Million Dollar Forex Investing Mistakes

Anytime that you are investing in the Forex market, you are going into the Market blind. You don't know what point of the investing trend you are entering in at. You might be investing in a Forex stock just before the trend changes. Smart investing means you need to protect your trading float and set up a stop loss. This needs to be done before you enter a trade, so that there is no room for error, or last minute indecision. A stop loss is simply a predefined point at which you exit the stock.

Effectively, it's like drawing a line in the sand underneath the share price, saying, "If the share price falls below this line, then the stock hasn't done what I thought it was going to do, and I'll exit the position."

This allows you to protect your investing trading plan, because it cuts your losses short, and guards against an all too human tendency to want to believe you must be right.

95% of investing in an entry Forex position means you are expecting to profit from the trade. If, however, the share-investing price goes against you, you might feel the need to justify why you bought the stock by holding onto it until it turns a profit. You might have heard the idea that all big investing losses once started as small losses. Well, while the share price continues to go in the wrong direction, those losses grow in lockstep. This is why you need to have a stop loss in place — it's like having an ejector seat that tells you when to abort the mission.

One of the most common question I'm asked when traders are introduced to a stop loss is "How wide should I set my stop?"

In other words, how much room should I give the stock to move? There are no definitive answers to this question because it depends on what time frame you're investing in. If you're a shorter-term investing trader, you're going to have a stop loss that's set closer to the share price. If you're a longer-term investing trader, you'll give the share price a little bit more room to move and set your stop loss lower.

Once you've identified what time frame you're looking at trading, you need to be able to remove the normal market noise (volatility) in that particular time frame. You don't want to have to close out of an investing position just because a share price moved a little bit due to its normal trading volatility.

In fact, there are some serious drawbacks to setting tight stops.

First, you'll decrease the reliability of your system because you get stopped out more often.

Second, and probably a little bit more importantly, you dramatically increase your transaction costs, because you're trading transaction costs make up a major proportion of your business expenses.

To give yourself a fighting chance, you want to trade a system that doesn't chew through excessive brokerage fees. This is one of the major reasons I steer my clients into developing a trading system that runs over a slightly longer time frame. With the correct system in place, and your investing risk minimized, you are well positioned to maximize your trading profits.

Forex Trading: The Fear Factor

Market knowledge and ability to understand analysis will only get you so far in forex trading, but without the nerve to actively compete risking your own money in the process you can never become a successful trader.

Wagering huge volumes of money in a market as susceptible to change is liable to cause a whole range of opposing emotions; fear, excitement and anxiety just to name a few. Battling against your emotions in order to complete a successful deal is one of the major hurdles, which must be overcome if you are to become a trader able to close huge deals and earn vast sums of money. If you can overcome or even use these emotions to make trades on the Forex then a successful career may be beckoning, but failure to do so will almost certainly cost you a substantial amount of money and end any lingering desires to progress in the busy world of exchange rate trading.

Initiating and closing a trade at the right times are the backbone of becoming a successful Forex trader. If a person cannot execute these deals at the right times, the psychological and financial damage can be crippling. Missing a huge trend or sitting too long on a good price, can be a demoralising experience, but one that many will encounter during a career in Forex trading.

Entering at the right time is just one thing that must be done correctly, but if you are unable to leave at the right time or hold your nerve during the course of the trade, the implications are potentially severe. For example accepting a small loss just before the market rises can lead to a horrendous huge profit/loss ratio margin. Similarly sitting on a currency price that is plummeting for too long could be financially crippling. Understanding the Forex market and having faith in your ability to judge a trend will pay dividends if you hold your nerve, backing out at the wrong time can prove to be a catastrophic misnomer.

The fear generated by investing your own personal money is the main thing that must be overcome. It is the culprit in so many failure stories, people who just couldn't overcome their anxiety investing unwisely, pulling out at the wrong time, missing a rise completely, all result in failure and are caused by fear. Accepting this fear, and using it to your potential will make you a stronger trader, able to trade freely and enjoy the thrill of the exchange. Fighting it will get you nowhere, understanding and overcoming it are the best remedies to this baseless emotion.

Trading strategies will help you ride out the rough times and capitalize on the good ones. Sometimes just taking a step back and accepting a few losses will give you the energy and the knowledge to attack the Forex with renewed vigour, and make some serious profits. Accepting that sometimes you will lose out, you need to be able to take the hits and roll with a punch, there are no guarantees in the trading market, so being able to move on and start again is a skill that is paramount to generating success.

Analysis and charts can only get you so far. You must first master these things, and be able to correctly interpret the figures that are represented in order to spot the trends and make your move. But this all means nothing if you don't have the courage of your convictions. If you are too afraid to buy and not sure when to sell then a glittering career in market trading is likely to elude you. 'The trend is your friend' but it means nothing if you firstly can't spot it and secondly don't have the courage to back it. Knowledge, strategies and overcoming fear may well be the 3 best ways to become to unlock the door to becoming a successful trader. Without all 3 you will more often than not become unstuck, so prepare, practice and evaluate everything before taking the plunge in the complicated world of Forex trading.

Managing Losses In Your Forex Trading

One of the cardinal rules of Forex trading is to keep your losses small. With small Forex trading losses, you can outlast those times the market moves against you, and be well positioned for when the trend turns around. The proven method to keeping your losses small is to set your maximum loss before you even open a Forex trading position. The maximum loss is the greatest amount of capital that you are comfortable losing on any one trade. With your maximum loss set as a small percentage of your Forex trading float, a string of losses won`t stop you from trading. Unlike the 95% of Forex traders out there who lose money because they haven`t applied good money management rules to their Forex trading system, you will be far down the road to success with this money management rule.

What happens if you don`t set a maximum loss? Let`s look at an example. If I had a Forex trading float of $1000, and I began trading with $100 a trade, it would be reasonable to experience three losses in a row. This would reduce my Forex trading capital to $700. What do you think those 95% of traders say at this time? They would reason, "Well, I`ve already had three losses in a row. So I`m really due for a win now."

They would decide they`re going to bet $300 on the next trade because they think they have a higher chance of winning.

If that trader did bet $300 dollars on the next trade because they thought they were going to win, their capital could be reduced to $400 dollars. Their chances of making money now are very slim. They would need to make 150% on their next trade just to break even. If they had set their maximum loss, and stuck to that decision, they would not be in this position.

Here`s a perfect illustration why most people lose money in the Forex trading market. Let`s start out with another $1,000 float, and begin our Forex trading with $250. After only three losses in a row, we`ve lost $750, and our capital has been reduced to $250. Effectively, we must make 300% return on the next trade and that will allow us to break even.

In both of these cases, the reason for failure was because the trader risked too much, and didn`t apply good money management. Remember, the goal here is to keep our losses as small as possible while also making sure that we open a large enough position to capitalize on profits. With your money management rules in place, in your Forex trading system, you will always be able to do this.

Money Management Tips

Money management in the foreign exchange currency market requires educating yourself in a variety of financial areas. First, a definition of the foreign exchange currency or forex market is called for. The forex market is simply the exchange of the currency of one country for the currency of another. The relative values of various currencies in the world change on a regular basis. Factors such as the stability of the economy of a country, the gross national product, the gross domestic product, inflation, interest rates, and such obvious factors as domestic security and foreign relations come into play. For instance, if a country has an unstable government, is expecting a military takeover, or is about to become involved in a war, then the country's currency may go down in relative value compared to the currency of other countries.

The Forex, or foreign currency exchange, is all about money. Money from all over the world is bought, sold and traded. On the Forex, anyone can buy and sell currency and with possibly come out ahead in the end. When dealing with the foreign currency exchange, it is possible to buy the currency of one country, sell it and make a profit. For example, a broker might buy a Japanese yen when the yen to dollar ratio increases, then sell the yens and buy back American dollars for a profit.

There are five major forex exchange markets in the world, New York, London, Frankfurt, Paris, Tokyo and Zurich. Forex trading occurs around the clock in various markets, Asian, European, and American. With different time zones, when Asian trading stops, European trading opens, and conversely when European trading stops, American trading opens, and when American trading stops, then it is time for Asian trading to begin again.

Most of the trading in the world occurs in the forex markets; smaller markets for trade in individual countries. Simply put forex trading is the simultaneous buying of one currency and selling of another. Over $1.4 trillion dollars, US of forex trading occurs daily and sometimes fortunes are made or lost in this market. The billionaire George Soros has made most of his money in forex trading. Successfully managing your money in forex trading requires an understanding of the bid/ask spread.

Simply put the bid ask spread is the difference between the price at which something is offered for sale and the price that it is actually purchased for. For instance, if the ask price is 100 dollars, and the bid is 102 dollars then the difference is two dollars, the spread. Many forex traders trade on margin. Trading on margin is buying and selling assets that are worth more than the money in your account. Since currency exchange rates on any given day are usually less than two percent, forex trading is done with a small margin. To use an example, with a one percent margin a trader can trade up to $250,000 even if he only has $5,000 in his account. This means the trade has leverage of 50 to one. This amount of leverage allows a trader to make good profits very quickly. Of course, with the chance of high profits also comes high risk.

Like many other speculative investments, a key part of money management for the forex trader is only using money that can be put at risk. It is wise to set aside a portion of your net worth and make that the only money you use in forex trading. While the chances of good profits are there, if you should have a problem and get wiped out, you'll only have a limited amount of money placed at risk. Also remember that the market is n constant motion. There are always trading opportunities. If a currency is becoming stronger or weaker in relation to other currencies there is always a chance for profit. For instance, if you believe that the Euro is gong to become weak compared to the US dollar then selling Euros is a good bet. If you believe that the dollar is going to become weaker than the yen, or the pound sterling, then selling dollars is wise. Staying current on the news and current events in the countries whose currency you hold is a smart move. Many people reach points where they can predict currency changes based on political or economic news in a given country. Remember though that forex trading is speculation, so be careful when managing your funds and only invest what you can afford to risk.

Please always make sure you check with the pros when dealing in this market unless you are doing this as a hobby and don't have a lot at stake in it. There are a lot of big boys playing here and they won't lose much sleep if you and thousands others lose their shirts...

6 Advantages of Forex on Other Investments

1. Lower Margin

Just like futures and stock speculation, a forex trader has the ability to control a large amount of the currency basically by putting up a small amount of margin. However, the margin requirements that are needed for trading futures are usually around 5% of the full value of the holding, or 50% of the total value of the stocks, the margin requirements for forex is about 1%. For example, margin required to trade foreign exchange is $1000 for every $100,000. What this means is that trading forex, a currency trader's money can play with 5-times as much value of product as a futures trader's, or 50 times more than a stock trader's. When you are trading on margin, this can be a very profitable way to create an investment strategy, but it's important that you take the time to understand the risks that are involved as well. You should make sure that you fully understand how your margin account is going to work. You will want to be sure that you read the margin agreement between you and your clearing firm. You will also want to talk to your account representative if you have any questions.

The positions that you have in your account could be partially or completely liquidated on the chance that the available margin in your account falls below a predetermined amount. You may not actually get a margin call before your positions are liquidated. Because of this, you should monitor your margin balance on a regular basis and utilize stop-loss orders on every open position to limit downside risk.

2. No Commission and No Exchange Fees

When you trade in futures, you have to pay exchange and brokerage fees. Trading forex has the advantage of being commission free. This is far better for you. Currency trading is a worldwide inter-bank market that lets buyers to be matched with sellers in an instant.

Even though you do not have to pay a commission charge to a broker to match the buyer up with the seller, the spread is usually larger than it is when you are trading futures. For example, if you were trading a Japanese Yen/US Dollar pair, forex trade would have about a 3 point spread (worth $30). Trading a JY futures trade would most likely have a spread of 1 point (worth $10) but you would also be charged the broker's commission on top of that. This price could be as low as $10 in-and-out for self-directed online trading, or as high as $50 for full-service trading. It is however, all inclusive pricing though. You are going to have to compare both online forex and your specific futures commission charge to see which commission is the greater one.

3. Limited Risk and Guaranteed Stops

When you are trading futures, your risk can be unlimited. For example, if you thought that the prices for Live Cattle were going to continue their upward trend in December 2003, just before the discovery of Mad Cow Disease found in US cattle. The price for it after that fell dramatically, which moved the limit down several days in a row. You would not have been able to leave your position and this could have wiped out the entire equity in your account as a result. As the price just kept on falling, you would have been obligated to find even more money to make up the deficit in your account.

4. Rollover of Positions

When futures contracts expire, you have to plan ahead if you are going to rollover your trades. Forex positions expire every two days and you need to rollover each trade just so that you can stay in your position.

5. 24-Hour Marketplace

With futures, you are generally limited to trading only during the few hours that each market is open in any one day. If a major news story breaks out when the markets are closed, you will not have a way of getting out of it until the market reopens, which could be many hours away. Forex, on the other hand, is a 24/5 market. The day begins in New York, and follows the sun around the globe through Europe, Asia, Australia and back to the US again. You can trade any time you like Monday-Friday.

6. Free market place

Foreign exchange is perhaps the largest market in the world with an average daily volume of US$1.4 trillion. That is 46 times as large as all the futures markets put together! With the huge number of people trading forex around the globe, it is very hard for even governments to control the price of their own currency.

10 easy tips to help you become a successful Forex trader

10 easy tips to help you become a successful Forex trader

1. Get a reliable broker
This is a very important step to take before you begin trading with real money. First choice you must make is whether to go with an ECN broker who does not interfere with your trades or to go with a non-ECN broker who do have the ability to interfere with your trades. The main advantage of using an ECN is that they will not manipulate your trades. Not all non-ECN brokers do manipulate your trades but they do have the potential to cause slippage, execution problems and to change the spread to suite them. However non-ECN brokers require smaller initial deposits and offer higher leverage. If you are looking to purchase a Forex Robot it should clearly state whether it is broker dependant and advise you on suitable brokers.
2. Do not overtrade
Trading can be a stressful job if you let it be. Overtrading is a cause of this stress. Every day a trader should have a plan that includes entries, exits and the daily profit/loss target. The trader should stick to this plan and avoid the pain overtrading can cause. Using a Forex Robot eliminates this problem.
3. Do not always take the advice of other “traders”
There is lots of information related to trading Forex available online. It is important to be careful what information you decide to believe and follow as there is alto of contradicting advice. It is better to make your own judgements. This is especially the case with Forex Robots as many traders use them incorrectly and then give them unfair bad reviews. Some intentionally give them bad reviews to steer others away from being profitable with them.
4. Have a plan
95% of traders fail because they don’t have a plan. Know when to enter and exit a trade. Know when to quit trading for the day.
5. Trade with what you can afford to lose
Do not trade with money that is needed for rent, for your family, for debts, etc. Trade with what you can afford to lose, but don’t expect to lose it as a negative attitude is not good for a trader.
6. Be Patient
Yes you can become very wealthy by trading the Forex. Not always overnight though. Trading manually can take a long time to master and to see profits but if you stick to it then you could well be very rich. Forex Robots speed up the process as you do not have to spend years learning.
7. Consider setting up a Virtual Private Server (VPS)
This tip is for those who use or want to use a Forex Robot. These are great money makers if chosen correctly. It is a good idea to get the robot setup on a VPS so you don’t have to have your computer switched on when the automated forex software is running.
8. Take a break
Just like any job it is important to take a break and give your mind a rest.
9. Avoid lagging indicators
Many traders spend years and years of their lives wasting time on pointless indicators that look great in the past but are lagging when used in the present.
10. Trade live
Even if it is with a small account and small trade size you need to trade on a live account. If you want to run a Forex Robot then run it on a live account with a small amount of risk. Do not waste hours upon hours of your life trading the charts in the past!

The Sneaky Way To Managing Losses In Your Forex Trading

The Sneaky Way To Managing Losses In Your Forex Trading

The basic rule of theForex trading is maintaining the losses to the minimal as possible. With the small Forex trading failures you can survive those situations where you have faced losses in the market and be well-equipped for the time to come.

To project a major loss prior to enter the Forex trading is the most preferred method to keep the minimal losses. Setting up your major loss as a small percentage for the Forex trading even if you are going through a series of losses if won’t stop you from trading. The major amount of money is lost because most of the Forex traders don’t apply appropriate money organization guidelines in Forex trading. If there is a suitable money management system then the success rate will be more.

Even if you are facing a series of losses will not be of much matter if you have set up a major loss of the Forex trading. The major amount of money is lost because most of the Forex traders don’t apply appropriate money administration and follow the guidelines of Forex trading method and with this method you can achieve success.

It is illustrated with an example that how the situation would turn out if you have not fixed a major amount of loss. Let us say that your float of the Forex trading is 00 and you start you initial trade with 0 and if you come across a series of losses then it should not be of much surprise. And this would result in the reduction of 0 in the Forex trading. Those dealers would say that I have already lost three times consecutively it is my turn to face a win.

Thinking of probably they will win they make up their mind to make a bet of 0 for their next trade. Thinking that they will win the dealer makes a choice to invest 0 for the next trade but contrary to this their money will experience a decrease of 0, and as a result of this loss their winning opportunities decreases. If they had prior set up a major loss and followed that method they would not have landed in this situation and now in this situation they have to earn an extra amount to make up their loss.

Let us try to justify why people lose their capital in the Forex trading market? A dealer begins has 00 float and starts off his trade with 0. And after three consecutive losses he losses 0 and his money slashes out to 0. Now only three hundred percent is required for the next trade and will assist in making the situation equal.

In both the cases that we have discussed above one thing remained common that the dealer have not used a suitable organization of the capital and put a large amount of money in jeopardy. The main aim is to keep the losses at the lowest and assuring to begin at a decent position so that you can make the most of the turnover. With the help of the capital management method in theForex trading you can always make use of it.

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This EA is using ...

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Based on my last post, I've read scores of reviews from traders using Dealing Desk brokers as these are the most common ones that support MT4 platfroms, and they all say exactly the same thing, no matter which broker they are referring to. All of these brokers scam the traders using all kinds of clever tactics designed to make you lose your money. Keep in mind that you are trading AGAINST them, and when you win they have to pay you, and visa versa. Cappiche? ECN brokers are the only remedy.

yNeville is quite ...

yNeville is quite correct. The exact reason why this EA, or any EA for that fact works A LOT different in live trading compared to back testing, is due to shady Dealing Desk brokers who only make their money by scamming traders via manipulating the spread, and other deliberate activities, such as causing slippage, red flagging your account, not paying you, etc. The only way around these problem is to use an ECN type broker, but with them you'll pay a set rate on all trades. i.e. $6+.

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3 types of Forex (Foreign exchange) Risk and Exposure

Managing foreign exchange (or forex) risk is essential to successful investment in the forex market.
Foreign exchange exposure or risk can be classified into three types: transaction, economic and translation exposure.
Transaction exposure refers to the extent to which the future cash transactions of the firm may be affected by any changes in the currency exchange rate.
Economic exposure measures the impact of changes in exchange rate on the firm&'s cash flows and earnings.
Translation exposure refers to accounting exposure. It measures the impact of changes in exchange rate on the financial statements of the group of company.
Most companies attempt to minimize the risk of fluctuating exchange rates by using hedging instruments such as Forward Exchange Contracts, Money Market Hedge, Futures, Options and Swaps.

 Five-Minute Periods Forex Trading:

What Is Five-minute Periods Forex Trading?

What exactly is five-minute periods Forex trading? It is a type of Forex trading that involves making trades based on the information in five-minute Forex charts. The object is to piggyback onto the short-term momentum when a currency starts to rise in value. This is done by purchasing the currency when it begins to gain upward momentum and selling it as soon as the momentum slows down.
Investors who take advantage of five-minute periods Forex trading are looking to make a quick profit and get back out of the currency as soon as they have realized the gain they are looking for. Usually, Forex traders who use five-minute charts to determine which currencies to buy will set up a sell order at the same time they buy the currency. When the currency reaches the sell point, the sale order will be executed automatically.

Not for Beginning Forex Investors

Five-minute periods Forex trading is not recommended for beginning investors. This type of trade is riskier than long-term Forex trades. Part of the reason for this is that the commissions in Forex trading are not just a set percentage that is easy to figure and anticipate. The commissions in Forex trading are based on the spread between the bid price and the ask price. Since the commission is not a fixed percentage of the trade, you need to make sure you understand how the commission is figured before making a trade, especially in a short-term transaction. Otherwise, you may find that your profit from the trade is not enough to cover the commission.
Besides an understanding of how commissions are figured, an investor who is thinking about getting involved in five-minute periods Forex trading should learn how to use market indicators to determine which currencies to buy and when to sell them. The indicators that are most commonly used in five-minute Forex trading are the EMA (exponential moving average) and the MACD (moving average convergence divergence). Understanding how to use these two market indicators can help you make better investment decisions when you are doing short-term Forex trades.

Increase Your Returns and Hedge Your Losses:

Forex option trading is a financial instrument, which serves for both hedging and speculating. In the past, only the large financial institutions would use Forex option trading for hedging. However, this trading option is also available for individual Forex traders. There are advantages and disadvantages to Forex trading, just like any other trading strategy. This is a very liquid financial tool and can be very risky. Forex option buyers are called holders, and option sellers are called granters.

How Does It Work?

A Forex option buyer has a right to exchange a specific amount of currency at an agreed rate at a specific date. The buyer is contracted to pay the seller a premium, before the buyer even purchases the option. This is the only obligation of the buyer. This limits the liability of the buyer. The seller, on the other hand, has two possibilities with Forex option trading - either to buy back the foreign currency contract prior to its expiration date or to hold it until it expires.

So what exactly happens when you buy a Forex option? Essentially, you are opting for a fixed price of the transaction. Forex options have a fixed currency amount with a fixed expiration date, rather than being tied to the markets' fluctuations.

This may seem surprising to new traders, but forex options are not usually exercised. Most of the time the options are not exercised by the option holder; the options are often offset until they expire. If the option does get exercised, a spot position is assigned to the option holder. There is also a small possibility that an option will expire worthless, if the strike price is lower than the purchase price at the expiration date.

As previously mentioned, there is a fixed price assigned to Forex options. The beauty of this caveat is that it offers protection for an option holders capital. If the market takes a turn for the worse, you will not lose all of your capital. But we're not trading the Forex market to limit losses though. Let's focus on how you will profit. When the strike price is higher than your initial purchase price you pocket the difference. However if the strike price is lower than the initial purchase you will incur a loss.

Forex option trading is exclusively availabe in the international markets, because it's a hedging instrument. This strategy is generally risky, but it also generates higher returns when you know what you're doing.

Types of Forex Options

There are two types of options in Forex option trading- call options and put options. Call options give a trader the right to buy currency, and put options give the trader the right tosell currency. Both of these options generally change in response to volatility fluctuations, i.e. if the volatility falls, the prices of both options also fall. There are common and customized Forex options, respectively called "plain vanilla" and exotic.

Trading Guidelines To Get You Started

In order to protect yourself from potential losses, it is better to follow general safety guidelines:

1. Place a small portion of your working capital into your option trading strategy.

2. Limit your trading. Monitor the market and wait for proven signals to enter the market, execute your strategy, and generate your profits.

3. Test out your option trading strategies in your demo account first. As you get a hang of everything and become confident in your option trading strategy, it's time to enter the market.

Forex option trading is an additional Forex trading strategy. In order to become better diversified, you may wish to learn more about Forex option trading in addition to regular Forex trading.

 

 

The Way Out For Every Forex Trade Beginner

one of the most popular and most profitable ways to make money from the internet is by joining the Forex trading. With the advent of the technologies and internet access; the online forex trading system has gained its popularity in the global market. This is probably because it deals with the most liquid asset in the world or because it doesn’t involve much time, money or energy.
Forex trading basically involves the exchange of many foreign currencies. Daily; about 2.5 trillion USD gets exchanged in the market and many people use this medium to feed their families. In the past, only the banks and the financial institutions offered the foreign exchange but now; anyone who has a brain can trade in Forex. Unfortunately; not all traders are making money through Forex; there are those who are constantly run at a loss. They do not take the time to learn how the market moves, so they end up buying currencies that they can not sell or the ones that they would sell at a loss. Due to the high rate of frustration that has risen from the vain efforts of some people; many online platforms have been set up to enable safe and secured money transactions and exchange where anyone can invest and try out the profit mechanism. The forex robot system requires a basic and a fair knowledge in the foreign exchange market so that one can put up individual strategies to make the most of the profit.
Online forex trading system also relates to the mechanical forex trading software programs which are really effective for a novice to place his or her dealings without any prior understanding to the trade market scenario. Profit making gets easier as the software directly calculates and predicts the forthcoming best possible gaining situations.
Some of the strategic forex traders deal on behalf of an individual using the software. The strategies are unique and so designed that the profit maximizing situation is tried out. If you are not an experienced trader who still wants to make money fast with Forex; you should better get on a platform and get a forex robot.  You will be glad you did.

The Major Forex Secret You Need In Order To Hit It BIG

Have you dreamed about making it big via the foreign exchange market? You will be intimated with simple and straight information that will help you with your forex trade.  A lot of traders fail to make use of this tips do not be discouraged because so many traders are not making profit.
Do you know that every big bullish Forex trend starts and continues by breaking to new market highs on a chart? Well, that is what happens. The more mature a trend gets, the more it breaks out to new market highs. Anyone who wants to make money BIG in forex should by getting in on the big trends should start by buying breakouts. Most Forex traders do not make much money because they do not buy breakouts. Most of them believe that predicting when a low would occur is the best way to make money in Forex trade. They try to buy into support and predict the start and turn of any trend. What most of them do not know is that the Forex market cannot be predicted! When they make wrong predictions and assumptions; it is only logical for them to lose money.
Making BIG money in Forex would only be possible if you are trend-based. Imagine if you caught just 50% of every major trend; wow, you would never be broke again. You don’t win in Forex by making predictions; you trade a high odds set up and focuses on the profit potential ahead. Breakout trading works, so go for levels that other traders consider as essential and have been tried a few times before the break. Also use one or two momentum indicators to time your entry and you have a robust Forex trading strategy which will always make money.

My 5 Golden Forex Trading Rules:

My 5 Golden Forex Trading Rules:

As a trader in the forex market, I have come to understand the truth about trading and it mostly has to do with myself and my personality. Taking the time to learn the FX market and developing an awareness of yourself as a trader will aid you tremendously on your very own forex journey. To aid you along the way, I have developed my 5 golden forex trading rules.


1. Having an understanding the currency pairs, including which pairs has the most liquidity and volatility in order to decide when and when not to trade them. I want to know the pairs as well as my brother and that is why I trade just a few pairs.

2. Employing technical analysis to determine past price action to set future targets. I was raised a technician and will let technical analysis be my primary mechanism for trade management.

3. Understanding the market’s psychology and my own, and then incorporating this information as part of my forex trading strategy. Understanding the drivers of the market and my own nuances allows me to sleep in when I am too tired to trade the London session and plan my trading activity, including my daily forex education session, at the times of the day when my mental focus is at its sharpest.

4. Awareness of the fundamentals that will cause a currency pair price action. Knowing current events and anticipated news allows me to trade when the market conditions fit my trading style. This is one of the things I absolutely love about the forex market … you never have to wait long for an opportunity!

5. Risk management and trade execution to ensure my trades can achieve the maximum profit. I don’t want to be greedy and I don’t like to leave money on the table either. I will be trying to master this skill for the rest of my life!

Getting your forex education, practicing in a demo account, becoming aware of your own psychology and being persistent will allow you to succeed in the forex market as well.

Dollar Stuck Near Multi-Month Lows Monday Morning:8/9/2010

(RTTNews) -  The dollar remained under pressure versus other major currencies Monday morning, as a dismal recent stretch has cost the greenback nearly all of its springtime gains against the euro and sterling.

Meanwhile, the dollar hangs on the precipice of falling to a fresh 1995 low against the yen.

Stock futures are pointing slightly higher on Wall Street this morning, following Friday's lackluster session.

Concerns about the US jobs market were validated last week with yet another troubling employment report from the Labor Department.

On Friday, government data showed a larger-than-expected drop in July payrolls.

Looking at today's currency charts, the dollar was on pause versus the euro, holding with a penny of Friday's 3-month low of 1.3333.

The dollar was stuck at 1.5950 versus the sterling, having come within a whisker of 1.6000 for the first time since February.

Against the yen, the buck steadied near Y85.50 after testing its 15-year low of 84.80 late last week.

The Federal Reserve will gather in Washington this week to announce the latest interest rate decision.

Policymakers are expected to keep rates near zero for "an extended period," and signal concerns about the pace of the economic recovery.

Outlook for Euro Improves But Still Remains Pessimistic:August 9th, 2010  

The euro endured hard times this year as the financial crisis in the European Union made us question the very existence of the currency. Therefore, the rally it showed this summer was rather unexpected. The experts expected the rally to end soon, perhaps even this month. Does the outlook changed? Not much, though it became somewhat more bullish.

The bears point out that the countries such as Greece, Spain and Portugal can drag the EU economy to the bottom, causing the European shared currency to collapse. The good example of such viewpoint is the words of editor of the Gartman Letter:

The euro has had a spectacular bounce. Were all of the problems that were attendant and discussed and so obvious in February, March and April of this year, have they been alleviated? Not even slightly. The major trend for the euro is still toward disintegration.

The bulls say that the European economy more stable than perceived. Jean-Claude Trichet, the President of the European Central Bank, tries very hard to support such point of view, stating that “the available data for the third quarter are better than expected” and ”the market is functioning a little bit better”. The growth of the services and manufacturing industries in Europe and the strong Germany’s economy can be considered evidences of the improving economic situation in the EU. The IMF is planning to provide the next part (€9 billion) of the promised €750 billion bailout as Greece is performing measures to reduce the budget according to the agreement.
Despite all the good signs, and even as the US is becoming next major reason for the concerns, the sentiment among the economists still remains pessimistic for the euro. The rally may end any time and the speculations persist about the possible parity with the US dollar or even the disintegration of the 16-nation currency. The forecast were revised upward but the euro still expected to decline versus the greenback to 1.22 by the end of this year.
If you want to comment on the euro’s recent action or have any questions regarding this currency, please, feel free to reply below.

NZ Dollar Drops as Central Bank:August 9th, 2010

The New Zealand dollar fell today after the report showed that the house prices increased with slower pace, causing the speculation that the central bank wouldn’t raise the interest rates next month. The house prices in New Zealand grew 4.1 percent in July from a year earlier, following the growth by 5.2 percent in the previous month. The Reserve Bank of New Zealand announced, after it raised the key rate to 3 percent last month, that the slower economic growth prompts to slow the pace of the rates’ increases.
NZD/USD dropped from 0.7336 to 0.7313 today as of 9:58 GMT.
If you want to comment on the New Zealand dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

1 South Korean won = 0.000862 U.S. dollars:August 9th, 2010

The South Korean won extended its rally for yet another day as the anticipation that the central bank would raise the interest rates increased the appeal of the currency. The central bank increased the borrowing costs by the quarter percentage point on July 9 from the record low level of 2 percent. The forecasts promise the consumer prices in South Korea to rise by 2.8 percent in 2010, up from the previous estimates of 2.6 increase. The analysts say that the inflation pressure alone should push the won up even without the rates hike.
USD/KRW fell from 1,161.20 to 1,160.00 as of 9:18 GMT today.
If you want to comment on the South Korean won’s recent action or have any questions regarding this currency, please, feel free to reply below.