forexbasicguide.com

November 7, 2009

Currency Swing Trading

Filed under: forex education — Tags: , , — admin @ 7:34 am

Definition

Currency swing trading is aimed at catching reactions within the major trend (either bullish or bearish) and seeks to take advantage of trades that can last anywhere from a couple of days, to around a week in duration.
In this respect it is a short term form of trading and is the only short term forex trading method that works.

Currency Swing Trading v Currency Day Trading

Forex day trading is attempted by many forex traders but simply doesn’t work, because the data is not valid and volatility can and does take prices anywhere in a day. Support and resistance is therefore not valid and day traders lose.
Swing traders are trading short term – but support and resistance are valid and make these moves tradable.

Spotting Swing Trades

Currency swing trading is normally carried out between support and resistance levels within the major trend. The forex trader will watch prices move into support or resistance and then take the opposite view and execute a trading signal in the opposite direction.

Confirming a Currency Swing Trade

As with any currency trading system, it is important not to simply take a position and hope that support and resistance levels hold – the trader should look confirmation. This means a waning and turn of price momentum, to confirm that support and resistance are likely to hold and then execute a trading signal.

Trading the Odds

By acting on confirmation in this way with a forex swing trading system, the trader is keeping the odds on their side and this is essential in any forex trading strategy, to win longer term.

Placing Stop Loss Orders

Stop levels are then placed behind the support or resistance level.

Taking Profits

Unlike forex trend following where a trader will place and trail a stop, a currency swing trader will operate using a target. The target will normally be just above support and resistance, that lies in the direction they are trading in and when prices approach the level, the trading profit is banked.

Volatility

Swing trading suits volatile, liquid currencies and the best ones to trade are:
Euro, Yen, British Pound, Swiss Franc, Canadian and Australian Dollar.
The euro and the yen are the two best currencies to focus on, as they offer great volatility and large volumes, which means forex brokers, offer tight spreads.
Any currency that does not have good liquidity, should not be swing traded. Liquidity is essential, for locking in profits quickly and just as importantly, limiting losses.

Commission Impact

In currency swing trading the cost of doing business adds up, as you are trading frequently and aiming for smaller profits, than you are in long term trend following. It is therefore essential to pick a broker that will offer you tight spreads (around 3 pips) to prevent the cost of doing business impacting on your profit.

Keep It Simple

Currency swing trading is very easy to learn.
All you need to use is support and resistance, a few momentum indicators and your all set. Resist the temptation to make your currency trading strategy to complicated, cram in to many indicators into your forex trading system and you will have too many elements to break and it will fail.
Swing trading systems should be kept simple, as simple systems tend to be more robust in the face of brutal market conditions than complicated ones.
All the best swing traders use simple systems and you should to.

Learn a Simple Method and apply it

If you keep your currency swing trading simple, you will understand the logic of it and it will be robust which, will mean that you will be able to apply it with discipline.
This is essential for currency trading success.
It should only take you a few days to learn a swing trading method and then you can look for profits in under an hour a day.
You don’t need to spend all day following the price action.
A good time to look for currency swing trading set ups, are at the end of the US trading day, when the NYSE closes.

Further info

Swing trading is ideal for novice traders and you can read why in our section swing trading for beginners for an idea of how to construct and apply a swing trading system for profits, we have given the basics of the way we do it in the section Swing trading in forex. Currency swing trading is a great way to build significant profits over time and is ideal for novice traders, as well as experienced pros.

Swing Trading for Beginners

Filed under: forex analysis — Tags: , , — admin @ 7:32 am

Swing trading for beginners is the subject of this section and we have already covered some basics of this already in currency swing trading so check it out.
Here we want to outline why swing trading is an ideal form of trading for novice traders and those who lack patience.
Many forex traders look at long term trend following in forex and think that it’s the most lucrative way to make money, after all the big currency trends last for weeks and months and if you can lock into and hold them, then you can make stellar profits.
The problem is:
Most traders are not mentally equipped to do this and cannot get the right mindset to trend follow. Swing trading can be just as profitable and for beginners in particular, swing trading is the better place to start.
Lets look at why.

Long Term Trend Following V Currency Swing Trading

The hardest form of trading to master not from the point of view of method – but from the point of view of adopting the right mindset is long term trend following as we have just stated.
If you look at any Forex chart, you will see Forex trends that last for months or even years yet, only a small minority of forex traders have the discipline and correct mindset to hold these trends and milk them for their full profit potential.
All traders want to make big gains but capturing them is the hardest bit.
If money is important to you, (as it is to most forex traders) then your emotions will be present and they will play havoc with your discipline, in you in your quest to hold these trends.
When counter trend moves come, they will reduce your open equity profits (sometimes by thousands of dollars quickly) and the losses in open equity can frighten you to take profits early.
Most traders get excited and nervous when they get a profit and the bigger the profit gets; the more tempted they are to bank it before it gets away. Most forex traders end up banking early and getting a small or marginal profit, when they could have had a huge profit.
That’s why swing trading for beginners is the best strategy to try first – it requires less discipline and is less demanding, in terms of your mindset and attitude.

Swing Trading for beginners Advantages

The aim is to catch reactions within major trends which normally last around a week and profits can be taken quickly.
Swing trading forex trends is exciting, there are plenty of trades and you know if you are right or wrong quickly – this makes it easy on the mind and psychologically better for most forex traders especially novice traders.
Swing trading is the best form of short term trading that works. Day trading sounds great in theory – but in practice doesn’t work as the data is not valid, whereas it is in swing trading.
We have all ready given the basics of what swing trading for beginners is and in this section why it is a great method to trade and can be very profitable part of your forex trading strategy.
Next we need to design a forex trading system for swing trading and this is simple:
You can get a swing trading system together in a few days – that’s robust, offers great risk to reward and is easy to understand, so you can execute your trading signals with confidence and discipline.
Now we are going to look at building a swing trading for beginners system – so click the link here swing trading in forex and let’s get started.

Swing Trading in Forex

Filed under: forex education — Tags: , , — admin @ 7:30 am

Building a Swing Trading System in 4 Simple Steps

If you do not know what swing trading in forex is, check out the background at currency swing trading and if you want to know why its one of the easiest forms of trading psychologically, check out our section swing trading for beginners

Here we are going to look at swing trading in forex from the standpoint of building a simple forex trading system, based on catching swing trades which is easy to understand, easy to apply and even better, can make big forex profits.
Here is your guide to a swing trading in forex with a system designed to make regular capital gains, whilst at the same time keeping losses to a minimum

Step 1 – Spot Support and Resistance

You need to use trend lines and spot areas of support or resistance to trade into.
Look for 3 tests or more – the more tests there are of course, the more valid and important the level will be.
Now you have spotted the opportunity, you need to time your trading signal and correct timing is crucial to success.

Step 2 – Trade with Price Momentum

Many traders simply like to go short into resistance or long into support, as it’s tested but this will never work.
If you do this, you are guessing or hoping the level will hold and the market will not reward you for this.
You don’t have the odds on your side and you will end up a loser.
With swing trading in forex (or any other method of trading for that matter) you need to trade the odds and get them in your favor and this means getting confirmation. You need to trade with confirmation of price momentum on your side BEFORE you execute your trading signal.
You therefore need to wait for a test of support or resistance.
Then Wait
Watch for the currency to turn away from support or resistance with accelerating price momentum and THEN execute trade.
You are trading with price momentum and the odds are in your favor.
Sure you won’t catch the turn exactly and you miss a bit of profit – but if you trade this way and grab 60 – 70% of the potential overall profit, you will make a lot of money and this is the aim of any forex trading system.

Which Indicators Are Best?

Try these:
The stochastic and the Relative Strength Index (RSI) as a good pair to start with.
We don’t have enough time to explain them in detail here – but these are superb momentum indicators.
There are many others – just pick and choose a few you like best but don’t use too many – up to 3 is fine.
When swing trading in forex, your system should be simple and robust – if you complicate it you will lose, as there will be too many elements to break.

Step 3 – Stop Reverse on Breakouts

For example, if you are trading into resistance that is at a market high, you may want to use a stop reverse upon a break.
Most major trends start from new market highs NOT market lows.
If prices break out go with the break.
The initial breakout of strong resistance, will see stops hit and new trend followers kick in and by taking the turn, you can go with this momentum.
Be careful – you should only do this into strong resistance that is considered valid by the market participants. This will ensure you don’t get caught trading false or weak breakout trades.

Step 4 Take Profits Too Soon

When swing trading in forex, your profits can disappear quickly, so you need to make sure that you get them in the bank, when the risk reward is in your favor – before recoil in price sets off a counter move.
Take your profits early and by this we mean.
BEFORE they test the next level of support and resistance.
Your aim is to “hit and run”, the closer the trade moves to a target the more chance you have of a reversal so get out early. You may miss some of the move – but as we said earlier (on getting into the trade) that doesn’t matter – your aim is 60 – 70% of the overall profit potential.
If you can do this regularly, you will make you a lot of money and ensure your forex trading strategy is successful over the long run.
Other points in relation to a successful swing trading method we covered earlier in  other sections – but their important so to repeat:
Only trade liquid, volatile major currencies and pick a broker that offers you tight 2 – 3 pip spreads, so they do not impact on your overall forex profits.

A Simple Way to Make Big Profits!

Swing trading in forex is simple to learn, easy to apply and requires far less discipline than longer term trend following. It’s also exciting, fun and ideal for either novice traders or seasoned market veterans – learn and enjoy forex swing trading today

Live The Dream!

Filed under: forex article — Tags: — admin @ 7:13 am

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If trading was that simple, then everyone would be traders and no one would work!
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95% of traders fail – who is to blame? Bad luck? The Markets?
No.
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Our Velocity Breakout Method (VBM) is the culmination of 22 years of trading experience and will help you get the odds on your side for bigger consistent profits – its makes us great profits and will work for you to.
It’s simple to understand, easy to apply, takes just 30 minutes a day – then you can get on with something else.

Why the VBM Works

The VBM is a system that shows you how to take advantage of shifts in price momentum and velocity, near important support and resistance points.
This gives you advance warning of whether support and resistance levels will hold or break, so you can position yourself for big profits.

Get Clear Confirmation Of Trend Changes In ADVANCE!

The big advantage of the VBM is there’s no guessing, predicting or hoping where prices may go – The VBM gives you CONFIRMATION.
The VBM gives you shifts in price velocity that CONFIRM, where prices are likely to go next, so you can trade with the odds firmly in your favor.
If you have the odds on your side, you can soon be trading for triple digit profits!

You Can Personalize It

The VBM is NOT a system that’s simply a number sequence and totally mechanical – it allows you to personalize it
It allows you to adjust the system to suit your individual trading personality

  • Use it to swing trade short term
  • Use it to catch long term trends
  • Use it to trade both
  • All trades are MANUALLY approved for total risk control

You’re in control and can fit it to your trading personality and so you can get used the system we will show you how to.
Sharpen Your Trading Skills with Our Support
While you getting used to the VBM method of trading, you can watch how we trade it.
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We provide daily, weekly, and Special Situations Report – so you can see EXACTLY how we trade the big profitable trends and get real time Forex education from the trenches.
You Will Learn the Following with Our Material

1 # Introduction to the VBM 2 X PDFS

70 pages of clear, concise material which explains the logic of our methods and how you can use them to build long term wealth in currency trading.
From the material you will discover the following:
Get advance warning of tops and bottoms in any time frame.
Use a  simple 5 step process to trade each currency.
Learn which currencies are about to produce mega moves with two little known indicators.
Find out how to place stops to minimize risk and increase rewards.
Learn How NOT to get stopped out to soon so you can ride the big trends.
Learn how a simple profit taking signal to bank more money.
Learn how to double up your profit potential on ANY trade with 3 simple tips
Why Following conventional wisdom causes losses for most traders.
Learn the key elements to turn you from a good trader into a millionaire trader.
How to get more profits from each Trade even though you are trading the same currency as many other traders.
How to construct a trading plan for bigger profits.

+ Much more !!!

You get a complete roadmap for BIGGER trading profits and it’s simple to understand and learn these tools even for novice traders!
You will however get further support to sharpen your trading skills

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We are traders and trade our system everyday and you will get all our thoughts on the best opportunities by getting access to our Forex Profits Update – FREE for two months
You get weekly and daily reports showing you the best opportunities as they shape up and how to capture them for big profit potential.

Frequently Asked Questions

Q: Do you trade and if so how long?

A: Yes unlike many people selling online, who are just marketing companies simply selling systems with simulated back tested systems – were traders. All our team has been trading for over 20 years and each day, we publish our view of the market so you can see how our system works.

Q: Can anyone learn to trade?

A: Of course. Everything about trading can be specifically learned. This was proved by Richard Dennis in 1983, when in just 14 days, he taught a group of people with no experience, to trade and they made him $100 million in 4 years. I am not saying you will earn millions but everyone has the potential to earn a lucrative income and enjoy currency trading success.

Q: If anyone can learn to trade why do 95% of traders fail?

A: Because most traders are naïve lazy or both. they won’t make the effort to learn the right forex education. Most simply buy an automatic system (with a worthless simulated track record) from a vendor and think they will get rich with no effort – that’s not real life. If you want to make money you need to do your homework, if you do you can make a lot of money.

Q: So no one else can give me success?

A: Correct – someone can lead you to success by teaching you but you are responsible for your own destiny and that’s not just true in forex trading, that’s true in life generally. We can give you all the support and the tools but you need to apply them, it’s as simple as that.

Q: There are lots of systems why would I Buy Yours?

A: Firstly, it’s logical, easy to understand, easy to apply and it works. Secondly, we are traders and we will help you with daily newsletters and a dedicated advisor to answer any queries you may have. Finally, it gives you a trading edge, by a unique blend of technical analysis and sentiment analysis to generate high odds trades.

Were traders and we walk the walk – most system vendors have never traded in their lives and simply talk the talk, they try and sell worthless back tested simulations – but we can all make money in hindsight doing that.

Q: How Long Does your system take to apply?

A: It requires you to look at set ups once or twice a day and that’s it. The system Should take you no more than 30 minutes daily and you can customize it, to take as much or as little risk as you wish.

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Q: What do you like about currency trading?

A: There is no other occupation that can give you such high rewards for 30 minutes work a day. Forex trading can be learned by anyone, is fun, exciting and can be very profitable. Anyone has the potential to be a trader from home and earn a very lucrative income and build long term wealth. Forex trading is the final frontier of the free market economy and allows traders to start with small stakes and in many instances build a life changing income - if you have the desire to succeed and a willingness to learn, your all set.

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Follow all the best opportunities with us! Each day we give you all the info you need to spot the BIG profitable trends in advance and make big profits. In addition to daily reports we round up all the action weekly to keep you one step ahead.

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Were traders ourselves and offer you unlimited email support – got a question? email us and we will be back to you within 24 hours. Were here to help, so email us any queries and we are delighted to assist you with any questions or queries you may have.
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Achieving Success

Filed under: forex article — Tags: , — admin @ 7:10 am

If you have read the other information we have provided on this site you will understand that – Forex trading is simple to learn, and anyone can acquire the skills to trade successfully.
So, the obvious question you may ask is why do 95% of traders lose money?
Many traders lose because they have poor methods, however many have good methods but still lose. The reason for this is – they lack the correct mindset to succeed.
If you want to win at Forex trading you need the right knowledge but you also need to have the right mindset, if you don’t you will lose.
Here we will take a look at how to adopt the correct mindset the millionaire traders have and you need too. If you can acquire them, you are on the way to achieving currency trading success.

1. Desire and Passion

If you want success in anything in life – including forex trading, then you must desire success. If you have  desire, then you’ll do what’s required to succeed. If you look at any of the legendary traders, they all had desire – and they loved what they did with a passion.
Currency trading success requires effort, as the rewards are immense – if you have the desire to succeed, you will acknowledge this and put in the required effort to succeed and make no mistake – the rewards for your effort can be life changing.
So if you have the desire and passion to succeed then chances are you will. Now lets look at how to channel this desire and passion, to become a successful Forex Trader.

2. Work Smart Not Hard

If you have read the Forex Education section – you will have read about “the turtles” – a group of people who had never traded before but learnt to do so in 14 days and went on to make millions.
They did this by working smart, NOT hard – and there is a big difference.
In many jobs you get paid for the effort you put in. When you trade FOREX you earn your reward simply for being right.
When you learn currency trading focus on working smart and acquiring the right knowledge and ignore all the Forex Myths which cause the bulk of traders to lose.
If you work smart, you can learn to trade in just a few weeks and in under an hour a day, you could soon be piling up big consistent profits.
The key to trading success is to have confidence in what you are doing – this leads to discipline and ultimate trading success. Let’s look at this in more detail, as most traders never acquire these traits and lose.

3. Confidence

You hear traders talk a lot about discipline being a key to success in currency trading – but you don’t hear them talk so much about confidence. However, confidence is a vital ingredient when implementing any successful forex trading strategy.
We are involved in Forex Education – we can give you the tools you need to be successful – BUT you need to learn them and have confidence in them YOURSELF.
To have confidence, you need to understand exactly how and why a forex trading strategy works and will continue to work.
This is essential when you hit a losing streak (all traders have them even the world’s best traders, so you need to be prepared for them) you need to have the confidence to stick with your forex trading system and trade it with discipline through losing periods, to ultimate long term trading success.
If you have confidence, you can acquire the key trait all traders need:

4. Discipline

Discipline is the key to forex trading success.
If you don’t trade your method with discipline – you don’t have a method at all!
It’s not as easy to trade in a disciplined fashion as many people believe, but if you take the time and trouble to learn a method and have confidence in it, then you will be able to trade in a disciplined fashion.
If you trade with discipline, you will be doing what 90% of traders don’t do and you will have a trading edge.
Discipline comes from all the points we have discussed earlier:
Desire, knowledge and confidence which give you the inner belief to follow your trading method and execute it in the correct manner for long term trading success.

Success From Within

People like ourselves can help you achieve currency trading success, by giving you the tools however, the ultimate person who will determine how much money you will make is you!
Fact: Anyone can learn forex trading and anyone can become a successful trader.
Forex trading is a challenge, its exciting, it’s fun and can offer you an income that other people only dream about so, Are you ready for a challenge and do you have the desire to succeed?
If so, welcome to the world’s most exciting business opportunity!

Forex Education

Filed under: forex education — Tags: , — admin @ 7:09 am

Learn Forex & Live The Dream

Everything about forex trading can be learned with the right forex education and here we are going to give you a great example of what can be achieved.
You don’t need to work hard to win at forex trading you just need to learn the RIGHT knowledge.
A perfect example of this is the “turtle” experiment, which is outlined below.
In just two weeks a group of 14 people from different walks of life were taught to trade financial markets, and these traders nicknamed the “turtles” became world famous.
The turtle experiment proved ANYONE can become a successful trader with the right education and everything about trading can be specifically learned.
Traders with no experience learned the tools to make millions in just two weeks, and they represented a variety of different people, from all walks of life including:

· An actor
· A security guard
· Two professional card players
· An auditor
· A boy who had just left school
· A woman who used to be an exchange clerk

They then went on to make annualized 70% returns!

Is Trading a Learned Skill, or is it all Down to innate Ability?

In 1984, Richard Dennis taught a Trend Following trading methodology to the group of students above, to prove anyone, no matter what their profession, could be taught the skills required to trade successfully.
Dennis was settling a debate with his friend and business partner William Eckhardt. Dennis believed anyone could learn to trade and Eckhardt disagreed – the “turtle” experiment was conducted to settle the debate.

The Experiment

The group of 14 traders he taught (the turtles) earned an average annual compound rate of return of 80% proving Dennis right and making him $100 million dollars!

What the Experiment Proved

The experiment with the “turtles” showed that anyone could indeed be taught to trade – all they had to do was learn, and follow a set of rules.

What you can learn from the Turtle experiment

Trading actually looks quite simple, yet few succeed and the fact is 95% of traders lose all their money.
The reason most traders fail is simply they cannot get the right mindset to succeed. The turtle trading experiment taught them the RIGHT MINDSET to trade successfully
The system they were taught was essentially simple, so simple in fact, that anyone could learn it and he combined this with giving the traders not just the system and rules but also the mindset to succeed and trade it with discipline.
Dennis realized that most traders can’t trade with discipline, their emotions get involved and they end up losing.

Why is Discipline so Important?

Quite simply, without the discipline to follow your method, you don’t have a method at all, and are doomed to failure – money management breaks down and losses inevitably follow.
Dennis taught them to have confidence in the system they were trading, and follow it rigidly to achieve success.

A Simple System + Discipline = Trading Success

Dennis knew that complicated trading methods are NOT likely to be more successful than simple ones – as a general rule, a simple trading system is more likely to be successful than a complicated one, as its more robust.
Simple systems are easier to understand as well – this meant the turtles had confidence in the system and could apply it with discipline.

So, What can we Learn from the Turtles?

Well, we know that anyone can learn to trade successfully and it can be do quickly.
We also know that simple systems applied with discipline and strict money management will work over time.
To become a successful trader you need a simple method that you can understand and have confidence in.
Just as confidence flows from understanding, discipline flows from confidence and it is the discipline to follow your method through losing periods which, is the key to long term success
You may not be as successful as the turtles but you can become a successful trader and you can make a lot of money.
Trading offers ANYONE the chance to build wealth – all you need to do is have the right mindset and learn the right knowledge.
Are you prepared for a challenge that could change your financial future forever? If you are, trading offers you the route to financial success.

Our Strategies

Filed under: forex learn — Tags: , — admin @ 7:07 am

Proven Strategies For Bigger Profit Potential

My Forex trading strategy is based upon 25 years of experience trading at the sharp end. I have made mistakes, lost money, learned some hard lessons and tried just about every system and indicator out there and this experience has helped me formulate the trading strategy I use today, with my team.

A Simple Way to Build Wealth

It’s simple to understand, takes under 30 minutes a day, needs no intra day monitoring and can be used for: Trend following, catching big trend reversals or used for swing trading.

Confidence & Discipline

Any trader can understand it, apply it and make big profits from it.
To follow any Forex trading system with discipline you need to have confidence in it and this means knowing why the method works and will continue to work.
This method will give you confidence, as when you see how it works you will realize – it can NEVER go out of date and will continue to be effective.

Personalize It

You can customize it to your own trading personality and make it high or low risk depending on your trading personality.

Trading the Odds

Our Forex trading strategies use standard indicators but generates a “trading edge” by the way we combine them TOGETHER – to generate trades with the best risk to reward and the best odds of success.

See How They Work RISK FREE!

If you want to know more about our strategies and news of a trade that’s shaping up RIGHT NOW and could make in excess of $10,000!

Increasing Profitability

Filed under: forex learn — Tags: , — admin @ 7:05 am

Making Money Fast In Forex Trading

If you are trading Forex and making mediocre or average gains and want to improve your overall profitability, then this section is for you.
The ways to improve profitability enclosed in this section are simple and they have worked for us and will work for you. These are simple yet powerful tips any Forex trader should consider.
A good place to start is with a timeless classic investment book – the Zurich Axioms by Max Gunther it’s a book any trader should read.
The wisdom is simple, timeless, unconventional, funny, exciting, and is one of the most inspiring investment books ever written.
The 12 major and 16 minor Zurich Axioms in the book are a set of principles, providing a philosophy, to incorporate in your Forex trading strategy to help you manage risk and increase profitability.
Several of the Axioms fly right in the face of accepted investment wisdom – however the Swiss investors who wrote them became very rich, while most investors who follow conventional wisdom do not and keep in mind 90% of speculators lose so being in the minority is not such a bad thing!

“Resist the allure of diversification”

Diversify your investments is accepted as a way to make money longer term and reduce risk – but all it does is dilute your potential profit and in many instances increase your chances of losing.
You will read a lot about risking 2% per trade and spreading your trades – but if you are like most Forex traders and trading a small account of under $10,000 you won’t make much risking $200.00!
The Zurich Axioms encourage you NOT to diversify for small gains, but to look for the big potential winners and risk more. This does not mean you are being rash – far from it, you are simply risking more on the high odds trades and ignoring the ones that don’t have good profit potential.
Many traders simply trade to much but in Forex trading you don’t get paid for how much effort you put in – you get your reward for being RIGHT with your trading signals – PERIOD.
So cut down the amount of trading signals you execute and only focus on the really good trades that have the best profit potential.
The Pareto 80 / 20 Rule
The above philosophy is related to famous the 80 / 20 rule or Pareto principle.
The rule states that 80% of your results come from 20% of your activities – and this is true in many areas of life in sales, business and trading Forex.
The rule postulates that by concentrating on the best investments, and ignoring the others, you can improve your profitability dramatically – by simply searching and acting on the 20% of “good trades” that yield the really big profits.
By only focusing on this 20%, you will see bigger gains. This is really a common sense rule, yet very few Forex traders know it or use it.
Most Forex traders are obsessed with trading to often, they think if their not in the market they will miss a move. Other traders try trading in ways that simply offer them no chance of success like Forex day trading.
I know traders that make triple digit annual gains and only trade once a month and I know other traders who trade all the time and lose.
Keep in mind – the aim of Forex trading is to make money nothing else matters, so don’t trade often and when you trade the best opportunities and risk more.

Accept and Enjoy Risk!

The major reason traders don’t win is they are so frightened of risk; they actually create it and lose. Does this mean you should take unnecessary risks, or act in a rash and cavalier manner?
No it doesn’t – but to make big gains you have to take calculated risks when the time is right and a good trade presents itself.
The Zurich Axioms show you how to confront risk in a positive way, manage it, and enjoy the challenge – the speculators who wrote the book enjoyed risk and the challenge of making money – If you don’t enjoy the challenge of risk, then you will lose.
Lets look at two of the Axiom’s on risk which compliment the one above on diversification – which tells us why most traders lose.

1. “Worry is not a sickness but a sign of health…If you are not worried, you are not risking enough”.

How often are you told only to risk what you can afford to lose in investing – when you know you should risk more?
You then see the gains you could have made – but you didn’t have the conviction to go for the trade and then you were left wondering about what might have been?

2. “Always play for meaningful stakes..if an amount is so small that its loss won’t make any significant difference, then it isn’t likely to bring any significant gains either”.
If you don’t risk much, you won’t gain much as we have already stated. If however you load up the high odds trades then you will increase your profitability.
If you have a sound Forex Trading strategy you have confidence in then the above tips are common sense and will increase your FX profits.

Risk Reward & You

The major mistake most Forex Traders make is they think that they can restrict the risk of Forex trading to minimal levels and still win – this is simply not true.
If you try and restrict risk to much by placing stops to close you will simply guarantee you will be stopped out by normal market volatility. It may look like it’s less risky but its guaranteeing you will lose so it’s actually very risky!
Volatility and leverage creates both risk and opportunity in online currency trading, you need accept this risk and then spot the trades that offer the best odds of success and go for them.
If you do, you will actually decrease your risk and increase your profits dramatically.
If of course you don’t like taking risks then you shouldn’t trade currencies as you will lose.

Forex Trend Following

Filed under: forex analysis — Tags: — admin @ 7:04 am

Big Profits are Made Trend Following the Currencies

How To Get Your Share!

If you are a Forex Trader than you need to liquidate losing trades quickly and run profitable trades to pile up big long term profits. Many traders don’t know how to do this and this section will give you some basics to follow and advantages and disadvantages of various methods.
Forex trend following can be done in various different ways and here we will examine the merits of each and how they can bring you currency trading success.

Day Trading

More novice traders try to catch trends in daily time frames than any other method however, this method of trend following is doomed to failure.
Fact: The data within a day is totally unreliable and support and resistance levels are meaningless. Volatility can and does, take prices anywhere and all daily movements are random.
You can’t get the odds in your favour and you can’t win – PERIOD
There are countless millions of traders, trading trillions of dollars daily and it’s laughable to think that you can trade in such a short term time frame and win.
So why do so many traders try it?
Well, it’s a good story and many vendors appeal to the greed and naivety of investors and try and sell them forex trading systems or courses, but they don’t trade them! They make money from selling their product – they win by selling their product and the trader loses in the market.
Don’t fall for the myth of Forex day trading!
Advantages: None!
Keep in mind: You are guaranteed to lose, as you can never get the odds in your favour.

Swing Trading

Swing trading is perhaps the easiest way for novice forex traders to learn a Forex trading system. The aim is to catch reactions in major trends which normally last a few days to a week.
Swing trading has the advantage of there are plenty of trades to go for and you know if you are right or wrong quickly. Forex swing trading is easy psychologically, as you have obvious stop levels, small loses and profits are generally banked quickly.
The key to successful swing trading is to spot valid areas of support and resistance and then use momentum indicators, to execute trading signals in line with shifts in price momentum. For example, traders would wait for a test of support and for price momentum to turn up away from support and then trade to the long side.
The key with swing trading is always to CONFIRM With momentum indicators – before executing a trading signal.
EVER simply hope a level will hold or try and predict as you will lose.
Advantages: Easy to learn, its fun, there are lots of trades, it can be very profitable and it’s easy psychologically.
Keep In Mind: Make sure you don’t just guess or hope with swing trading and you use momentum indicators to confirm your trading signals.

Long Term Trend Following

The most lucrative form of trading and also the toughest way to trade.
If you look at Forex trends you will very often see trends that last for months or even years yet, very few traders have the mental discipline to hold these trends and milk them for all they’re worth.
Forex trend following requires patience, to wait for and enter these trends when the risk/ reward is at its best and then have the mental discipline to follow them.
Why is it so hard to do?
Because most traders are not mentally prepared to accept big gains.
The above may sound odd – as surely all forex want big gains?
The answer is yes they do, but accepting them is another matter.
The problem is – if money is important to you (as it is to most traders) then counter trend moves, which eat into your open equity, can tempt you to bank a profit early.
Most traders get excited when they get a profit and the bigger it gets the more tempted they are to take it, before it gets away. As volatility eats into open equity the temptation becomes too great for most traders and they bank early.
They end up taking an average profit or mediocre one, when they could have had a huge one.
If you are long term trend following you need the courage of your conviction and tremendous mental discipline to ignore counter trend swings and keep your eyes on the bigger prize.
Forex trend following is tough mentally but the rewards are immense, if it is done correctly and you have the right mindset.
Advantages: You can make huge profits!
Keep in mind: You need to be patient when timing entry levels and you also need to be able to psychologically handle short term severe dips in open equity. You need to keep your eyes focused on the end prize – not the short term swings against you. It’s not easy to do but very lucrative.

New Trends & Turning Points

It is the dream of most traders to be able to catch important market tops and bottoms.
Catching these turning points offers low risk and high rewards, as you are in at the stat of a new trend and these turning points normally see profits piled up quickly.
Catching turning points is satisfying, very profitable and its not has hard to do as many traders think.
If you use sentiment tools such as % bullish and Net Traders Positions, you will with a little practice, be able to spot these turning points forming. Then you can time entry with on your forex charts.
The key is to WAIT for clear confirmation of a trend change – before getting on board.
These moves don’t come around very often but if you look out for them, they will give you some great profits coupled with low risk.
Advantages: Great risk to reward, it’s a lot easier to do than many traders think and it gets you in at the start of big trends which, normally see big profits emerge quickly.
Keep in mind: You need to be careful in timing your entry and enter at the right time furthermore; these trades only come around a few times a year, so you have to be patient and wait for the right opportunities

Final words

You can make money with all the above methods of trend following (except day trading) and the method of Forex trend following you choose is down to personal preference.
You can focus on one of the above – or combine all of them together in your forex trading strategy and seek big profits in the worlds most lucrative and exciting investment market – Good luck!

Forex Charts

Filed under: forex chart — Tags: — admin @ 7:02 am

5 Simple Steps To Big Profit Potential

If you have read the section on Technical Analysis then you will understand that you can build substantial long term profits – but you need to use Forex charts correctly.
Using Forex charts is an art not a science.
Here we will outline how to use for Forex charts in the correct way and the basics for building a successful Forex Trading system.

1. Keep It Simple

Many traders think that the more effort they put into their Forex trading strategy and the more complicated it is – the more they will make in terms of profit.
The above view is totally incorrect.
It’s a well known fact that a simple Forex trading system with just a few indicators, is more likely to be successful than one that is to complicated.

Why?

Quite simply, a simple system will be more robust in the face of ever changing market conditions, as there are fewer elements to break.

2. Trade Valid Data

You need to trade data that is valid and can be used on your Forex charts to increase your odds of success.
The biggest error a forex trader can make is to try Forex day trading – it doesn’t work as the data is to0 short to be reliable.
Forex day trading causes traders to lose because volatility in short term time frames is totally random and can and does take prices anywhere. Support and resistance levels are meaningless and you cannot trade them.
Stick to either long term trend following or swing trading depending on which suits your personality.

3. Support, Resistance & Breakouts

All successful traders use support and resistance levels to enter and exit the market.
While traders like to buy into support and sell into resistance i.e. “buy low sell high”,
most traders ignore a strategy that can be even more profitable which is buying a break of resistance.
If you want to make money in Forex trading you need to buy these beaks.
Traders like to “buy low and sell high” when they miss a breakout, they wait for the pullback to get in at a “better price” but the price doesn’t pullback and they miss the move.
The fact is that most of the biggest currency trends start from new market highs NOT market lows.
If you want to catch the really big trends then remember that – “buy high sell higher” is very profitable – although its uncomfortable psychologically buying a new market high – it is a proven high profit Forex Trading strategy.

4. Use Momentum Indicators

If you want to win at forex trading you need to learn to trade with price momentum.
One of the biggest errors traders make is to think that they can predict Forex price direction. If you try predicting forex prices, you are hoping or guessing and that is not the way to make money in any business – especially forex trading.
Rather than relying on hope – trade with price momentum.
For example, if you wanted to buy into a support level – you would wait for a test of the support and price momentum to accelerate away from support and enter with momentum. This means you are trading with the odds in your favor and not relying on hope.
All the worlds top traders use price momentum as part of their forex trading strategy and you need to as well.

5. Be Objective Not Subjective

When using indicators to execute trading signals make sure you are as objective as possible. Avoid indicators that involve subjectivity and stick with ones that are objective.
For example, subjective indicators such as cycles, Elliot Waves, Seasonals etc and use indicators that fit objective rules. This will help you stay disciplined and Keep your emotions out of your trading.

6. Back Testing & Curve Fitting

Many traders like to test their systems on back data and they look for perfection and end up “curve fitting” which sees the system profitable in back testing but lose in real time trading.

So what is curve fitting?

Curve fitting involves tweaking rules and parameters so that they fit the data, making the trading system profitable.

A good analogy is:

Shooting at a barn door, a then afterwards drawing a bulls-eye around every shot!
In forex trading, traders try and get or improve profitability by tweaking the system rules to fit the data. They add unique rules and parameters, for different market conditions and different currencies.
Of course, the forex market will move differently in the future and you can’t bend going forward so, the system collapses.
If a system is based on sound logic, it should work regardless of the market conditions or the currencies traded and should contain very few rules or parameters.
Don’t try and bend the rules of any trading system to fit the data – it will not work going forward.

Obey the Rules of the Market

The market is all powerful and you need to obey its rules to enjoy success.
It’s similar to being the captain of a ship – your charts can help you navigate the ocean and earn a living but you need to be careful! If you use your forex charts incorrectly and break the rules you will lose.
Respect the Forex market, use forex charts in the right way and you can pile up big long term profits.

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