Trading On The Online Forex Market

The online Forex market, as its name suggests, has no centralized physical address like the NYSE or the London Stock Exchange. It is in reality a global electronic network of currency dealers, who produce an incredibly high volume of monetary transactions in each twenty-four hour period.

A single day of online Forex trading will see the equivalent of nearly two trillion US dollars exchanging hands as traders buy and sell currencies. How much is that? Well, If you consider that the combined daily transactions of the US Bond and stock markets total about four hundred billion dollars, it's impressive.

And with the arrival of home computers with Internet access, and the relaxation of certain monetary policies, the online Forex trading market is no longer the exclusive domain of movers and shakers who had the big bucks necessary to qualify as currency traders in prior years.

Currency trading is now available for all investors, and because of the generous leverage terms, or up to 100:1, many small investors are allowed to control significant sums of money without having a lot of their own capital in a trade. Someone who has only $1000, with that sort of leverage, can be trading currencies in $100,000 lots.

Understanding Online Forex Trading There are many different trading platforms through which small investors can practice their online Forex trading; and, because the currency markets are conducting business around the clock three hundred and sixty-five days a year, there is no time of day during which online Forex trading is unavailable. Online Forex trading is open to banks, hedge funds, international conglomerates, and individual investors alike.

Online Forex trading may sound more complicated that it actually is. Currency trading is the simple process of using the national currency of one country to by the national currency of another. Buying Yen with Euros, or Canadian dollars with US dollars are both examples of currency trading; if you've ever gone to a foreign country as a tourist, you've probably engaged in some currency exchanges yourself.

The important thing about online Forex transactions is their sheer volume. Nearly two trillion in US dollars is exchanged on the Forex each day all year long. Online Forex trading is the largest financial market in the world. And even though small investors are now participating, the overwhelming bulk of money changing hands comes from banks, hedge funds, international corporations, and financial institutions.

Reasons For The Appeal Of Online Forex Trading The reasons for the surge in Forex trading are fairly simple. The Forex market offers around the clock trading, exceedingly generous leverage terms and exceedingly relaxed margin requirements. The massive liquidity of the Forex market means most trades are constantly completed; and the volatility of the exchange rates offers a chance for quick profits. Those who educate themselves can adopt techniques proven to limit their risks, and finally, online Forex trading provides an opportunity to profit both in rising and dropping markets.

By : Wade Robins - http://www.e-forextradingsystem.com

Reality of Online Forex Trading

Foreign exchange trading is the trading of currencies. Most currencies can be traded. Huge amounts of currencies are traded 24 hours a day, 5 days a week. On average $1.9 trillion is traded a day. The most traded are United States Dollar, Japanese Yen, Euro, Canadian Dollar, British Pound Sterling, Australian Dollar and Swiss Franc.

Many brokers will let you open an account with a starting balance of just $250. Though that may seem small, remember you will be trading on margin. Your $250 investment may let you control $25,000. As with all investments there are risks so make sure you take the time to study the markets and your exposure before making your first trades. I highly recommend that you do some paper trades first to make sure you have understood how the markets work. No risk training, just write down the trades you would have done for real and chart the prices. Buy and sell and see if you have the right strategy before making real trades.

A fast internet connection will allow you to do forex trading online. Your broker will give you many online tools to allow you to study the markets: Real time quotes, news feeds…

Visit different broker’s websites and compare the services they offer. Some brokers give you the possibility to open demo accounts. Do so, to test their software and find the one you like best.

Before you start trading make sure that you have learnt the terminology: Market Order, Limit Order, Stop Order. You may find the definitions of these terms and more information at http://www.forex.value-guides.com/calc-forex.html Calculating Forex Profits And Losses.

All currencies have standard identifying code used worldwide, some examples are: EUR (European euros), GBP (United Kingdom pounds), AUD (Australian dollars). Of course you don’t have to know them all but it may be good to be able to recognize all the major currencies codes so that you will be able to make quick decisions.

To make sound evaluations, you need information. Follow carefully the world’s current events, economic and political news. You will be surprised to see how, what may seem to you as insignificant will cause the currencies markets to fluctuate wildly.

By : David Jones - http://www.forex.value-guides.com/

Online Trading System For Trading The Forex

In 1986, Caterpillar made a 100 million profit trading the forex and would have actually had an operating loss for the year on their normal business if it wasn't for that profit.

In 2002, Bank of America made a $530 million profit in forex trading as stated under "Global Investment Income" on their annual statement.

Daimler Chrysler sells cars, correct? In 2003, they made more money on foreign exchange than by selling cars and half of their second quarter operating profit was from currency trades.

Foreign currency exchange used to be the playground of only the very rich. The past decade it has been opened up so someone with as little as a few hundred dollars can trade the forex.

This has spawned an industry all of its own teaching people to trade the forex. Seminars, charting systems, currency trading systems, signal systems and software have all been created to instruct people how to trade the forex.

Interestingly enough, the range of what a person can pay for this instruction varies dramatically. A person may or may not actually learn how to trade the forex profitably after spending thousands.

For example, a one- or two-day forex seminar typically will cost thousands. Companies market software that costs thousands. Signal companies typically charge monthly fees of hundreds of dollars to send the numbers to a person and the numbers are just plugged in.

None of these costs can assure that someone will actually make money in the forex. In fact, over 90% of new forex traders lose their accounts.

With the appropriate resources, a person can earn 20% monthly on their money and as they build their account up, an exponential force can dramatically increase their account.

For example, a person begins with $1,000 and sees their account grow to $2,000. The trader can add risk to their account by adding a lot. So, instead of making $400, which would be 20% on that $2,000, the trader would make $800 by having added a lot. You can see the exponential power of the forex.

Unfortunately, this power is what gets new traders in trouble. Not every trade is a win. With a few wins under a trader's belt, the newbie believes he or she can add more lots to their trade, and then they end up with a huge loss.

It is advised that the beginning forex trader begin with some of the e-books or online resources that are less expensive at first to ensure their success trading this market.

By : Brian Sater - http://www.forexmoneyonline.com/

The Benefits Of Using Online Forex Trading

In the past, forex trading was difficult for many individuals as the foreign exchange trading was only permitted for large financial institutions such as banks, big stock brokering companies and such. There was no place for the small investor.

With the advent of computers and the Internet, a new medium has emerged which allows anyone to dabble in forex trading and that is online forex trading.

There are currently numerous sites that offer online forex trading as well as stock trading. These are usually operated by forex trading companies who have professional forex traders to assist you if you are new to forex trading.

Some online forex trading sites also provides a trading starter kit if you open an account with them. Some provide home study courses on forex trading, some even provide training simulators to simulate the actual forex trading procedures. This can be a great new for newbies to learn the trades.

Since forex trading goes on 24 hours a day, your account is managed by professional forex brokers which will help you watch the forex market. It gives you the assurance that your investment is being safeguard.

Another benefit is that it is easier to get access to the latest data and analysis from online forex trading sites. Typically, they will update the stocks and prices in real time. Plus, most sites have a forum or have a live online chat system where you can consult with forex brokers and other investors as well. It is a fast and easy way to contact your forex broker should you need help.

I love online forex trading as it allows me to have access to the latest data analysis right from the comfort of my home. I’m also able to do transactions any time of the day and have access to professional forex brokers anytime. So give it a try.

By : Ricky Lim - http://www.onlinetradingpedia.com/

How To Select An Online Forex Trading Broker System?

Today an online forex trading broker system is not just about providing superior solutions to Forex traders, but it is also there to accommodate the technology that is needed for the forex trading industry. Certainly in such a competitive trading world, the online forex trading broker system allows you to perform all trading functions related to Forex both quickly and in real time from anywhere in the world.

These systems are no longer limited to a person being able to order entry or carry out a trade execution. In fact you can now track all your online forex trading activity through a forex trading broker system.

When looking for a good online Forex trading broker system, it is vital that you take your time and do as much research as possible before making that all important final decision. Many systems now provide you demo accounts which you can use to see if you feel comfortable when actually using it. All you need to do simply follow the information and directions that they provide on their sites. However there are some points that need to be considered when using an online Forex trading broker system.

1. Low Spreads. By keeping your spreads as low as possible (the difference between the price you pay and the price you sell at) then the more money you are likely to save.

2. Look for a Quality Registered Institution. Any broker who has a online Forex trading broker system should be registered as a Futures Commission Merchant with the National Futures Association in the US or the Commodity Futures Trading Commission in the UK.

3. Tools. A good online Forex trading broker system should provide you with useful tools such as real time currency price charting, technical analysis tools, fundamental analysis commentaries and economic calendars. All of these you will need in order to successfully carry out Forex trading online.

Plus any online Forex trading broker system you use should provide you with follow up support in case of any doubts or questions that you may have with regard to the system. Preferably look for those systems which have forums, contact phone numbers, e-mail addresses or a support helpdesk.

When choosing an online forex trading broker system, you should also focus on both money management as well as risk management. Your personal financial and risk management skills also play an important role when trading forex.

By : Ricky Lim - http://www.learn-forextrading.net/

Why Online Forex Trading is Attractive

One major guide for successful forex currency trading is the identification of trend. That is what many forex trading software use in their analysis.

In FX trading there are always identifiable trends in the movement of forex exchange rate. These last longer and are more clearly defined than is the case in any other type of trading, be it stock trading or commodity trading.

A forex chart often displays a consistent trend which remains there for a considerable amount of time. If one can spot this trend early on, one can make big profits. That is how many successful forex traders have succeeded in forex market.

One can follow this trend till a new pattern or trend emerges.

Nobody can control foreign exchange trading for a long time. There may be short periods when the central bank of a country or any other major bank is able to influence the foreign exchange rate, but it cannot hold it for any longer time.

There is no insider information or market manipulation. Therefore, one can trade fearlessly. On the other hand one is always subject to foul play in stock and other types of trading.

In forex trading one needs to concentrate just on a few major currency pairs - and pure technical analysis. A Forex trader doesn't have to worry about 8,000 stocks or 72 commodities, and all the underlying trading rules that accompany those markets.

Forex Market is marked by simplicity. There are less issues relating to the execution and scrutiny in this marekt. Because of this simplicity, companies are able to devise most sophisticated technologies. The forex trading software so designed is small and simple.

One important attraction of online forex trading is the leverage factor. With this, one can hold fairly large positions with very small amounts. Thus with a leverage ratio of 100:1 and $1,000, one can have control over as much as $100, 000. If one happens to lose, one cannot lose more than $1,000.

A forex trader can cut the losses early on while leaving the profits to build. With this strategy, it is possible to be profitable in forex market.

Another beauty of forex trading is that one does not need a lot of learning. One can learn forex trading in relatively a short period of time and start trading.

One can start with mini forex trading. With this one can start with as little as $50 and in as little as 5 minutes.

There are no fees to be paid in currency trading. A forex broker makes up his fees from ask / bid spreads.

Forex currency trading can be done virtually 24 hours a day and 6 days a week. No other market provides this sort of facility. One can pick up one’s own hours and work accordingly. One is not subject to opening and closing bells.

All the above factors make it extremely easy and attractive for online forex trading.

By : Altaf Sahibzada - http://www.businesses-jobs-careers.com/Forex

The Big Business Of Forex Online Trading

The daily transactions on the Forex, or foreign exchange markets, are so vast that they dwarf the total amount of money invested in stock markets across the globe. With over two trillion dollars in daily volume, the Forex is the most significant of the global monetary marketplaces

Since the introduction of the Euro to the world currency mix, the Forex has seen exponential growth. Add the rise of the Internet, and what had been the exclusive domain of the world’s great banks, financial institutions and super wealthy with at least a million dollars to invest became available to small investors who had PCs, Internet connections, and a few thousands of dollars in risk capital.

There is a very wide mix of entities, from individual brokers to corporations to governments, engaged in currency dealing through Forex online trading. And the currency market, because it does not operate form a single physical exchange like the NYSE, is ideal for Forex online trading. There are, of course, cites around the globe with large numbers of Forex brokers, and the advent of Forex online trading has connected all of them electronically. Forex online trading is now conducted around the clock every day of the year.

Forex Pre-Internet
In pre-Internet days, Forex business was conducted over the telephone and the only way in which individual investors could participate was to go to their bank and have a banker place their currency trade, or phone the bank to request that it be placed. For most of its history, the currency market saw very little individual involvement.

But Forex online trading has changed all that. Hundreds of thousands, if not millions, of individual investors have taken advantage of their around-the-clock online access and, just like larger institutions, are now engaging in Forex online trading twenty-four hours a day. Geography no longer matters, because business hours are always ongoing somewhere in the world.

Forex Trading Today
Forex traders can now have a hands-on role in their investments by continually observing market trends so that they can close their Forex online trading positions when the market turns against them. Forex online trading has also benefited from improvements in encryption technology, making investors feel more secure about having money online.

Forex online trading, in short, has become big business. And every big business will eventually spawn cottage business; Forex online trading is not different. There are now hundreds of websites offering advice and software designed to improve an investor’s chance of success in the Forex online trading game.

But you should make sure, before you decide to give your money to any Forex online trading site, that its software is compatible with your PC’s operating system. And take the time to comparison shop for commission fees. You’d be surprised to know how widely they can vary among brokers. And above all else, find out how the broker intends to let withdraw your Forex online trading earnings.

By : Wade Robins - http://www.e-forextradingsystem.com/

Online FOREX Brokers - View from a Broker on Trading Personalities and Success

In my last article I reflected on the thousands of traders who I have traded and what were the major errors that caused well over 95% to lose.

Here we will look at trading personalities and how your underlying nature affects your potential to make profits.

Let’s look at some different types of traders that lose.

1. The Action Man

This is a huge group these traders want to trade all the time and love the excitement of trading and fall into two main groups:

Day traders

They are convinced the logic will work, but of course it does not.

All short term volatility is random, so they get stopped out a huge amount of times and when they do win profits are small.

The result?

A total wipe out of equity – After trading many thousands of clients I never ever saw a day trader win.

The other traders who trade too much are ones who tend to “revenge trade” they have lost money and try hard to get it back by trading more and wipe themselves out.

Another group tend to be news junkies.

They believe they can trade every scrap of news and make money and again the result is:

A total wipe out.

2. The universe is governed by law

These traders believe that they will never lose as they have found a system that can predict the future.

I traded a lot of the followers of Elliot and they all lost.

3. The educated fool

The above title have taken from Jake Bernstein (a great writer on investor psychology, check out some of his books if you can) these traders believe they are smart (many of them are) and that the more complicated their trading systems the more chance they have of winning.

They build hugely clever systems that are complicated, look great in theory and then they see their system lose.

What they don’t of course realise is there is no correlation between how complicated a system is and how much money it makes.

4. The chase your tail personality

This group can’t stick with one system. As soon as it has some losses they switch to another one.

That loses then their onto the next one and so on.

Many of this group have perfectly good systems but get impatient with losses and think another system is the answer.

5. Lets get rich quick

These trader buy e-books for 100 or so and think someone else can give them success, or believe making 100% quickly is easy!

They over leverage and are quickly wiped out.

So who won?

In my experience not many traders did, but the ones who made money long term had these traits:

They had simple systems they believed in.

They were humble and knew the market would hand them losses and make them look stupid.

They were patient and executed their systems with discipline.

They had a mindset that they would win longer term, no matter what losses they were handed in the sort term and were prepared to persevere.

Keep in mind not many traders win and if you want to then you need:

A simple system you have confidence in can trade with discipline and take short term losses cheerfully.

If you can do the above you have a chance of joining the winning minority – Good luck!

By : Sacha Tarkovsky - http://www.net-planet.org/index.html

Online Forex Brokers – A Checklist for Choosing One

Choosing a forex broker is important in maximising your trading profits and making sure your trading experience is smooth.

Here you will find a checklist so that you can find a broker that will maximize your trading experience.

1. Execution Only

Your broker is only there to help you transact your orders and make sure your account runs smoothly – they should NOT give trading recommendations.

Many novice traders think this is a good idea and their broker knows best, however if he could make money trading he wouldn’t be a broker!

Brokers are there to transact orders and that’s all.

If you don’t take responsibility for your trading you won’t win.

2. Look for tight spreads

This is your cost of doing business and the less you pay the more of your profits you get to keep.

Look for spreads from your forex broker of 3 – 5 pips for trading the majors.

There should be no other commissions or fees - make sure the spread is all you pay.

3. Leverage

Look fro leverage of at least 200:1, although many brokers will offer you more and some go as high as 400:1.

4. Trading platform

Check it out and see how useable and reliable it is and that you get 24 hour support, if you need it at anytime for any problems you may encouter - not all brokers offer 24 hour service so beware.

5. Ease of funding and minimum investment

Today, many forex brokers will let you fund an account online with as little as a $100.00.

If you are a novice starting small is a good way to get your feet wet.

These companies also allow small minimum trades.

If there are online payment facilities, you can fund your account quickly and equally get your profits back quickly.

6. Guaranteed stops

If you are a novice trader and worried about the unlimited liability that margin trading presents, you may want to guarantee your stop and there are many brokers who will provide this comfort for a fee.

7. Extras

A forex broker is not there to give you trading advice but it is nice to get extras such as demo accounts, free newsletters, reports and other educational material, which can help you improve your trading – You will find many brokers who offer a lot of extras and if you are new to trading they are well worth having.

Your forex broker is important and if they provide all of the above in terms of service, you should be able to maximize your trading experience and profitability.

By : Kelly Price - http://www.net-planet.org/index.html

Online Forex Trading Reviews

Online Forex trading is a business of risk. It is only wise to choose your online Forex platform providers and brokers with utmost care. You can read books, magazines, or surf online for the corporate profiles and investment portfolios of the brokers you are considering, but oftentimes, this is not enough.

What you need to do is consult online Forex trading reviews. Here, you will have access to actual assessments from small investors themselves, accurate evaluations from expert financial institutions, and helpful comparisons based on key market indicators.

Benefits of Consulting Reviews

Online Forex trading reviews allow you to read technical analysis of different brokers' performances over the past months or years, either as a whole or in terms of specific currencies. Many reviews are written by veterans in the currency trading industry - people who have traded successfully for years. More often than not, these technical data are rewritten in laymen's terms so that you can understand them completely.

Online Forex trading reviews allow you to compare and contrast brokers, so that you can find one that is willing to handle your investment the way you want it handled. The information from these reviews will help you zoom in on a company whose policies are well-matched to your behavior as an investor - your willingness to take risks, your level of conservatism, etc.

Finally, online Forex trading reviews give you access to the opinions of investors themselves, big or small. The assessments of others who share the same viewpoint and context as you can often prove to be more indispensable than the opinions of trading experts. These people speak your language, share the same concerns as you, and probably have the same questions. Their reviews can give you enough market intelligence to intuitively manage your own portfolio.

By : Josh Riverside - http://www.e-onlineforextrading.com/

The Day Trade Forex System: How to Choose An Online Forex Brokerage Firm

What to look for in an online Forex Brokerage Firm:

1. Low Spreads

In Forex Trading the ‘spread’ is the difference between the buy and sell price of any given currency pair. The lower the spread saves the trader money. Most firms offer 4-5 pip spreads in the Major Currency pairs. The best firms offer clients 3-5 pips.

2. Low minimum account openings

For those that are new to trading, and for those that don’t have thousands of dollars in risk capital to trade, being able to open a mini trading account with only $200 is a great feature for new traders.

3. Instant automatic execution of your orders

This is very important when choosing a Forex firm. You want instant execution of your orders and the price you see and ‘click’ is the price that you should get. Don’t settle with a firm that re-quotes you when you click on a price or a firm that allows for price ‘slippage’. This is very important when trading for small profits.

4. Free charting and technical analysis

You need a firm that gives you access to the best charting and technical analysis available to active traders. The firm that I recommend gives clients FREE professional charting services and even allows traders totrade directly on the charts!

5. High Leverage

You want high leverage—the ability to trade a large amount with a small margin deposit. Some of the best firms offer .25% or 400:1 leverage.

6. Hedging Capability

You want the flexibility of opening positions on the same currency pair in opposite directions without them eliminating each other and without margin increase!

7. A realistic demo account trading capital balance that reflects the actual dollar amount that the trader will start live trading with.

It does the demo trader no good to start out demo trading with a $50,000 account, when in real life he will only start out with $1,000. A forex brokerage needs to offer the trader a demo account starting balance other than the standard $50,000.

After alot of research and personal experience, the firm that I recommend with the above-mentioned benefits is Capital Markets Services LLC (CMS Forex LLC).

Open a free unlimited demo account and start practicing!

The goal of the Day Trade Forex System is to instruct and teach potential traders how to day trade the currency markets and what to look for in an online forex brokerage.

The objective of day trading is to trade the intra day market moves to try to gain small to medium sized profits in any given trading day. This is how this guide will help. Most readers will not have the time or resources to ‘position trade’ like the major institutions and banks do. They tend to look at the big picture holding onto trades for weeks or months.

The Day Trade Forex System is specifically designed for use with the 1, 5 or 10-15 minute charts, with the goal of taking 5-30 pip profits per trade — closing bad trades out using tight stops, or hedging any losing trades. The ability to trade right off the charts makes the CMS trading platform our favorite.We feel that the CMS trading platform offers traders the most features that fit the criteria listed above.

By : Cynthia Macy - http://www.professionalforextradingonline.info/

Online FX Trading

In online FX trading, traders look for a currency that offers the highest return with the lowest risk. For example, if a nation’s financial instruments, such as stocks and bonds, offer high rates of return with relatively low risk, then traders who are foreign to that nation want to buy that currency, thus increasing the demand. Currency is also in demand when its country is going through a growth segment in its business cycle, highlighted by stable prices and a whole range of goods and services for sale. Forex traders who speculate on the values of currencies to earn their keep look for specific signs to indicate when exchange rates may change.

Traders in online FX trading try to predict well in advance the factors like political instability, rising interest rates and economic reforms so that they can get in or out of a currency before others. Correctly guessing where a currency is going and taking a position in that currency at the beginning of the trend can mean huge profits for a trader.

Traders make money either by buying the currency at a lower price and then selling it later at a higher price, or by selling their holdings in currencies of other countries at higher prices before they have time to react negatively to improvements in the first currency. After the markets for their original holding fall, they simply reestablish positions in them at bargain prices.

When a trader purchases a large amount of a particular currency, then he or she is long on the currency. Conversely, when a trader sells a large amount of a currency, then he or she is short on the currency. The Forex market is dominated by four currencies, which account for 80 per cent of the market- the US dollar, the Euro, the Japanese Yen and the British pound.

By : Ross Bainbridge - http://www.e-fxtrading.com/

Learn Online Forex Trading: The Basics of Fundamental and Technical Analysis

The Forex trading market is an around-the-clock cash market where the currencies of nations are bought and sold, typically via brokers. Forex prices can change at any moment in response to real-time events, such as political unrest or the rate of inflation. Currency market players typically use "Forex analysis" as a means of predicting currency price movements. Forex analysis is divided into two types: fundamental and technical. A fundamental analysis uses economic and political factors as a means of predicting currency movements. A technical analysis uses reliable historical data as a means of forecasting these movements. The purpose of this article is to discuss the basics of fundamental and technical analysis.

A fundamental analysis uses economic and political factors, such as housing starts, the unemployment rate, or inflation, as a means of predicting currency movements. Fundamental analysis is concerned with the reasons for currency movements. Many Forex traders who rely on fundamental analysis plan their trading strategies around a number of U.S. Government economic indicators. Some of these indicators are the Consumer Confidence Index (CCI), the Consumer Price Index (CPI), the Employment Situation Report, the Gross Domestic Product (GDP), the Composite Index of Leading Indicators, the Advance Report on Durable Goods, Housing Starts, and Initial Jobless Claims. All of these Federal economic indicators have a marked effect on the Forex trading market. Some of these indicators are released weekly, while others are released monthly or quarterly. Their sources include the Federal Reserve, the U.S. Bureau of Labor Statistics, the U.S. Bureau of Economic Analysis (BEA), and the U.S. Census Bureau.

Forex traders must take other economic indicators into consideration as well. The world's leading economies (for example, the United Kingdom, Japan, France, and Germany) also release their own economic indicators that will have an impact on the Forex market. For example, common economic indicators in the United Kingdom include Housing Prices, Gross Domestic Product (GDP), Vehicles per 1,000 People, Telephones per 1,000 People, and the Percentage of People Employed in Agriculture.

A technical analysis uses historical data as a means of predicting currency movements. The technical analyst believes that history repeats itself over and over again. Technical analysis is not concerned with the reasons for currency movements (for example, interest rates or inflation). Instead, it believes that historical currency movements are a clear indication of future ones. The technical analyst typically uses charts as a tool in predicting currency price movements.

Investopedia states that "In a shopping mall, a fundamental analyst would go to each store, study the product that was being sold, and then decide whether to buy it or not. By contrast, a technical analyst would sit on a bench in the mall and watch people go into the stores. Disregarding the intrinsic value of the products in the store, his or her decision would be based on the patterns or activity of people going into each store."

For example, during the back-to-school buying season, the technical analyst might observe that more people are going into clothing stores than into stores selling flowers. Likewise, the technical analyst might observe that more men are going into stores selling flowers on Valentine's Day than into clothing stores.

Here is another example. Oil prices dramatically increase, thus creating inflation. Interest rates rise as a means of controlling inflation. One historical result of higher interest rates is less money to spend, thus slowing economic growth. Another historical result is increased foreign investment in the currency affected by the higher interest rates, thus strengthening it.

Some Forex traders depend on fundamental analysis while others depend on technical analysis. However, many successful Forex traders use a combination of both strategies. The important point to remember here is that no one strategy or combination of strategies is 100% certain.

By : Gregory DeVictor - http://www.forex-trading-system.name/

Online Forex Trading - A Simple Powerful Method Making Big Profits

We recently put together a very simple system from free info we got from the Internet and traded 4 trades to show its potential and we won 4 out of 4.

There is now another potential opportunity which we will look at with these indicators.

This system is simple and effective and any trader can use it novice or pro, also all the info you need is free.

Lets take a look at another trade.

The system

Only a few things to remember 1. When swing trading you are looking for support and resistance to be tested then for it to hold and price momentum to drop from the level of resistance or rise from support.

2. Breakouts – When a price breaks a significant high or low you go with the breakout if price action accelerates.

3. We are using chart support and resistance and the stochastic indicator to time momentum ( if you do not know how the stochastic indicator works you should check our other articles and look at set ups on a free chart service such as future source.com) it’s the ultimate timing indicator.

4. We are also using RSI to show overbought oversold and Bollinger bands as back up indicators

That’s all we are using! Nice and simple but very effective.

Let’s look at a live set up

The Euro

Prices have moved up to within striking distance of the recent high 1.3400 and are trading down from this level. Expect this resistance to hold and watch for the following:

RSI to move lower and the stochastic lines to cross and stay crossed to the downside with bearish divergence.

This indicates waning momentum to the upside and lower prices should unfold.

Target is the middle of the Bollinger band

If prices move back up and take out 1.3400 on a close basis, the odds favor the bulls and all bets are off.

That’s it a simple trade with low risk and good reward, swing trading within the existing range. A Simple System That Works. This way of trading may look simple, but as we have shown live in 4 trades it can make good profits.

Ok we were lucky and we won on 4 out of 4 trades but even if we were wrong on any of these trades risk was low and rewards were high. This system needs you to pull the trigger on trades but if you practice it you will soon be piling up some big profits either swing trading, or trading breakouts.

Good luck and good trading.

By : Sacha Tarkovsky - http://www.net-planet.org/index.html

Online FOREX Trading – If You Want To Win Understand Price Momentum

If you want to win at online FOREX Trading you need to understand the importance of price momentum in putting the odds on your side.

If you don’t understand price momentum you will lose.

Let’s look at why it is so important and how to put the odds in your favor.

A common error

Most traders like to trade in the following way in online FOREX trading.

They like to buy into support and sell into resistance but they don’t pay attention to price momentum.

They hope resistance and support hold as they enter their positions and this is a recipe for disaster.

Why?

Well keep in mind this well known phrase.

A trend moving in one direction is more likely to continue than reverse.

So if prices are moving strongly to test support and resistance and price momentum is strong these levels can and do give way.

WAIT FOR CONFIRMATION!

A better way to trade is to use support and resistance and wait for them to hold before trading against these levels.

The odds will be vastly increased, as you will be looking for resistance and support to hold before taking your position and seeing price momentum weaken as the levels are tested.

This increases the odds of success for you and allows you to trade with price momentum on your side.

You won’t get in at such a good level as if you predicted correctly without using momentum, but as you can’t predict where price will go anyway always:

Wait for confirmation of a momentum change and your trade is more likely to be successful.

What indicators should I use?

By far and away the best indicator to use is the stochastic indicator.

We don’t have time to explain it in detail here, so simply read our articles.

The best set up you can get is:

For the stochastic lines to reverse and cross with either bullish or bearish divergence as the price tests support or resistance.

This will show price momentum changing and falling as the test is made, allowing you to enter a trade with momentum on your side, increasing your chances of success.

Another useful indicator to use is:

The Relative Strength Index RSI devised by Wells Wilder.

Again, if you don’t know how it works read our other articles.

Watch it to turn down as support or resistance are tested.

Get the odds on your side

The above two indicators are great for helping you judge price momentum and decide if support or resistance are going to hold.

Support and resistance levels give way frequently, but get price momentum on your side before trading and you will dramatically increase your chances of success.

Remember:

To increase your chances of success trade with price momentum on your side, the trend is your friend as the old saying goes – Act on price confirmation and don’t PREDICT.

Good luck!

By : Sacha Tarkovsky - http://www.net-planet.org/index.html

Online FOREX Trading – Become a Successful Forex Trader in Two Weeks!

One of the most inspiring stories I ever read, was how legendary trader Richard Dennis taught 14 people who had never traded before, to trade successfully in just two weeks.

The result?

They traded and went on to make millions and become some of the most famous traders of all time.

So how was it done and can you do the same? Let’s find out.

Richard Dennis taught them three major points:

1. A simple method they could have confidence in.

2. Money management.

3. Applying the method with discipline.

His advice was very specific with no filler.

So, let’s look at what you need to learn.

1. Method

You need a method you have confidence in and it needs to be simple.

There is no correlation between how complicated a method is and how much money it makes.

In fact, the reverse is true.

A complicated method has more components to break and is less robust in the face of brutal market conditions.

Look up “technical analysis” on the net and learn specifically how and why it works and also the theory of “trading breakouts”

You should be using a long term trend following methodology looking for the big trends that produce the big profits and breakout trading is ideal for this.

If you want to win at online forex trading, you need to know about breakouts.

Base your methodology on it – It’s simple and it works.

Now you need to time entries.

Look at some indicators that are based on momentum and look up “stochastics” this is simply the best momentum indicator you can use.

2. Money Management

If you start with a “breakout method” and base your trading method on it, then stop placement is obvious.

If you only trade significant breaks your odds of success will be high.

3. Discipline

Is perhaps the hardest part of trading online forex.

You need to apply your method with rigid discipline otherwise you have no method at all.

Discipline is all about experience and even seasoned traders find it hard to keep executing a method when a string of losses occur.

However, you are part of the way there to having discipline, if you have devised your own method.

You know its logic and should be able to stay with it as you will have confidence in it to work.

All the material you need to get up and running is free and on the internet, but it’s worth reading a few books.

These are my favorites and will they inspire you.

1. Market Wizards and The New Market Wizards ( edit )

By Jack Shwager.

These are interviews with some of the top traders of all time including:

Richard Dennis and the turtles and many more – Packed with insight and very inspiring.

2. Trader Vic

By Victor Sperandeo.

A true trading legend, who shares with us his thoughts on trading, money management and trading psychology, a fantastic all round book.

By all means read a few more, but these three are my favorites from over 500 I have read.

Trading is Simple, yet people try and complicate it.

They think the more effort they put in the more they will get out – This is totally false.

Work smart not hard!

If you want to make money you need to work smart not hard and if you want a perfect example of this look at the turtles!

In just two weeks they all became great traders.

Maybe, you wont make as much money as them, but if you learn and do the above, you will have the basic platform to make big profits in online forex trading.

Finally, you will have done it all on your own and will have given yourself success, how satisfying is that?

By : Sacha Tarkovsky - http://www.net-planet.org/index.html

Online FOREX Trading - Profit Opportunities Live Update

Yesterday we looked at 3 trading opportunities. Today, we are going to look at one shaping up in the euro currency, a possible profit opportunity and update the others. Let’s take a look first at the euro. We are using the chart service futuresource.com and indicators RSI, Bollinger bands and stochastic in making our observations. This report is written at 10AM Central European time.

Euro
The euro is in a firm up trend against the dollar and prices have recently retreated from contract highs. Prices are now at the middle of the Bollinger band and are looking to hold around this level. RSI has fallen back from overbought levels and stochastics are down, but oversold. Support lies at 1.34 and 1.32. Watch for stochastics to bottom and cross with bullish divergence to indicate a shift in momentum, accompanied by rising RSI. This looks like a correction in a bull market. Wait for the correction to run its course, by watching for the above indicators to give you a signal and shift the momentum back to the bulls.

Other trades we looked at yesterday were:

US V Canadian Dollar
Same comments apply as before:
We expect a bounce. RSI very oversold and the dollar is trying to hammer a bottom out above the key 1.10 level. Stochastics remain flat. If they cross with bullish divergence, expect a move up. A close below 1.10 means all bets are off.

US V Japanese Yen
We expect the dollar to hold above the breakout point. Stops should be below the breakout if long – if not, to go long look for stochastic to turn up with bullish divergence. The yen is the weak currency of the majors against the dollar and we would expect the dollar to hold it’s up trend.

Today, should give a clearer indication of near term direction. Short term momentum is down in the dollar. Watch the breakout point and stochastic momentum.

British Pound V US Dollar
The trend in the pound is up but short term momentum is down. We expect the pound to move up after the recent correction, but need to see a shift in near term momentum.

Prices have broken the mid Bollinger band and are drifting lower. RSI is no longer over bought. Stochastic momentum is over sold and down. To enter a long trade watch for a cross in momentum on the stochastic with bullish divergence and also a rising RSI. With all trades don’t predict wait for confirmation of shifts in near term momentum before attempting positions.

Good luck and good trading.

By : Sacha Tarkovsky - http://www.net-planet.org/index.html

Online FOREX Trading – 10 Essential Tips for Novice Traders

If you are new to online FOREX trading you will realize that 95% of traders lose and lose quickly.

To win at currency trading you need the right FOREX strategy - incorporate the following 10 tips and you will get a head start in your quest for consistent FX profits

1. Don’t believe the hype

You will read a lot of information on how easy FOREX Trading is and how you can buy an e-book for $100 and become rich – this is not the reality. While there is some good advice out their – you can get all the information you need free on the net.

If you want to read about the top traders of all time and get advice from traders who have walked the walk -rather than just talk the talk, go to Amazon and pick up some books from the top traders of all time.

2. Don’t day trade

The biggest myth of FOREX trading is you can make money FOREX day trading.

You can’t!

Many novice traders fall for this myth and lose quickly.

All short term volatility is random and there is no way of predicting where prices may go, so you may as well flip a coin.

If you want proof that FOREX day trading systems don’t work ask a vendor for a track record of real time profits over the long term and you won’t get one – PERIOD.

3. Work smart not hard

You don’t need to work hard in FOREX Trading, you need to work smart. This means focusing on the RIGHT FOREX education and learning FOREX tools that work. You can easily learn to trade FOREX markets in a couple of weeks. You just need to focus on the right information.

You don’t get rewarded in FOREX trading for working hard, you get rewarded for being right and that means working smart.

4. Risk = Reward

If you don’t like risk forget currency trading and do something else.

Many traders simply want to avoid risk as much as possible, putting stops to close, or snatching profits. If that’s you – you will NEVER achieve currency trading success.

You need to cheerfully accept risk and loses to succeed in online FOREX Trading.

5. Do It on your own

Only you can give your self success.

You need to be confident in your ability to succeed and if you are, you will have the discipline to apply your method for long term gains.

If you follow someone else you will not have the right mindset to succeed. You will lack discipline and will throw in the towel as soon as a string of losses occur. Do it yourself and your chances of success are enhanced.

6. Get a simple method

Simple methods work better than complicated ones, as they are more robust with fewer elements to break in the face of ever changing market conditions.

There is no correlation between how complicated a system is and how much money it will make.

If you are starting out in currency trading, use support and resistance, a breakout methodology and some confirming indicators and that’s it.

The above way of trading is perfect and will help you get the big profits from the big moves.

7. Trade Breakouts

A timeless way to trade FOREX markets.

It works and will continue to work, simply read out other articles for more info on this simple but powerful methodology.

8. Be patient

You don’t get rewarded for how often you trade online FOREX – You get rewarded for spotting and acting on the best trades and these don’t come around every day.

Be patient and only trade FOREX signals from your system – don’t be tempted to trade for the sake of trading.

9. Be realistic

You can make a lot of money in FOREX Trading so what’s realistic? The top traders compound 50 – 100% per annum so this is a good number to aim for.

These gains will compound quickly and build real wealth longer term.

Be realistic and don’t try to get rich over night

10. Know your edge

If you understand the other 9 points, you will understand that you need an edge to make money longer term in online FOREX markets. If after you have devised your FOREX trading strategy you don’t know what your edge is - you don’t have one!

You need to know what your edge is over the majority of losing traders to win.

Final words

If you incorporate the above 10 tips into your online FOREX Trading plan, you will be well on your way to making money in the worlds most exciting investment market.

Welcome to the world of FOREX trading!

By : Sacha Tarkovsky - http://www.net-planet.org/index.html

Online FOREX Trading - To Be Successful Don't Listen To The News

The online forex trader today has a vast amount of news at his fingertips due to growth of the web and many investors think the more news they study and act on the more likely they are to win, however the exact opposite is true:

Pay to much attention to the news and you will lose.

The reason for this may not be obvious, so let’s look at this question in more detail and see why.

Will Rogers once said:

“I only believe what I Read in the papers”

He was joking but the majority of new online forex traders think they can use the news to their advantage, but they can’t here’s why:

Markets discount

Let’s face it, we see stories all the time from news wires that are full of convincing reasons why a currency will rise and fall, but in most cases there simply good stories and the currency often moves in the opposite direction.

The markets however don’t move on supply and demand fundamentals and opinions nor do they move logically.

Currency prices move to the following equation:

Supply and demand fundamentals + Investor psychology = Market movement.

Investors are in the equation and it is how they view the news that is so important, not the news itself.

Investors are driven by emotions greed fear and hope and it is they that determine the price.

Markets discount news instantly in today’s world of lightening fast communications, so it is almost impossible for most traders to trade off news stories.

Throw in the unpredictably of human nature and trading news for most investors means losses.

Discipline

If you pay to much attention to the news, your emotions can well come into play.

You will hold positions you should not, simply because the “experts” are saying they are right in the press.

Don’t forget these experts are selling stories and are not traders.

If you pay to much attention to the news you will simply let your emotions get in the way and discipline will go out the window.

It’s a fact, that:

Major market tops are formed on bullish news and major market bottoms are formed on bearish news.

A compelling conclusion

For small traders the best way to trade fore markets is with a disciplined technical system.

Why? Because it takes the news into account anyway.

All it assumes is that fundamentals are instantly discounted and will show up in price action.

Not only does technical analysis take into account the fundamentals and news, it also takes into account investor psychology.

Taking into account investor psychology is critical, as investors determine the price of anything.

Human nature never changes.

Repetitive price patterns can be seen in charts that reflect human psychology and can be traded for profit.

That is the opportunity, if you trade with a technical system and ignore the news.

By : Sacha Tarkovsky - http://www.net-planet.org/index.html

Online FOREX Brokers – A Brokers View Of Why Novice Clients Lose

I write frequently on how to trade but my observations on the markets here I will go back to may days as a broker and give you the view from the dealing room on client behavior and the major reasons traders lost.

I dealt with several thousand traders over 8 years and here are my observations.

This was the late eighties and early nineties and online FOREX brokers of course did not exist, clients behave no differently today as they did then.

Here are the top reasons traders lose with any FOREX broker and that includes online FOREX brokers

1. Methods traded were illogical

The first reason was simply methods did not work as logic they were based upon was not relevant to market movement.

Today, day trading is more popular than ever with online FOREX brokers, but it was around 20 years ago and the same results were obtained which were:

A wipe out of equity in a short time.

Day trading did not work then and it doesn’t work now- Volatility is random in short time frames.

Any support and resistance seen in a daily time frame therefore is useless for trading purposes.

Online FOREX traders just like we did must love day traders lots of commission generated!

As a broker your balance sheet is based upon commission to equity.

You generally assume all clients lose anyway, so if they pay lots of commission while losing all the better.

There were other methods that lost especially the ones that clients bought that promised regular money or an income from trading.

These methods were normally bought tested in hindsight and the trader threw in the towel after a few losses, or was wiped out.

Another group that lost were the ones with complicated methods.

They figured the more complicated a method was the more likely it was to succeed, this of course is totally wrong.

Simple systems work best as there are fewer elements to break.

We had one trader who bought a system which he proudly boasted was based on artificial intelligence and the same technology used by NASA to put a man on the moon

Unfortunately, it did not help him in the market!

2. Discipline

What always struck me was how few clients could trade in a disciplined fashion.

They had jobs where they had to be disciplined everyday, yet in the markets they simply behaved irrationally as soon as a few losses came along.

- They would chop and change methods looking for the perfect one. - They would revenge trade to catch up losses. - They would blame the markets and call them stupid

When money is on the line we all know it’s hard to be disciplined, but the emotions that we saw ranged from crying to total despair, including one suicide.

3. Money management

Many clients were good at picking market direction but could never make any money due to poor money management.

This was problem for them not only in cutting loses ( they very often removed stops or never placed them) of course, a small loss soon becomes a big loss, the trader cant take that, then he was handed a loss he had to take.

He would have been better of taking the small loss in the first place.

What surprised me was how few traders could accept big profits.

The bigger the profit became the more they wanted to take it even if their system indicated further gains.

The argument given was:

“you don’t go broke taking a profit”

Of course you do, if profits don’t exceed your inevitable losses.

This was perhaps more important than taking small losses.

Traders I saw could not allow trades run to $10,000 or more, a couple of thousand and they banked.

There are more reasons but they above are the ones that caused most losses and of all the traders I traded less than 1% made money longer term.

In part 2 of this article we will look at different personalities we traded, who won, who lost and the traits of the traders who won.

By : Sacha Tarkovsky - http://www.net-planet.org/index.html

Online Forex Brokers - Is Your Broker Your Friend or Your Enemy?

I read a lot about the above subject and most traders don’t understand the role the online forex broker performs.

So, is an online forex your friend or your enemy?

The answer is:

Neither. If you know how to use a broker correctly, all they do is simply transact orders on your behalf and that’s it.

Brokers don’t hunt stops

The thought that brokers go around hunting stops and trying to “get” their clients is not true.

This myth comes from day traders who cant understand why they get stopped out so often and lose, so they blame their broker.

What they should really look at is:

That their systems are flawed and the real enemy (if it can be called that) is price volatility.

Volatility is only the enemy though if you let it be.

The fact is though that trading in short time frames with close stops is a great way to lose your money.

That’s the traders fault and they need to deal with volatility.

If you jump in front of a speeding car you will get run over.

That’s not the cars fault, its yours.

That’s why you never see a long term day trading track record with a profit and a great excuse is blame the broker not the logic of day trading!

I was a broker for 10 years and we loved day traders, they would lose their money with no help from us and give us a great profit.

We didn’t need to help them lose they did it all on their own.

Think about this simple fact:

In a market that trades trillions of dollars a day short term moves are random and no one (apart from a central bank maybe) can push prices where they want them.

All you need from a broker is a tight spread and that’s it and there are plenty of brokers who will give you that.

Then its down to you to cope with market conditions.

Brokers that can harm you.

Are the ones that offer advice to help you trade.

Well, if they were so good at trading they would be traders not brokers!

The fact is your broker should simply transact your trades and the rest is down to our trading methodology.

An online forex broker then is neither a friend or an enemy there simply there to transact orders.

Get one with low transaction costs don’t take advice and then you can set your trading plan in motion.

It really is that simple.

By : Sacha Tarkovsky - http://www.net-planet.org/index.html