What You Need To Know About Forex Trading

by dmeadows

No matter how you choose to learn and improve your forex trading skills, you need to understand 4 basic elements of Technical Analysis to be able to trade for profit with any forex trading system. No matter what your forex system is, when learning to trade forex, you must know these 4 basic key elements:

1st:

You have to understand how to pick the TREND of the market session that you are trading in.

2nd:

To help you trade with the trend of the session you need to understand price action and how to use OSCILLATORS, as they help to smooth out the trend.

3rd:

You will have to have a working knowledge of FIBONACCI's.

4th:

The last element is being able to look in the past at previous SUPPORT & RESISTANCE price points in the market.

1. Trend

How do you pick the TREND of the Day or more important the TREND of the Market Session that you are trading in?

When you start your trading for the day, the first question you have to you ask yourself is: Which way am I trading today? In other words: Am I buying or selling? Is the market going to go up or down?

If you don't know that answer within the first 2 minutes of looking at your charts, then you are guessing and that means you will probably trade wrong and you will probably loose.

You need to understand that there are 4 trading sessions in each 24 hour day (Sydney, Tokyo, London, and New York). Each session has its own characteristics in direct relationship with Daily Range, Areas of Support and Resistance also known as (Swing Highs and Swing Lows) and actual Price Action Movement.

In order to properly determine the trend you have to look at multiple time frames at least (3) i.e. 5min chart, 15min, 1hr chart. This will help you to see a longer term trend and a shorter term trend so that you can understand how to trade with and against, meaning you will learn how to trade Counter Trend Trade as well as With the Trend Trade. This is very important because the market does not move strait up or strait down.

You need a MENTOR that will teach you how to determine the TREND.

2. OSCILLATORS
To help you trade with the trend of the session you need to understand price action and how to use OSCILLATORS, as they help to smooth out the trend.

Oscillators are momentum indicators that help us to see when the market is moving from an overbought or oversold position. In other words they help us to see when the market has moved in one direction long enough to merit a retrace or pullback.

There are two types: Those that show Momentum and those that show Price Exhaustion.

Momentum Oscillators are typically some sort of Moving Average. There are: Simple, Exponential, Smoothed, and Linear Weighted to name a few. These are supposed to filter out the "noise of the market" and help you to determine a more smoothed out trend movement.

Price Exhaustion Oscillators are available by the dozens like: Stochastics, Relative Strength Index, Average True Range, Ichimoku Kinko Hyo, MACD and many, many others.

The problem with Oscillators is that they are all LAGGING, meaning that they follow price action as the market moves up and down the Oscillator will follow the price up and down. They do not predict, they cannot predict, they will never predict with accuracy the way price is going to move. In other words, there is no such thing as a "leading Indicator".

They simply show us that a trend has been established and thus help us to pick the direction that we should be looking to trade in accordance with Price Action.

As such you should never use more than 1 Momentum Oscillator and 1 Price Exhaustion Oscillator. If you use multiple Oscillators you will always be behind the trade, meaning that the move up or down will be over before you can react and enter trying to follow the trend. Multiple Oscillators create what is known as "Analysis Paralysis".

Your MENTOR should show you which OSCILLATORS to choose and how to use them properly.

So before joining any forex brokers, forex charts or forex opportunity, it is extremely important to find and talk to a forex mentor that will teach you these parts of technical analysis in order for you to be able to trade for profit.

About the Author

The author of this article is a proven 7 year forex trader and has trained new and experienced traders all over the world. For more information on this incredible forex mentor and the remaining 2 key elements **CLICK HERE**

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Do Not Use Pivot Points When Trading The Forex!

by dmeadows

The biggest financial market in the world is the FOREX! If you are looking to get into forex trading or are looking for a forex opportunity, make sure you do not take any forex training or forex training systems that include methods that use pivot points. I DO NOT USE PIVOT POINTS! I DO NOT USE PIVOT POINTS AND YOU SHOULD NOT USE PIVOT POINTS!!

Here is why! First what is a pivot point? A pivot point is a technical indicator derived by calculating the numerical average of any financial instrument, using the high, low and closing prices.

How to Calculate Pivot Points
There are several different methods for calculating pivot points, the most common of which is the five-point system. This system uses the previous days high, low and close, along with two support levels and two resistance levels (totaling five price points) to derive a pivot point. The equations are as follows:

R2 = P + (H - L) = P + (R1 - S1)

R1 = (P x 2) - L
P = (H + L + C) / 3
S1 = (P x 2) - H
S2 = P - (H - L) = P - (R1 - S1)

Here, "S" represents the support levels, "R" the resistance levels and "P" the pivot point. High, low and close are represented by the "H", "L" and "C" respectively. Note that the high, low and close in 24-hour markets (such as the FOREIGN EXCHANGE) are often calculated using New York closing time (4pm EST) on a 24-hour cycle. Limited markets (such as the NYSE) simply use the high, low and close from the day's standard trading hours.

THE reason I don't use pivot points is because they are nothing more than a FIBONACCI. YOU SHOULD NOT USE PIVOT POINTS FOR POINTS OF ENTRY, which is what a lot of trainers are teaching their students to do!

Many forex trading strategies use a combination of pivot points and Fibonacci's. HOW ARE Fibonacci's SIMILAR TO PIVOT POINTS?

Fibonacci's

In technical analysis this tool is used by most to try and predict a retracement of two extreme points (a low to high or high to low move) to a Fibonacci ratio of 23.6%, 38.2%, 50%, 61.8%, 78.6% or 100%. There are also Fib extensions such as the 1.27%, 1.618% and 2.618%.

The thought is that a trader will be able to identify a strategic or specific point in a market price pull back and in effect target price positions for stop losses or take profits.

While it is true that the above can and does happen, the truth of the matter is that NO one can tell exactly which Fib Level (price point) will be the one that turns the market. When you look at them they all look good. So what traders have done in an effort to find the magic fib level that will turn the market is to employ other strategies to help them pin point the exact Fib (price point) that will be there target.

These strategies include: Looking in the past at previous price points of Support and Resistance. They use Trend Lines that overlap on a Fib Level. They will look for overlapping Fib Levels. They will look for Moving Averages and other Lagging Indicators to help them see which Fib Level is going to turn the market.

While there may be some success with using these techniques the reality is no one knows which fib level will turn the market! The same holds true for those who use pivot points, they do not know at which pivot point the market will reverse or continue! This is why I do not use pivot points as points of entry!

About the Author

The author of this article is a proven 7 year forex trader and has trained new and experienced traders all over the world. For more information on this incredible forex mentor and 3 other key forex trading elements **CLICK HERE**

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Forex Tips

Always use Stop Loss Orders. If you don't use them, it will kill you financially. We recommend stops 30 pips above or below your entry price.

Don't loose more than 5%-10% of your total capital in each trade. Adjust your stop orders and leverage if needed.

Let the profits run, cut the losses. Instead of using Take Profit orders, it's better to use a "Trailing Stop". If your broker doesn't support it, you can do it manually. Set the stop price at 30 pips (or the amount that you have chosen) above/below the maximum/minimum price since your entry. You will have to adjust the stop level continuously, but you will get much better results.

Don't go against the trend. Go with the trend.

Capitalize well. Fund your account with enough money. For standard accounts, at least $5000 (for mini accounts $500).

It's less risky to don't let trades opened overnight.

Forex Robot Software - Are They Just the Latest Internet Investor Scam?

by richpowerman

If you have ever tried your hand at investing in the multi-trillion dollar Forex marketplace, when you look at all the variables needed to place reliable and rewarding trades, how many times have you thought to yourself if there was a way of computerising all of these variables, so trading becomes foolproof and rewarding?

Have you also had this thought that if you could get a bunch of software code to place your trades, you could really cut out all the concentration and learning that most people go through to become expert traders?

Well, consider this, if you wanted to become a brain surgeon, do you think that you could short - circuit years of mental and physical training and practice and operate on your best friend tomorrow - perhaps not!

Now, Forex Robots, or Expert Advisors (EA's) do have their place, as long as you have had some instruction in Forex trading, and you have the right mentality to even approach this massively rewarding, but terribly unforgiving, form of investment.

First of all, lets look at what a Forex Robot is, and how it is usually used. One of the most popular trading platforms in use by many of the top Forex Brokers is known as the Meta 4 trading platform. This platform has its own unique software tools that enables clients using that Broker to either create their own 'Expert Advisors' or to buy one of the many available on the Internet, and simply install it on their Meta 4 broker station. They just set it running, and Bingo! They are trading automatically!

The trouble is, you are then totally at the mercy of some remote programmer, who may have been given a good idea by an expert trader to turn into an automated solution, but even then, the expert would have probably used this routine for certain market conditions, and either switched it off and traded manually during difficult market conditions, or just tweaked his parameters as and when necessary.

When you look at the ever-expanding range of Forex Robots appearing on the internet, all making fantastic claims of turning you into a millionaire in under a year, and all costing around $95 for an outright purchase, who do you really think is making all the big money.

I would suspect that the authors of all of these expert advisors are sitting quite pretty, as once your name appears on a 'Forex Interest' list, you will probably get a new promotion every week!

This is not to say that Forex Robots don't have an important part to play in assisting traders to make a little extra income. In fact, there are two types that are usually of great assistance to the average trader, and even 'armchair' Forex investors.

The first type is where they are used to assist traders to extend a particularly trade, as opposed to identifying a good opportunity.

For instance, I use a very good proactive charting system to identify trades, and when I place a trade, to maximise on its success, I will often use a Robot to help me progress the trade. If I enter a particularly good trade, that may go on for hundreds, or even thousands of pips ( I wish), then rather than use a trailing stop, and a fixed 'Take Profit' point, I would rather move my stops manually, and also move up my take profit pointer.

I have a very good EA that I can use that is brilliant at just that sort of constant manipulation, so I don't have to spend days staring at my screen, and possibly losing out right at the crucial time when I just have to sleep!

The second type I find very useful (and usually highly profitable) is a combination of a Forex Robot, in conjunction with a paid subscription for a managed service that will change the parameters as market conditions dictate.

Forex Robots have their place in this lucrative market, but like all tools, they must be used with a little caution. Always try and see if there is an active user group for the Robot you want to play with.

Bear in mind also that there is no real substitute for a bit of hard work and learning techniques to make a really great Forex income.

Try it - and be impressed.

About the Author

Getting involved in Forex can be fun , if you do it the right way.

Want to learn, earn or invest in Forex, then this fre.e 20 page report is a MUST! It explains

Forex Robots,

Forex Funds, and even Trading Apprenticeships.

http://forexmastergroup.com/invest

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Making Sense of Forex Quotes and Pips

by snoopstation

Forex quotes are always listed in pairs, these quotes reflect the exchange rates of the currencies. These pairs look like this: GBP/USD = 1.9714. The currency listed first is known as the base currency (being the base of the trade), the second is called the counter, or quote currency.

All well and good, but what do these numbers mean? The value of the pair is a ratio of one unit of the base currency to it's equivalent in the quote currency. Supposing that you expect the value of the base to rise against the quote, buy the base currency and sell the quote currency, and vice versa. As an illustration, say that the value of the Euro (EUR) is expected to rise against that of the US Dollar (USD). In this case, buying Euros and selling US Dollars at the same time is what you would normally do. This is called going long.

Further, take the Forex quote CHF/USD = 0.8944 as an example. Say that the Swiss Franc (CHF) is expected to fall as compared to the US Dollar (USD). You would sell US Dollars and buy Swiss Francs - this would be going short.

Now, in an actual Forex trading situation, the exchange quotes will be listed at two slightly differing prices, for instance: EUR/USD = 1.7420/1.7425. The left quote is the Bid price, the right is the Asking price. The difference between these is call a Bid/Ask spread, or just Spread for short. The Bid price is the price you can sell your currency for, while the Ask price is the price at which you can purchase the currency.

This spread means that if you were to buy a great deal of currency, then sell it before there had been any change in the relative values of the two currencies, you would lose money on the trade, but the dealer would make money from the trade. A Forex dealer makes their money from the Ask/Bid Spread. They are in a good position, as they stand to make money whether or not you do well with your trade.

Forex quotes are typically quoted to four decimal places - for example:

USD/EUR = 0.6793
EUR/GBP = 0.7468
GBP/CHF = 2.2041
CHF/AUD = 1.0095

The exception to this rule, at least among the major currencies, is the Japanese Yen (JPY) . If the Yen is being quoted, then the Forex quotes are just to two decimal places, as in these examples:

USD/JPY = 109.32
EUR/JPY = 160.95

This is due to the value of the Japanese Yen being only about one hundredth of the value of one U.S. dollar.

A change of 1 in the last decimal place in a quote is named a Pip. this is the smallest amount by which the relative values of two currencies will change. Normally, a Forex brokers commission (the Ask/Bid Spread) will be somewhere between 2 and 5 Pips.

A movement of 20 to 50 Pips is a typical shift in the value of a quoted pair on any given day of Forex trading. The market can sometimes experience greater volatility though, with much larger movements being seen. In November 2007, there were some bigger shifts in the relative values of the US Dollar (USD) and the UK Pound (GBP), when the change in relative value of the two currencies was as much as 200 Pips on some days.

Usually, the daily changes in the Forex market are very small - so trading with very large amounts of money is the way to go if you are to make a sizable profit.

Let's say that the Euro (EUR) is expected to rise against the U.S. Dollar (USD). Based on this, you buy 100 Euros at a quote of EUR/USD = 1.4720/1.4725. A hundred Euros would cost you $147.25. If the Euro rises fifty Pips against the dollar the quote is now EUR/USD = 1.4770/1.4775.

Then say you sell your hundred Euros and buy U.S. Dollars. Your Euros would then fetch $147.70, or a profit of only $.045. Not much - even had you purchased a thousand Euros, you would still only have $4.50 to show for a day's trading. This is why Forex trading is generally done with much larger amounts of money.

About the Author

Ian Armstrong is an avid Forex enthusiast.

He recommends using "Easy Forex" as a good way to start trading with small capital (as little as $100 USD). Find out how to set up your own Forex account at Easy Forex Trading Platform

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How to Choose a Forex Broker

With so many different choices out there, how does a Forex "newbie" pick a broker? Chances are most new traders have no idea on where to start - and that's okay! We're here to help! We have put together a simple three step process to help you find a broker that YOU think will best suit YOUR needs. You might be thinking now, "Three steps? That's it?" Yesssiirrrr!

In the first step, you will go through some of the main questions you need ask yourself when reviewing different brokers. Then you will take a look at different brokers and their available features. We have put together a comparison guide by taking some of the most frequently asked questions across the internet, and surveyed some of the most frequently asked about brokers out there, so that you don't have to.

With this guide, you can narrow your choices down and take the final step of talking with different brokers and demo trading on different platforms. Simple, right? Let's begin...

Step 1: Do your research

Before comparing brokers, do you know what to look for? No? Well, here are a few of the main questions you should ask yourself:

1. Is this broker registered with any regulating authorities? Check to see if your broker of choice is registered with the National Futures Association (NFA) or Commodity Futures Trading Commission (CFTC) if they're based in the US. If the broker is based in the United Kingdom, check with the Financial Service Authority (FSA). If the broker isn't registered with any of these or any other recognized regulating firm, then you may want to think twice before signing up with them.
2. Dealing Desk or Non-Dealing Desk broker? Does the broker offer fixed or non-fixed spreads? How wide are the spreads? These questions are more significant to those traders who like to take quick profits on a few pips. Large and/or variable spreads can cut into the profits of this type of trading strategy.
3. How much or how little leverage will a broker give you? We highly recommend you review "Leverage the Killer"before deciding on how much leverage would be suitable for your trading style. The phrase, "Less is More," can save every newbie
4. Of course, you’re not going to start trading with real money right away, right? Well, when you do having a winning strategy and you are ready to trade live; knowing how much risk capital you have to start with makes a big difference. If you have $2000 or less to start with then you probably want to start trading "micro" lots. Not every broker has this feature.
5. Does this broker credit or debit daily rollover interest? Some brokers either do both, deduct interest, or neither. This information is important to traders who hold positions overnight.
6. Does this broker over premium services such as charting, news feeds, and market commentary? How important are premium services to my trading?

Step 2: Compare brokers

Let's not beat around the bush, now you need go to Broker Comparison Guide.

Step 3: Open demo accounts and ask questions.

Pick at least two brokers that fits most of your criteria and open up demo accounts. Trade in different market environments. Learn all the different features of each trading platform. If you have questions, don't be afraid to ask. Many brokers have excellent customer service support and would be happy to answer your questions.

Most demo trading platforms are very similar to their live counterparts, but not exactly the same. There may be a difference in speed of execution, slippage, and platform reliability (most of the time live accounts are more reliable than demo accounts). When you do have your strategy down and you are ready to move to a live account, start off small, test the waters, and see if this particular broker will suit your trading needs. (source : www.babypips.com)

What is Forex Trading

Foreign Exchange or known as forex is one of the options that very popular investment at this time. Forex Trading is a transaction value of trade exchange foreign currency in the international money market. Forex market is the largest money market in the world.

The transaction in the forex market are: the governments in the world, the main banks in the world, international companies , Hedge funds, foreign exchange speculator and individuals. With so many players in the forex market is causing a rotation of money very quickly. Transactions that occurred more than 1.9 trillion U.S. dollars every day making money can move from one place to another in only a few seconds.

Like the stock market players can do forex trading companies using the service broker or do it online via the internet.

Forex market movements began to revolve from the New Zealand market and Australia is in progress at 05.00-14.00 WIB, continue to Asian markets, namely Japan, Singapore and Hong Kong, which took place at 07.00-16.00 WIB, to the European market that is Germany & UK, which took place at 13.00-22.00 WIB, to the United States market, which took place at 20.30-10.30 WIB. In the development history, the central bank owned by the countries with reserves of foreign currency that even the biggest can be defeated by the strength of the forex market survey .According to BIS (Bank International for Settlement), which was conducted at the end of 2004, the market value of the transaction forex reaches more than USD $ 1.4 trillion per day. Thus, the prospects of investment in forex trading is very good.

Given the level of liquidity and accelerating the movement of the high prices, the FOREX has also become the most popular alternative because the ROI (Return On Investment, or the value of the investment return that we have been planting) and the profit that can be obtained exceeds the average trade in general (usually average average return of more than 5% - 10% per month, can even reach more than 100% per month for professional traders). As a result of the rapid movement, the FOREX also high risk if you do not have enough knowledge and settings with good financial management.

Trade forex has several advantages compared with the trade financial products such as stock trading, namely:

24 Hours Trading

Can be done 24 hours a day, 5 days a week, whenever and wherever we are.

Liquidity

Very liquid with a number of broker / dealers who play in the forex market.

The low transaction cost

Brokerage commissions are relatively small, even for online trading through the Internet there are no transaction fees are charged only but the amount varied. In addition spread also small.

Potential benefits 2 direction (up or down)

Have potential benefits in both the currency and the stronger currency on the wane.

Margin Trading

Trade with the margin to make the investors exceeds the amount of capital owned.

Risk Management

In trading on the forex trading generally or in particular there is always the risk of loss. Risk can not be avoided but can be eliminated by way of risk management. Stop Loss and Limit Profit Create a limit to the extent you are able to bear the losses and make a limit to their advantage. Stop Loss function to avoid greater losses if the price movement is not as we expected, and become much against our expectations. At a certain level where we want to bear the losses and put a stop loss at the level of the position we will be automatically closed and that further losses can be prevented. Profit limit work to determine the profit target, so that we achieve a time when prices have been moving on the values that we expect the position we will be closed automatically. This is useful if the price level that we want to reach out price movements turn the advantage we have successfully secure. Cut Loss and Swicthing If we know that we estimate a price movements, for example, if you take the position tend to buy it for the price down so we can close the transaction with a loss how to cut losses from the bear greater, especially for those of you who do not give a limit to the stop loss. After that we do take a position with the switching Sell. Trading Psychology If the knowledge about forex, trading mechanism and how to do forex transactions via the Internet is understood, then we can decide to do real trading. Things that need to be prepared before the start of trading: a. Money b. Time c. Trading help (assistance) The main trading platform that works: a. Forex trading is not a way to become rich quickly. b. Follow, learn and understand the strategy and analysis conducted by professionals. c. Learn how to use technical indicators. d. Know yourself. Psychological mistakes that are often done a trader: a. Does not have a trading plan. b. Expectations too high. c. Take decisions without the data or behave chancy. d. Greedy. e. Do not install a stop loss. f. Overtrade. G. Blame the market h. Vengeance.

Fundamental analysis

In the transaction currency is not separate from our expertise to conduct the analysis. Analysis is done to determine the direction of movement of the currency. There are 2 methods of analysis and fundamental analysis of the technical analysis.

Fundamental analysis is based on the analysis of the situation and conditions of economic, political and security globally. Information and news related directly with the economic situation can be used as an indicator that important.

Some fundamental factors that are used to perform analysis and to be seen is as follows:

1. The interest rate (interest rate).
2. Balance of Payment (BOP).
3. Producer Price Index (PPI input).
4. Consumer Price Index (CPI).
5. Retail Sales.
6. Non-Farm Payrolls
7. Gross Domestic Product (GDP).

Software Forex Trading

Please download here to get the software for free

Forex Trading

Currently, earn the money on the internet has become the trend of modern society. One of them play with the foreign exchange (forex) online. In addition to practical, also can make additional income opportunities. With online trading, you can be enjoyed anywhere, anytime for 24 hours.

This website is deliberately created for beginners who start learning online trading.

Here you will be taught and the introductions:

1. What is Forex Trading
2. How do I start trading in the market
3. In terms of foreign exchange transactions
4. Profit and loss using the online broker
5. Download the software to deal in foreign exchange
6. Transaction Demo Account and Real Account
7. Risk Management
8. Characters Trading

Hopefully this one is able to provide benefits for all children of this nation, so it does not float in the grief and uncertainty in the search for additional income. With the knowledge of foreign exchange trading learn here I hope you will become a "SMART-WORKER," not a Hard-Worker.