Forex trading Tips

Many Oof The Forexx trading products sold over the Internet claim you don't need any experience in the Forex market to earn money. Don't be fooled. They're simply trying to make a quick and easy buck of their product from the unwary.
To succeed in the Forex market, requires more than the computer software they promise will mechanically buy and sell currency contracts for you 24 hours a day, 7 days a week.
Place that hyped up Forex advertisement aside and pull yourself back into reality. Do you really think earning money in the markets is obtainable without first obtaining an education? If it were as effortless as these Forex advertisers say it is, then why haven't you heard your friends talk about it.
Did you get the occupation or the position you have now without any education or training? Why would you think it would be any different for being successful in the Forex market?
You don't need to go back to college for a finance degree, but the minimum you can do is borrow a decent book on the fundamental principles of Forex trading. It will provide you some practical knowledge to at least judge those Forex trading products with a little intelligence.
Forex trading isn't a game. There's money to be earned but there are also risks of losing your starting capital that these Forex trading advertisements barely note

FOREX-Dollar gains as risk trade takes a pause

* High-yielders slip as global, U.S. stock markets mixed
* U.S. new home sales, durable goods orders rose in July
* China plans to curb investment hit global growth hopes
* German Ifo sentiment poll hits highest in nearly 1 year (Recasts; updates prices, adds comment, details, changes byline)
By Steven C. Johnson
NEW YORK, Aug 26 (Reuters) - The U.S. dollar rose on Wednesday as news that China would act to restrict redundant investments underscored concerns about a global recovery and tempered the positive impact of data showing a jump in new U.S. home sales.
Reports that China intends to curb excessive investment in a range of industries "hurts the strong global growth outlook and is one of the things moving the dollar today," said Chuck Butler, president of Everbank World Markets in St. Louis. For more, please see [ID:nPEK160728]
Investors tend to buy the dollar and yen as safe havens or unwind trades in higher-yielding assets financed with the U.S. and Japanese currencies when recovery optimism fades.
Two reports offered some encouragement about the health of the U.S. economy. A rise of 9.6 percent in new homes sales in July was the fastest pace in nearly a year. [ID:nN26261432]
U.S. durable goods orders also rose in July, but a key measure of business demand -- non-defense capital goods, excluding aircraft -- fell, reminding investors the economy still faces huge challenges. [ID:nN26259327]
Analysts also said traders were using the mixed signals global growth signals to lock in profits booked earlier this week as foreign currencies rose against the dollar.
The euro was last down 0.5 percent at $1.4230 EUR= and 0.4 percent at 134.12 yen EURJPY=.
The dollar edged up 0.1 percent to 94.19 yen JPY=. Sterling fell to a six-week low against the dollar and was last off 0.8 percent to $1.6215 GBP=. The euro hit a 2-1/2-month high against the pound above 88 pence EURGBP=.
High-yielding and commodity-linked currencies such as the Australian dollar also fell after European equities snapped four straight sessions of gains led by commodity stocks.
Some analysts said the recent trend that's seen the dollar weaken on good economic news may be starting to fade.
"The new home sales data was good, there's no doubt about it. The question is, are signs that the U.S. economy is starting to bottom good for the U.S. dollar or for other currencies," said David Watt, senior strategist at RBC Capital Markets in Toronto.

USD Technical Forex Analysis for Forex Traders

The USD continued to consolidate today reaching highs against the majors in early New York but failing to advance into key bullish levels. The majors recovered after the London fix rising off lows and in some pairs flirting with highs into the close. Today's PPI and Housing Data was benign helping to underpin the possibility that inflation is not a problem and housing is beginning to recover but more data will be needed according to most analysts. Aggressive traders are suggesting that a positive response for Wall Street today signals that investor confidence is beginning to turn positive from neutral or negative.
Should that be the case moving forward the "flight-to-quality" buying of USD will likely end and underlying fundamentals will probably begin to weaken the USD into the end of month at least. Traders are suggesting that the possibility of China reducing its holdings of US debt and curtailing their purchase of US debt moving forward works against the USD near-term; time will tell if a larger fall in the USD is likely but for now sentiment is turning neutral for the Greenback. GBP fell to a low print at 1.3963 missing large stops said to be resting under the 1.3940 area and the rate recovers t the 1.4050 area into the close. Lifting EURO with it, EURO has regained the 1.3000 handle and is pressuring highs at 1.3034 into the close with a positive tone noted by traders. Overnight action will likely see a test of the weekly highs at 1.3070 area and traders note stops from large shorts likely in the 1.3080 and above areas. A push to 1.3120 will likely result in short-covering adding to the underlying positive tone; traders note RHS interest in both EURO and GBP into the London fix.
USD/CHF is flirting with lows on the day at 1.1811 and a late break would likely trigger close-in stops into the start of Asia tonight; traders note that volumes have remained subdued as large players have already likely sold into the rally this week and are sitting tight leaving only small time frame traders on the bid. USD/CAD has failed at the 1.2700 handle into the close after making highs at 1.2766 early; the rate is still within striking distance of the stops said to be resting in the 1.2660 area and 1.2620 area. The only rate to hold gains on the day of any size is USD/JPY trading to a high print at 98.98 before dropping back to the 98.40 area late in the day. Exporters remain on the offer above the 98.50 area and the failure to score the 99.0 handle today is likely a psychological negative to the bulls.
Expect stops to be rolled-up closer to the 98.10 area overnight increasing the possibility of a stop-driven long-liquidation break. With the strong bullish sentiment combined with a failure at the recent highs a one-way liquidating break is increasingly likely. Look for the USD to continue in two-way trade with a weaker bias. Tomorrow's data will likely be overshadowed by the FOMC announcement and the BOJ rate decision overnight.
Today's US Dollar Trading

Some pairs reverse to flirt with highs
Large stops still out of range
Overnight Preview
Look for USD to remain two-way
Likely quiet ahead of CB rate announcements
Looking Ahead to WednesdayAll times Eastern (-4 GMT)
8:30am USD Core CPI m/m
8:30am USD CPI m/m
8:30am USD Current Account
10:30am USD Crude Oil Inventories
2:15pm USD FOMC Statement
2:15pm USD Federal Funds Rate

Trading Forex for Beginners

What is FOREX?
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or "FX" or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of over $3 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually equates to more than three times the total amount of the stocks and futures markets combined! Forex rocks!
What is traded on the Foreign Exchange market?
The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or a dealer, and are traded in pairs; for example the euro and the US dollar (EUR/USD) or the British pound and the US dollar (GBP/USD).
Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.
Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Until the late 1990's, only the "big guys" could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us "little guys". However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us.
All you need to get started is a computer, a high-speed Internet connection, and knowledge of how to trade

Make Money Trading Forex

"A guide to getting started trading forex"

INTRODUCTION

There are various methods to invest your hard earned money without having to rely on mutual fund portfolios, stocks or banks. With today’s market headed in the wrong direction, it’s just simply not safe or viable to invest your money in the stock market unless your a seasoned and experienced investor. So where should you invest your money? This article will explain how trading foreign currency can be a very profitable and satisfying investing experience. This article will detail the steps required in teaching yourself how to trade foreign currencies, what online resources are available for you to reference, which online brokers to open an account with, what kind of account to open and what kind of experience is required. After reading this article, you should have a better understanding of how you can use the foreign currencies market to invest your money.STEP#1: Learning To Trade Foreign Currency

All it takes to trade currency is some spare time to teach yourself the basics and the motivation to be a successful investor. There are a vast amount of online resources which help teach you how to trade foreign currency. Learning what you’re getting yourself into is absolutely vital. All you really need to get started is a computer and a high speed internet connection,.

The best online resource I’ve been able to find that virtually breaks down every aspect of currency trading into easy and user friendly modules is www.babypips.com. This site breaks down currency trading perfectly and structures its offerings into different classifications, such as kindergarten (Beginner) to University (Expert). Following the www.babypips.com forex education program will give you all the necessary information and education you need to dip your feet into the forex world. The course itself is quite lengthy and requires an initial investment of your time. I can honestly say from experience, that this investment was one of my best. I took the time to read over the course and familiarize myself with the currency market. The foreign exchange market trades 1 trillion dollars worth of currency everyday!! Learning how to take advantage of the currency market is a great investment opportunity Taking this course will also distinguish if this investment method is right for you or not.

Narrow Range Breakout Forex Trading System

Narrow Range Breakout Forex Trading System
Small losses and BIG WINS are key to this system's success
You will learn a low risk, high probability Forex Trading System that finds huge wins while risking very little - the KEY to its success

There are many ways to trade the Foreign currency market. The key behind any profitable forex trading system is having small losses, risking no more than 2-3% of your account on any given trade and to focus on methods that find wins of 1.5 to 2X bigger than you are risking.

Van Tharp in his excellent "Trade Your Way to Financial Freedom" book defines risk in terms of R. If you are risking 10 pips than that counts as 1R. You should have an expectation that if trade works it will return 15 pips-20pips+ which is 1.5R to 2R.

Thinking in terms of your risk vs reward in such ways will dramatically help you as a trader!

It will force you to FORGET about sub optimal trades, the kind of trades where you are likely to only make as much or less than you are risking. Taking such sub optimal trades is a recipe for disaster and very likely to mean failure for you and your trading career!

So now that you have a basic understanding of always risking a smaller amount than your profit targets or trailing stops will give you in profits when the trade works we can discuss an excellent trade method that is a perfect example of such a concept.

It's called Narrow Range Breakout system. Volatility is EASIER to predict than price levels. The markets all have periods of HIGH volatility followed by periods of LOW volatility! Getting into a trade during a period of LOW volatility is higly profitable because soon after the market returns to a period of high volatility and thus when wrong you have super tiny losses and when the trades work you have huge profits.

We teach our traders to use the Chandelier trailing stop as a way to stay in trends as long as possible and catch as many pips in the move as possible. The key with any trailing stop or exit technique is to give the trade SOME room to wiggle yet to not give back too much of the profit when the move is over. The chandelier trailing stop moves up when the market moves up and it also moves up when the market goes sideways and volatility decreases. On big trend moves we've found it catches 75 to 90% of the move and will usually keep us in the trend until its over. Most Forex trading software platforms have this tool as does our TopGun Software. This is the tool we will use for our exit method for this system. I'm discussing it FIRST because it uses volatility as a means of stop placement. Because this system I'm about to describe gets INTO the trade during low volatility the stop is SUPER TIGHT and thus when wrong you lose such a tiny amount of pips and dollars! The wins of this system are often 3 to 10X bigger than this tiny initial risk. Van Tharp would be very proud of this system because it obeys his key rule of keeping super small losses and it obeys his second rule of shooting for wins that are MANY TIMES BIGGER than initial risk!

Entry Method - This system is very simple and can be applies to different time frame charts - Daily, 240 minute, 60 minute and even 30 minute works in the Forex markets.

Step One Look for Narrow Ranges - We define a narrow range as one where the High-Low is less than either the 4 previous bars or 7 previous bars. If the range is less than the 4 previous bars it also must meet one additional rule which is it has to be an inside bar. An inside bar is just that, its INSIDE of previous bar. This means the low is GREATER than previous bars low and the high is LESS than previous bar's high!

The above is the SETUP phase of this system.

Step Two Wait for breakouts UP or down outside of the Narrow Range Bar's High or Low. This is super simple, simply buy the breakout of the narrow range bar's high and sell the break down of the narrow range bar's low.

Then employ the trailing stop. This system is just this simple!

Here's a perfect example of one our NR Breakout Visual Basic script found in real time. It labels the chart with a NR7 showing that the previous 4 hour bar (240 min bar) was smaller in range (high-low) than the previous 7 bars. You can see it took three attempts at this trade, the first two with small 10 pip losses and then bought again at 132.40 and rode it up and exited when Chandelier Trailing Stop was hit at 133.29 for a win of 84 pips after the spread and 64 pips net for the day after the two losses!

This trading system works due to the low volatility of our chandelier trailing stop, ie it risks very little. This trade also has a decent winning percentage of usually over 50% and often 60% and higher! So when it fails you lose very little, often 8 to 12 pips. And when it works you make usually 30-50 pips and sometimes 100 to 150 pips! Also keep in mind that even on days where it works only 1 out of 3 times as in this example the wins are usually so big it doesn't matter. It's the true beauty of this trading system. One win can wipe out 3 to 6 losses in one felll swoop.

What is forex Trading

Foreign Exchange Market, or Forex as it is commonly called, is an international exchange market to buy and sell different currencies from around the world. An investor has the ability to buy and sell these curencies in order to create gains from small movements in the value of one currency over another. The forex market is open from Monday at 0:00 GMT until Friday at 10:00 GMT. For this reason Forex traders are not limited to the general time constraints of the New York Stock Exchange or NASDAQ.This versatility attracts many investors to become Forex traders. The liquidity of the Foreign Exchange Market is also very attractive for the Forex investor as trades range from 1 to 1.5 trillion dollars on a daily basis. These massive amounts of trades make it extremely difficult for any one trader to affect the market.Foreign Exchange Trading is simply the purchase and sales of currency based on the strength of the currency and the fluctuation in the value of that currency. For example, if one were to invest $1,000 against the British pound at 1.7999 with a 1% margin and anticipate the exchange rate to climb. If that occurs and you close the exchange rate at 1.8050 you would earn roughly $400. Forex is giving you a 40% return on your investment.Forex offers the possibility of huge profits in relatively short periods of time. The stock exchange is very different in that positions are generally maintained over a longer period of time. Although there are day traders, Forex traders have much shorter hold times on positions. Similar to the stock market marginal accounts can be obtained in the Foreign Exchange Market as well.Forex marginal accounts are very engaging as they allow Forex traders to take large positions without having to make a large deposit. In many circumstances one can fund a marginal account with .05% the necessary funds. In other words, $500 would allow a $100,000 position. In order to trade Forex effectively and profitably, one must have some type of method to follow. There are two methods used in determining what Foreign Exchange trades one should make. There are two methods, fundamental Forex analysis, and technical Forex analysis.Technical analysis is the most commonly used practice and uses the assumption that the changes that occur in the Foreign Exchange Market happened for a reason and are accurate. The belief is that if a currency has been trading towards a high then that currency will mostly continue towards that high with the adverse being true as well.
The technical Forex view does not try to make long term predictions about the market but instead simply tries to take advantage of what has already been seen in the past.The fundamental Forex method takes into account all aspects of the country in which the currency is traded. Things such as the economy, the countries prime interest rates, war, poverty level, and other factors are taken into account. If there is a sharp rise in the prime interest rate a Forex trader may take a position based on that information.Online Forex trading has the potential of being extremely lucrative. One can learn to trade by creating an online Forex Account and begin by using a learning account without real funds. This will help you to understand the Forex trading process and how currencies are affected by different things that are
happening on a global scale.

Learn to Avoid Emotions in Currency Trading

One of the most crucial yet overlooked elements of successful trading is maintaining a healthy psychological outlook. At the end of the day, traders who are unable to cope with the stress of the market fluctuations will not withstand the test of time. No matter how skilled they may be at the scientific elements of trading.
A good trader needs to be emotionally detached. Trading decisions must be independent of fear and greed. One of the attributes of a good trader is that he/she accepts losing and makes decisions based on an intellectual level. Traders who are emotionally involved in trading make substantial errors. They tend to whimsically change their strategies after a few losing trades or become carefree after a few winning trades.
Good traders are emotionally balanced in their approach. In the midst of a losing streak, they try to take a break. They don't allow fear or greed to dominate their strategy.� You cannot win every trade. Even very successful traders go through stretches of losing trades but they are emotionally strong enough to cope with it. You must be psychologically strong enough to cope with losses.
If you are going through a bad stretch in your trading, you should think of taking a break. Take a few days off from watching the markets. Try to clear your mind. If you keep on trading relentlessly during tough market conditions, it can breed greater losses and ruin your psychological confidence.
Make no mistake about it, no matter how much you study, practice and trade; there will be stretches of losing trades. You cannot always win. The key is to make losing trades small enough in order to live to trade another day. By using good money management rules, you can overcome a lot of bad luck in your trading. Never ever put more than 2% of your equity at risk in a single trade.
You need to control your emotions in order to become a master trader. One constant is the human emotional behavior despite many new methods that have been introduced to traders. After all, markets are just people selling and buying. Markets are only a reflection of investor's emotions.
Fear of losing money makes the market prices to head lower as people afraid of losing their money start to sell in a panic. Fear of losing a good opportunity makes the market prices to go up as greedy people buy trying to catch a free ride.
You need to learn technical analysis as a forex trader. Technical analysis will make you understand how to capture profits from movements in the price. You should understand how price action takes place. Develop a trading system that is ruled based. Don't make decisions based on emotions.
The best method to overcome emotions in trading is to depend on a forex trading system that is mechanical in nature. There are clear cut rules for entering and exiting a position. Use those rules consistently. There maybe a few losses but with a good forex trading system, you can be sure the number of winner will be greater.
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