're just blindly following recommendations and your only task is to push the correct button... think again.

Tip 20. Using a highly leveraged account comes at a cost.
It will, of course, give a trader more financial gear to trade, but for inexperienced traders high leverage, and, in fact, any Forex leverage can be disastrous. When a trader signs up for a high leverage without knowing how to accurately use it to own advantage, he simply signs up for additional risks that multiply with higher leverage in a tight "friendly" proportion.

Tip 21. Learn to measure trading success by the end of the day, week and then month and year.
Do not judge about your trading success on a single trade. To be successful traders don't need to win every trade, they also don't become rich in one trade — they need to be profitable in a long run.

Tip 22. There is no such thing as a secret approach to understanding the market.

Take the time to develop a solid trading system and find out that the secret to trading success lies in hard work and constant learning.

(Source: www.freeforextips.net)

Forex Trading Tips (Part 2)

Tip 8. Not trading or standing aside is a position.
When in doubt — stay out. If it is not clear where the market will move — don't trade. In this case saving your present capital is a better choice than taking additional risks and losing money.

Tip 9. Learn to use protective stops. Respect your stops and don't move them.
Hoping that market will turn in your direction is a very delusive hope. By moving a stop loss further a trader increases his chances to end up with a much bigger loss. When holding to a losing trade too long (even if funds permit) traders as a rule are very reluctant to accept big losses, thus often continue "hoping for the best". In the meantime invested money is stuck in a trade for unknown period of time (weeks and even months) and cannot be used for opening new positions. Not working money = dead money. Also this will result in constant interest payments for holding open positions (good if that interst is paid to you, but not good when you have to pay).

Tip 10. "Keep it simple, stupid" — applies to indicators, signals and trading strategies.
Too much information will create a controversial picture of when to trade and when not to. To avoid lots of confusion create a simple but working method of trading Forex.

Tip 11. Think about risk/reward ratio before entering each trade.
How much money can you lose in this trade? How much can you gain? Now, make a decision if the trade is worth entering. Example: if trader is looking for possible 35 pips gain and possible 25 pips loss, such conditions are not worth trading. Compare it with the situation when a trader has 50-100 pips of potential gain and only 10-20 pips of possible loss. This is the trade to open!

Tip 12. Never add positions to a losing trade. Do add positions when the trade has proven to be profitable.
Don't allow a couple of losing trades in a row become a snowball of losing trades. When it is obviously not a good day, turn the monitor off. Often not trading for one day can help to break a chain of consecutive losses. Trying to get revenge can often make things worse.

Tip 13. Let your profits run. Let your position be open for as long as the market wishes to reward you. Of course, for this traders need a good exit strategy, otherwise they risk to give all profits back...

Running two or more open trades gives an option to close some positions earlier and keep others running for higher profits.

Tip 14. Cut your losses short.
It's better to finish unpofitable trade quickly than wait for the situation to get worse. Don't put a stop loss too far — it's your money you risk. Better calculate the best spot to enter when a potential loss would be minimized. Again: respect your stop and don't move it "cherishing hopes".

Tip 15. Trade currency pairs in respect to their active market hours.

Learn about overlapping market hours: when two markets are open and highest volume of trades is conducted.

For example, Australian and Japanese trading sessions are overlapped from 8pm to 1 am EST. At that time trader can successfully trade AUD/JPY currency pair.

(Source: www.freeforextips.net)

Forex Trading Tips

Tip 1. Gamblers go to casino. All unproved, spontaneous actions in Forex trading — are a part of pure gambling. Any attempt to trade without analysis and studying the market is equal to a game. Games are fun except when you lose real money...

Tip 2. Never invest money into a real Forex account until you practice on a Forex Demo account! Allow at least 2 months for demo trading. Consider this: 90% of beginners fail to succeed in the real money market due to lack of knowledge, practice and discipline. Those remaining 10% of successful traders had been sharpening and shaping their skills on demo accounts for years before entering the real market.
A good demo account to start practicing with could be, for example, FXGame from Oanda.

Tip 3. Go with the trend!
Trend is your friend. Trade with the trend to maximize your chances to succeed. Trading against the trend won't "kill" a trader, but will definitely require more attention, nerves and sharp skills to rich trading goals. When a trend is up you don't want to be selling. When a trend is down, you don't want to be buying.

Tip 4. Always take a look at the time frame larger than the one you've chosen to trade with.
It gives the bigger picture of market price movements and thus helps to clearly define the trend. For example, when trading with 15 minute time frame, take a look at 1 hour charts.

In the same way: trading with 1 hour charts would require obtaining a picture of daily, weekly price movements.

If a trend in Forex is hard to spot — choose a bigger time frame. Up and down market patterns are always present. Make sure you know the dominant trend, unless you are a scalper. Scalpers have no need to spend their time studying large trends, instead what's happening in the market here and now (on 1-5 minute time frame) is their main concern.

Tip 5. Never risk more than 2-3% of the total trading account. One important difference between a successful and an unsuccessful trader is that the first is able to survive under unfavorable market conditions, while an unsuccessful trader will lose his account after 10-15 unprofitable trades in a row. 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. A quick fact to get your mind thinking about money management: losing just 50% of you account balance requires making 100% return only to restore the original balance.

Tip 6. Put emotions down. Trade calm.
Don't try to revenge after losing a trade. Don't be greedy by adding lots of positions when winning. Overreaction blocks clear thinking and as a result will cost you money. Overtrading can shake your money management and dramatically increase trading risks.

Tip 7. Choose the time frame that is right for you.
Choosing wisely means that you are comfortable and have enough time to analyze the market, place and close orders etc. Some people can't wait for hours for the price to make a move, they like action and therefore prefer smaller time frames. On the contrary, for others 10-15 minutes is a hustle to be able to make the right decision.

(Source: www.freeforextips.net)

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