Forex Trading Success - Understand These 2 Equations or Lose

Forex Trading Success - Understand These 2 Equations or Lose

Enclosed I am going to give you 2 simple equations and if you want to win at forex trading you need to understand their significance or lose, so here they are.
1. How Markets Really Move
Supply and demand fundamentals + Investor perception of the facts = Price
Well that's nice and simple!
Yes it is but most traders don't understand the significance of the equation and try and trade the fundamentals (news stories) and think it gives them an edge - it doesn't. Its how investors perceive them that's important, they are highly unpredictable and dominated by greed and fear.
Other traders think that forex technical analysis is scientific, as of course human nature is constant, they therefore think they need to predict prices but this is impossible as well and they lose.
If you understand the above you will realize that trading is game of odds -not certainties and it is investor sentiment that drives prices and the best way to win at forex is to use forex charts but not predict just follow the reality of price change.
The next equation for forex trading success is:
Understanding + Confidence = Discipline = Forex trading success
Again a simple equation but its one again that most traders fail to understand.
Trading is more about mindset than method as even if you have a good forex trading system you still have to apply it or you have no system!
The fact is you won't follow forex signals or systems unless, you understand the logic and have confidence in it. When you hit a string of losses (and you will) you will only trade with discipline if you have confidence.
Consider how many traders simply buy a forex signal service or system from a vendor and believe the marketing hype - that it will help them win or make them rich.
What happens? They all lose as they lack confidence or discipline.
Consider this fact:
Anyone can learn currency trading and anyone can win - but 95% of traders lose.
The reason is they fail to understand the significance of the two equations above.
They don't understand how and why FX markets really move or the link between method and mindset to apply it.
If you understand the above, you could be on the way to making huge regular profits.
You will realize that the way to win is based on understanding what you are doing and having confidence in it - it is simple, yet most traders just don't get it - trading success comes from within.
Forex trading offers huge rewards and if you keep the above in mind and work smart you could enjoy forex trading success.

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Article Source: http://EzineArticles.com/934114

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Importance of Demo Trading During Your Forex Training

Once you decide to become a Forex trader the number one notion in your mind should be to devise Forex trading strategies that work and suit your personality. In fact, it is more common to devise only one strategy and stick to it until it becomes second nature. Whether you wish to simply stick to that one strategy or devise others, it is completely up to you, but before you release it into the live markets it needs to be developed and confirmed. This is where demo trading comes in.
Broker demo accounts
Every good broker allows access to a demo account. Whilst it is a sales technique for them, it is an opportunity for you do start developing the very thing that will generate success in the markets. Some demo accounts may have an expiration date while some have a life-long shelf life so make sure that you check this before signing up. Demo accounts vary from the brokers own software to more popular software such as MT4 or MT5. Whatever the software is, it is the same as the live platform you will eventually use.
Practice
Once your Forex training begins and you have a few Forex trading strategies in mind, it is time to start. Make sure that you firstly familiarise yourself with the software itself first making sure that you know about every attribute you will use such as drawing of trend lines or installing indicators. Once this is done, start trading your strategy with the notion that it is not bullet proof. Every time you make a trade, take notes of why you think it did so. Every time a trade fails, take note and devise alterations that will make it more successful next time. The key here is patience and your ability to read your own work in a critical manner in order to devise the perfect formula for the live market.
Confidence
When you trade in live markets one of the most important characteristics you should have is confidence in your own Forex strategies - there are a few others but during your initial Forex training this is the one to master first. If you do not believe in your work, nobody else will. Once you have enough wins under your belt and a solid trading record this 'confidence' will come naturally. These are the first signs that say you are ready to trade live markets.
Summary
To summarise, if you wish to minimise your risk it is crucial that you begin with a demo account. Some people find this hard because they want to start making money straight away but little to their knowledge they have become gamblers. If you don't want to gamble your money or rely on luck it is imperative you practice first until you are ready (no matter how long it takes) and benefit later.

For more information on Forex training or instructional videos that guide you through successful Forex trading strategies, visit our website.

Article Source: http://EzineArticles.com/?expert=Dragan_Lukic

Article Source: http://EzineArticles.com/7775403

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Forex Margin Requirements

No matter what kind of account you set up with your Forex broker, there are going to be Forex margin requirements. Put very simply, this indicates the amount of money you need to keep in your account in order to trade.

The reason there are Forex margin requirements is to protect the broker from having to come up with money from his own pocket. Keep in mind that when a trade is made, the trader in reality only puts up a fraction of the money the contract is worth. When the money runs low and is below the Forex margin requirements, the trader is put on margin call. He has to put more money into his account.

Wiggle room

It's never good to trade scared. Trading scared can take on many forms, but the most prominent manifestation of the beast is to be close to your Forex margin requirements. When that happens, the Forex trader feels the pressure of having to make money not only for his livelihood, but also to avoid being put on margin call. This rarely works out well.

What often times happens is that the trader will try to make a big score, or trade over his head, and that never works out well. Because the trader has drifted from his game plan; from his trading strategy; he is no longer trading the market, but rather he's trading simply for Forex margin requirements.

The logical thing for any trader to do is make sure he has enough money in his account to be able to trade according to his strategy, and not have to worry about losing a bit of money. This kind of attitude will generally lead to Forex profits as opposed to continued losses.

Another philosophy to be adhered to on the other side of the spectrum: What happens when you have more than enough money in the account and you're nowhere near the Forex margin requirements? It's wise to withdraw money from your account when you have an over abundance. Not only should you be paying yourself a salary, but you also want to be protected against anything catastrophic that may happen to your broker. Better safe than sorry.

Change quantities

If you don't have the money to deposit in your account to give yourself enough breathing room, then the recommended tactic is to change the quantities you're trading. And that doesn't mean make them bigger. On the contrary, you should make them smaller.

You're not going to make it all back in one shot. Sure, it's possible but like everything else in trading Forex, you have to go with the odds. Lower your quantities. If necessary, switch to a mini trading account. And if necessary after that, switch to a micro trading account. It is always best to try to inch your way back to the top rather than try to make it all back in one fell swoop.

Your Forex margin requirements should never get in the way of your trading. It's up to you to make sure they don't influence your trades. The support and resistance lines on your charts are your buy and sell indicators; not the money in your account.

Source : http://www.dailyforex.com/forex-articles/2011/01/Forex-Margin-Requirements/7085

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Day Trading Strategies

Day Trading Strategies

Day trading has come a long way since its inception. It was introduced in 1975 as an acceptable mode of trading stocks when the United States Securities and Exchange Commission (SEC) ruled that fixed commission rates, which had been set till then at 1% of the trade, were illegal. This enabled brokers to offer their clients a much reduced commission rate. It also opened up a whole new concept wherein not only brokers could place trades but everyone had the capability to sit in front of a computer and buy and sell stocks all day. From here emerged a whole industry of day trading which subsequently branched out from stocks to other investment instruments, such as futures, options, Forex and commodities.

Day Trading Strategies

There are many day trading strategies. Some follow the same pattern as does broker driven trading while others are unique to day trading. The idea behind day trading is to gain profits by taking advantage of the small price movements in liquid stocks and indexes. One way of doing this is to leverage large amounts of capital which gives the trader additional funds to use for placing trades.
When considering day trading strategies, the first one to look at are the entry strategies. A day trader should first consider selecting stocks that seem ideal for day trading. The liquidity and volatility of the stock are the next things to consider. Liquidity offers the trader the opportunity to enter and exit a stock with a tight spread and at a good price. The volatility of the stock is the measurement of the daily price range within which the stock is expected to move. Greater volatility can lead to greater profit or loss.
There are several ways to identify entry points including technical analysis such as candlestick charts and trend lines. Staying current with financial news can provide important data for market movements. In addition, a day trader can be on the lookout for orders that are coming in from elsewhere and take note of the increasing or decreasing volume of the stock.

Stop Losses

Using stop losses is another important day trading strategy. Most day traders trade on margin this can be quite risky as steep price movements happen constantly. A stop-loss triggers the predetermined price where a trader will stop trading. This price should suit the risk tolerance of the trader. In addition, a day trader can make a mental stop-loss whereby he/she will exit a position if it takes an unexpected move. By predetermining a maximum loss for each trading day, the day trader will feel less tension and stress during the day secure in the knowledge that he will not find himself in a terrible situation at the end of the trading day. Experienced traders will use this day trading strategy; novice traders believe they must make up the loss and instead of ceasing to trade, they take unnecessary risks in order to break even.
Other day trading strategies have developed over time and have become very popular for day traders. Scalping, for example, involves selling immediately after a trade has become profitable, i.e. when the price has gone above or below the target price. When a price rapidly moves upward, a day trader can use Fading to short the stock. This may be risky but offers nice rewards. Daily pivots is a day trading strategy whereby the trader endeavors to buy at the low of the day and sell at the high of the day, taking advantage of the stock's daily volatility. Using momentum when day trading may involve the purchase of stocks based on ongoing news reports and riding out the trend until it begins to reverse. Other momentum traders will watch for a strong trend in either direction and an increased volume and then place a trade.
All of these day trading strategies have enabled traders to increase the volume of their day trading and have provided the ability for more and more day traders to create a full time business from the comfort of their home.

Source : http://www.dailyforex.com/forex-articles/2013/07/Day-Trading-Strategies/22455

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The Advantages of MetaTrader Signals Services for Traders

 

The Advantages of MetaTrader Signals Services for Traders

MetaTrader 4 and the recently introduced MetaTrader 5 are electronic trading signals used by online retail foreign Forex traders. The software consists of both a client and server component and is licensed to foreign exchange brokers who provide it to their account holders. The server component is run by the broker. The client software is used by the trader to see live streaming prices and charts, place online orders and manage his or her account. MetaTrader Signals is a social trading service and with millions of traders subscribing to the same platform, the opportunity for additional profits is obvious.

The “signals” in the new Meta Trader trading platform allow traders to connect to any signal issued by a provider anywhere in the world. A trader can select and then subscribe to any trading signals provider and can then duplicate these deals in his own trading account.

Advantages

What are the advantages of the Meta Trader service for traders?

First of all, signing ups for the Meta Trader service is straightforward and even a novice trader can get on board with only a few clicks. Once the Meta Trader terminal has been installed, a trader needs only to select a signal provider and he can initiate trading.

With the Meta Trader platform, a trader is not required to come to any formal arrangement with a provider. Only the pricing and trading terms of the signal provider require an upfront agreement. The Meta Trader signal provider market is the largest market around, listing thousands of successful traders from all over the world who deliver their signals in the market. In addition, there is no stipulation that a trader maintain an account with the same brokerage company as his or her signal provider. There is total freedom of choice when it comes to selecting a brokerage company.

There are no commissions to the provider. A trader pays only for what has been agreed upon when signing up for the service. There are also multiple payment options available to a trader.

Less Fraud

Chances of scams or fraudulent behavior by signal providers using the Meta Trader platform is almost none existent since providers are scrutinized exceedingly to ensure that only profit making providers enter the provider market. It is, of course, vital that the signal provider chosen is trustworthy so a certain amount of research should be done before selecting someone.

With Meta Trader, chances of loss are less than with other investments since a trader can select a signal provider with a track record that meets a specific trader’s expectations and whose trades can then be duplicated on his or her own trading terminal. Trades are synchronized in real time and are automatically placed.

Secure and Anonymous

Another important aspect of the MetaTrader platform is that it is secure and anonymous. A trader does not have to worry about trader privacy since traders’ information is not visible to the signal providers.

MetaTraders can copy the Stop Loss and Take Profit Levels of their signal provider. For novice traders, who do not know when to Stop Loss and when to book profits, this can be a real advantage. In addition, a trader has the option to designate the percentage of the amount he or she wishes to trade. This helps in stopping unexpected losses and maintains a buffer zone for his account. Another option terminal is the “Stop if Equity is less than A” feature which puts a break on all actions if the equity level in a trader’s account falls below a pre-specified level. All positions automatically close and pending orders are also removed. This limits one’s losses. 

Source : http://www.dailyforex.com/forex-articles/2013/08/The-Advantages-of-MetaTrader-Signals-Services-for-Traders/22843

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The Main Advantages of Forex

There are many benefits and advantages of trading Forex. Here are just a few general reasons why more and more people are choosing this market.

No middlemen

Spot currency trading eliminates the middlemen and allows you to trade directly with the market responsible for the pricing on a particular currency pair. At FinFX all trading orders are sent directly to the liquidity providers without any intermediaries to ensure minimum execution time.

No fixed lot size

In spot Forex, you determine your own lot, or position size. This allows traders at FinFX to participate with the minimum trade size of 0.01 lots (1 000) with deposits as small as 100 EUR / USD / CHF / GBP.

Lower Transaction Costs

The retail transaction cost (the bid/ask spread) is typically less than 0.1% under normal market conditions. At larger dealers, the spread could be as low as 0.07%.

24-Hour Trading

There is no waiting for the opening bell. From the Monday morning opening in Australia to the afternoon close in New York, the Forex market never sleeps. This is very convenient for those who want to trade on a part-time basis, because you can choose when you want to trade: morning, noon or at night.

No one can corner the market

The foreign exchange market is so huge and has so many participants that no single entity can control the market price for an extended period of time.

Leverage – Trading on Margin

In Forex trading, a small deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits while at the same time keeping the risk capital to a minimum.
For example, if you trade with 1:100 leverage it means that a 100 EUR margin deposit would enable a trader to buy or sell 10,000 EUR worth of currencies. Similarly, with 500 EUR, one could trade with 50,000 EUR and so on. However, leverage can also be a double-edged sword as without proper risk management, this high degree of leverage can lead to large losses as well as gains.

High Liquidity

Due to the massive size of Forex market, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will as there will usually be someone in the market willing to take the other side of your trade and thus you are never stuck in a trade. You can even set your online trading platform to automatically close your position once your desired profit level (a limit order) has been reached, and/or close a trade if a trade is going against you (a stop loss order).

Low Barriers to Entry

You would think that getting started as a currency trader would cost a ton of money. The fact is, when compared to trading stocks, options or futures, it doesn't. FinFX offers Micro trading account with a minimum account deposit of 100 EUR.
FinFX is not recommending that you should open an account with the bare minimum, but it does make Forex trading much more accessible to an individual who does not have a lot of start-up trading capital.

Free Demo Account, Forex Education Material and Analytics

FinFX also offers a demo account to allow you to practice trading and build your skills. You will also have access to loads of free Forex education material including video tutorials, daily market analysis and trading platform guides. If you are new to Forex, we recommend that you start by opening a demo account as it is a very valuable resource for those who are financially hampered and would like to sharpen their trading skills with virtual money before opening a live trading account and risking real money.

Comparing Forex to Stock Market

If we for example look at the New York Stock exchange, there are about 4 500 stocks listed. Another 3 500 are listed on the NASDAQ. Which one will you trade? Have you got the time to follow so many companies? In spot currency trading, there are dozens of currencies traded, but the majority of market players trade the four major pairs. Aren't four pairs much easier to keep an eye on than thousands of stocks?
That's just one of the many advantages of the Forex market over the stock markets. Here are a few more:

24-Hour Market

The Forex market is a continuous 24-hour market. FinFX is open from Sunday 22:00 GMT+0 until Friday 22:00 GMT+0, with customer service available 24/5. With the ability to trade during the US, Asian and European market hours, you can customize your own trading schedule.

Minimal or No Commissions

With some of our trading accounts there is no commission or additional transactions fees to trade currencies online or over the phone. Combined with the tight, consistent, and fully transparent spread, Forex trading costs are lower than those of any other market. In addition, with some trading accounts FinFX is compensated for our services through the bid/ask spread.

Instant Execution of Market Orders

Your trades are instantly executed under normal market conditions. Under these conditions, usually the price shown when you execute your market order is the price you get. You're able to execute directly off real-time streaming prices.
Keep in mind that FinFX like many other brokers only guarantee stop, limit, and entry orders under normal market conditions.

Short-Selling without an Uptick

Unlike the equity market, there is no restriction on short selling in the currency market. Trading opportunities exist in the currency market regardless of whether a trader is long or short, or whichever way the market is moving. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. So you always have equal access to trade in a rising or falling market.

No Middlemen

Centralized exchanges provide many advantages to the trader. However, one of the problems with any centralized exchange is the involvement of middlemen. Any party located in between the trader and the buyer or seller of the security or instrument traded will cost them money. The cost can be either in time or in fees.
Spot currency trading, on the other hand, is decentralized, which means quotes can vary from different currency dealers meaning that Forex traders get quicker access and cheaper costs.

Buy/Sell programs do not control the market.

How many times have you heard that "Fund A" was selling "X" or buying "Z"? The stock market is very susceptible to large fund buying and selling.
In spot trading, the massive size of the Forex market makes the likelihood of any one fund or bank controlling a particular currency very small. Banks, hedge funds, governments, retail currency conversion houses, and large net worth individuals are just some of the participants in the spot currency markets where the liquidity is unprecedented.

Analysts and brokerage firms are less likely to influence the market

Foreign exchange, as the prime market, generates billions in revenue for the world's banks and is a necessity of the global markets. This means that analysts in foreign exchange have very little effect on exchange rates; they just analyze the forex market.

Advantages	Forex	Stocks
24-Hour Trading	YES	No
Minimal or no Commission	YES	No
Instant Execution of Market Orders	YES	No
Short-selling without an Uptick	YES	No
No Middlemen	YES	No
No Market Manipulation	YES	No

Comparing Forex to Futures

The Forex market also has of a bunch of advantages over the futures market, similar to its advantages over stocks. Here are just few of the examples:

Liquidity

In the Forex market, $4 trillion is traded daily, making it the largest and most liquid market in the world, whereas the futures market trades only 30 billion USD per day.
The futures markets can't compete with its relatively limited liquidity. The Forex market is always liquid, meaning positions can be liquidated and stop orders executed with little or no slippage except in extremely volatile market conditions.

24-Hour Market

At 5:00 pm EST Sunday, trading begins as markets open in Sydney. At 7:00 pm EST the Tokyo market opens, followed by London at 3:00 am EST. And finally, New York opens at 8:00 am EST and closes at 4:00 p.m. EST. Before New York trading closes, the Sydney market is back open - it's a 24-hour seamless market!
As a trader, this allows you to react to favorable or unfavorable news by trading immediately. If important data comes in from the United Kingdom or Japan while the U.S. futures market is closed, the next day's opening could be a wild ride. (Overnight markets in futures currency contracts exist, but they are thinly traded, not very liquid, and are difficult for the average investor to access.)

Minimal or no commissions

With Electronic Communications Brokers becoming more popular and prevalent over the past couple of years, there is the chance that a broker may require you to pay commissions. But really, the commission fees are peanuts compared to what you pay in the futures market.

Price Certainty

When trading Forex, you get rapid execution and price certainty under normal market conditions. In contrast, the futures and equities markets do not offer price certainty or instant trade execution. Even with the advent of electronic trading and limited guarantees of execution speed, the prices for fills for futures and equities on market orders are far from certain. The prices quoted by brokers often represent the LAST trade, not necessarily the price for which the contract will be filled.

Guaranteed Limited Risk

Traders must have position limits for the purpose of risk management. This number is set relative to the money in a trader's account. Risk is minimized in the spot Forex market because the online capabilities of the trading platform will automatically generate a margin call if the required margin amount exceeds the available trading capital in your account.
Your account is protected by automatic Stop Out which closes the most negative trade when your margin level drops below 100%. This makes it very difficult for the account balance to go to negative.The risk grows slightly when keeping positions open over weekend when your margin level is already very low. After the weekend the markets may open on a different level and if this direction is even more on the negative for you, it is possible that the account balance goes to negative.
In the futures market, there is a chance that your position may be liquidated at a loss bigger than what you had in your account, and you will be liable for any resulting deficit in the account.

Advantages	Forex	Futures
24-Hour Trading	YES	No
Minimal or no Commission	YES	No
Up to 1:200 Leverage	YES	No
Price Certainty	YES	No
Guaranteed Limited Risk	YES	No

 

Source : https://www.finfx.fi/en/main-advantages-forex
ٍsource Video : http://www.youtube.com/watch?v=-zOrG5QCZXw

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The U.S. Session Trader's Daily Forex Question

The U.S. session, trader's daily 09:45 EDT question; "Oh dear, do we now want to take a U.S. based trade and run the risk of a price move stranding things with no momentum, as 80% of U.S. sessions do?"
The law of probability says that U.S. trade will not follow through with sustainable breaks on new positions, and with what came before the Wall Street open, we already have seen that the bullish S&P start could literally go anywhere. TheLFB equity tracking system shows that the main components that we use to gauge S&P momentum has only four out of thirty companies trading in the green.
If this move is to hold, and by default the Usd is to get weaker, a huge raft of volume needs to hit that lifts all stock indices, as well as oil and gold trade. Not to say that could not happen, but it is questionable as to whether it will hit and hold before the European markets go into their close at 10:30 EDT.
The fact that gold moved $10, or 1% in five minutes at the open, and the S&P managed to tag on 0.3%, leaves another question as to why oil has not moved too far, and further enforces the feeling that the Wednesday move could hold. The majors are so far from their previous session highs or lows, that actually breaking new ground and holding for a ride on the dollar is very unlikely; unless a volume tsunami hits.
There is nothing at all clear-cut about the picture we have on the major pairs, and the global market Usd drivers. All are overbought in the near-term, and the major pairs are all dealing with daily chart Simple Moving Average areas that really are creating massive support and resistance areas to work through.
Volume and speculative interest is very light, creating an environment that offers plenty of volatility, but also failed breaks, in the same measure. Global equity trade is flat, and commodity markets are also flat-lining after efforts to hold support this week. In all, not an easy environment to issue high probability signals.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com
TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.
The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.

Source : http://www.actionforex.com/articles-library/forex-articles/the-u.s.-session-trader%27s-daily-forex-question-2009081994271/

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