.:Interletssa:.

Here we are going to look at currency trading basics and the most basic question you need to answer before you start trading - If you don’t know the answer you will get wiped out and join the 95% of losers, answer it correctly and you could win and win big so here is your question:

My Trading Edge is (defined) …. To elaborate

Why is it you will win what’s your edge over the 95% of traders that lose. Think about it carefully and while you are, the correct answer is NOT.

- I have bought a forex robot from a vendor with a simulated track record
- I trade news stories and expert opinion
- I trade the supply and demand fundamentals
- I use a day trading system
- I Employ forex scalping methods
- I use scientific theories to predict market movement
- I am clever and have a complicated trading system
- I like to buy low and sell high

All the above are statements that will see you lose and do not constitute a trading edge and are all commonly stated by novice or naïve traders.

A trading edge has to be something that is based on correct logic about market movement which, you have confidence in. This then enables you to execute your forex trading strategy with discipline for long term success.

Trading success is something that comes from within and while all traders have different trading edges, they all have certain things in common which are:

- They have avoided all the forex myths (and there are loads of them)

- They have learned forex is an odds game not a game of science

- They know a method is not enough and that confidence leads to

- Discipline the single most important variable of trading to keep emotions at bay

- They know its not the news or fundamentals that are important its how their perceived that determines the course of events

- They have the ability to run profits and cut losses and have a money management strategy

- They know forex systems need to be simple not complicated to succeed

All the above come together and from this comes their “trading edge” the single variable that they have which will lead them to long term success.

The only aim of trading is to make money - its how success is judged.

Forex trading has a lot in common with this poker quote

“See, in my world - the world of high-stakes gin and poker - we play for cold, hard cash. It’s all business, pure and simple. Anyone who thinks card playing is a ‘game’ - I’ll show you a loser. Money… M-O-N-E-Y. That’s how you measure success. One dollar at a time. One chip at a time. That’s how you keep score.”

Stu Unger

Know Your Edge and Win Big

Stu knows what the aim of the game is and he also knows his edge over other players and you must as well. It’s one of the critical currency trading basics and if you do know it and can use it to your advantage, you could end up in the elite 5% of winners, who make the big consistent profits.

Tags : Currency Trading, Currency Trading Basics, Currency Trading.forex Education, Learn Currency Trading, Learn Forex Trading

When you are looking at forex trading methods you have choice between following an automated trading system or trading manually to set of rules so which is best lets take a look…

Forex Robots

Have rules build into them and there simply plug and play time efficient and require very little trading knowledge.

There are some good ones about that are sold online but most (about 99%) don’t work and the track records are simply made up and simulated in hindsight. Most carry the disclaimer below, look out for it and forget it:

“CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

There are some that have been traded and tested and have real time track records but be careful - you still have to follow it with discipline and for this, you need to know how and why it works long term.

You need to be confident enough in its logic, to stick with it through periods of drawdown, if you dont understand how and why it works and have confidence in its ability to win longer term, your discipline will go and you have no system.

There are even some free ones that make money. I have written frequently on Richard Donchian’s 4 week rule and this incredibly powerful but simple system, is free! Look it up in our other articles.

Trading an automated trading system ( if you find the right one) is time efficient and easy - but you must have a disciplined and patient personality, to keep executing the signals in line with the rules and this is hard, when you had a losing period!

Manual Trading

There is a right way and a wrong way when trading manually - lets start with the wrong way.

The “shoot from the hip” news and story trader - He simply trades on a whim and of course as news is instantly discounted and his emotions are to the fore he losses.

The other trader is the trader who likes to do every trade manually but is still guided by rigid rules in terms of, executing his trading signal and money management.

I am this sort of trader and it suits me as I am involved and although I use rules I can pick and choose the best trades in terms of risk reward - this trading method is obviously my personal choice and each trader will know which method is right fof them.

You can make money with forex robots, just choose wisely and be prepared to have confidence and discipline in the system you follow. As a manual trader you still need discipline but it probably suits the trader who enjoys a challenge.

Which ever trading method you choose, remember to have a disciplined approach and make sure you employ rigid money management criteria, to lead you to long term currency trading success.

Tags : Currency Trading, Currency Trading Basics, Currency Trading.forex Education, Learn Currency Trading, Learn Forex Trading

There are numerous systems that will tell you that you can follow the signals they generate and make similar gains to the track records they show. There is a problem with most of them and that’s curve fitting which, means most forex robots lose - lets take a look at it.

Curve fitting is when a vendor simply runs system rules across back data and bends the rules to make a profit.

It’s of course easy to make a profit in hindsight, as you know what happened and we can all make money if we know the prices in advance however, it’s much harder going forward not knowing them!

Most systems worth their salt, will have been traded and have a real time track record presented with them. This doesn’t mean the system will win in future, as past performance never guarantees future results - but it at least it gives you confidence the system is on soundly based logic.

If you see any forex robot that has track record that looks good, look for the disclaimer below and if you see it pass it by - it’s unlikely to make you money and about 99% you see will have it - here it is:

“CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

Many traders simply don’t bother reading the above, or ignore it totally.

Keep in mind if you are putting your equity in the hands of a forex robot or automated trading system, surely it’s a good idea to at least make sure someone has traded it?

The problem is most vendors who sell these robots curve fit them and as no two portions of data ever replicate themselves exactly, there doomed to lose in the real brutal world of trading.

Forget hyped copy and simulated track records and look for one with a real time track record.

Once you have found one, make sure you know how it works and that you have confidence in its ability to make money. If you don’t know how it works and have confidence, you won’t have the discipline to follow your chosen forex trading system with discipline and without the discipline to follow your system, you don’t have one!

There are some good systems out there will real time track records (or at least independently tracked ones) which can and do make money. You’re probably looking in the price range of $1 - $10,000 for a decent one and they will pay for themselves many times over if you do your homework on them.

Trading forex on autopilot is great idea in theory - but beware of the curve fitted, simulated track record ones that are cheap with track records that look to good to be true - they are. Be realistic, be sensible and take your time choosing the right forex robot for you.

Tags : Best Trading System, Currency Trading, Currency Trading System, Forex Trading System, Mechanical Forex Trading System

This article is about forex trading for beginners and has 3 questions you need to ask yourself before you trade - if you are confident in the answers then you could enjoy forex trading success on the other hand, get any wrong and you will join the 95% who lose…

Forex trading can give you a great income and with many people it becomes a life changing income however, this is the few NOT the majority.

You can enter this elite group, with desire, the right information and the right mindset in fact anyone can but you must understand why the questions below are so important and answer them honestly.

The first question you need to ask yourself is:

1. Have you learned EXACTLY how and why your system will work?

This may sound obvious but most traders don’t even consider it.

Most novice traders buy a forex robot from the net and think a few hundred bucks spent will allow them to make profits automatically. Most of these systems are junk and haven’t even been traded and come with simulated track records and a lot of hyped copy. If you’re in this category, say good bye to your equity.

Other traders just want to shoot from the hip and trade whims and news stories well, the bad news is - this isn’t a proper forex trading strategy, it’s a recipe for a wipeout of equity.

Whatever system you use, you MUST have confidence in how and why it will work long term, if you don’t have this understanding, you will lack the discipline to take loss after loss and stick with your system until the profits come again.

Trading success is built on this:

Understanding & Logical Method + Confidence = Discipline and long term success

If you don’t have understanding and confidence, you simply won’t have the discipline to stay on course.

2. Can you take long Periods Losses?

For days, weeks or even months at a time and stick with your trading system?

All the best traders know they will face long periods of drawdown and have to stay disciplined. If you think this won’t happen to you think again - it will.

3. What’s Your Trading Edge?

Think about this - 95% of traders lose only 5% win, so forex trading success is not a walk in the park as many would have you believe.

The winners all have a trading edge, that allows them to enter this elite minority and you must to and be able to define it, have confidence in it and apply it with discipline.

That’s just 3 questions a novice trader should ask themselves and if you can’t answer them correctly, then you need to continue your forex education until you can.

Forex trading is not easy - and why would you expect it to be with the rewards on offer. The winning traders know this and you need to as well - but anyone can learn to trade and anyone can succeed, it’s just a question of the right education combined with the right mindset.

Forex trading for beginners is all about learning the right info and mindset and combing them to make a trading edge for profit and if you do this - currency trading success will be yours.

Tags :  Currency Trading, Forex Success, Forex Trading, Forex Trading For Beginners, Forex Trading Novice, Forex Trading Tips

These two mistakes are common and cause a wipeout of equity for those who make them yet there easy to avoid. If you are a new trader obviously don’t make them! If you are already trading avoid them and you could turn go from losing to winning quickly.

First understand this:

Cut Trading Frequency down! The most common error novice traders make is they think the more they trade the more chance they have of winning.

They like to trade short term moves day trade and scalp what happens? The odds are not on their side and they lose. On the other hand you have a trade who always likes to be in the market in case he misses a move well you can still miss a move when you’re in it by being the wrong way round!

Cut your trading frequency - only focus on high odds trades.

To give you an example of how effective this is - I know traders who trade less than a dozen times a year and make triple digit gains!

In a 9 - 5 job the more hours you put in the more you get out - in forex trading this is not true and in many respects, the less effort you make after getting your basic forex education the better.

2. Being to clever

A Help in most areas of life - a hindrance in the forex markets. Why?

Because clever people very often come with the attitude that I have got a degree ( or whatever) so I am smart and will be rewarded - Dead wrong!

You see these traders have egos and cant take losses discipline breaks down, as they can’t cope with being wrong.

Another trait of the clever trader is - to build highly complicated forex trading systems and overload them with to many inputs - complicated systems are not as effective as simple ones, as they have far more elements to break in the brutal world of real time trading. Simple ones are simply more robust and more effective.

The best traders tend to be humble and have simple trading systems and have the all important trait of being able to accept losses and look stupid in the short term, to accept longer term gains.

The two forex trading mistakes above are very common, so don’t make them from the start and if you are making them now, correct them instantly. If you do you could turn a losing forex trading strategy into a winning one.

Forex trading is all about trading high odds trades and they don’t come around all the time, be patient and be prepared to implement a simple trading system with vigorous discipline when they do, its as simple as that.

Tags : Currency Trading, FOREX, Forex Trading, Forex Trading Mistakes, Trading Frequency, Trading Tip

How is it possible to make real money by trading in the Forex market? Two words: Margin Trading. Margin trading is trading using borrowed money.

As you recall from part one, Forex is traded in lots, usually of $100,000. So you cannot for instance, purchase a hundred, or even five hundred units of any given currency. Some Forex dealers may offer Mini-Lots, which are $10,000 - or Micro-Lots of $1,000. Fortunately, you don’t need to have $100,000 lying around in order to get started in Forex trading.

Margin Trading is used extensively in Forex trading. The broker is paid a security margin, which will typically be between a quarter of a percent and five percent. You will then have control over a much larger amount of money. To trade a lot of $100,000 you will need a margin of $1,000 for the broker. You will need more than that in your Forex account, of course in case the trade does not work out well for you.

Say that at Ten in the morning, you sell $100,000 USD and purchase Euros. At that point, you will pay $1.4725 per Euro, meaning that you will be able to buy 67,912 Euros. Your Euros then have a value of $99,967 (you lose $33 from the bid/ask spread). You then close the trade at 5PM and sell your Euros and buy US Dollars. You’ll get $1.4770 per Euro, netting you $100,306. This will mean a profit of $306 for the day.

Margin trading is a form of leverage - where a small amount of money is used to leverage, or control, a much larger amount. Using Margin Trading, you can make or lose money from tiny changes in the relative value of currencies on the Forex market.

To trade this way, you will need more than the amount of the margin in your Forex account. In the case in the above paragraphs, you would need to have had more than a thousand to begin, otherwise you would have a negative amount in your Forex account.

Say you began with twice that in your Forex account. Again, $100,000 USD is sold and Euros bought in the morning. Your used margin would be $1,033, leaving a margin of $967 in your account. Now suppose the trade goes poorly for you. At noon, the quote is EUR/USD = 1.4578/1.4583, making the 67,912 Euros you purchased earlier worth $99,002. Your usable margin would then be only $2, and your trade would be automatically c;closed to prevent your account from going into the red. As a result, you would lose $1,998.

Now suppose that you had had $3,000 in your account, and your trade could have continued. If things had kept going badly, and the quote at one PM was: EUR/USD = 1.4570/1.4575 then your Euros would be worth $98,948. Your margin would be $2,052 used, with $948 left in your account. You could then keep trading, and hope for the Euro to recover against the US Dollar. If this occurs, and by five PM the quote is: EUR/USD = 1.4770/1.4775, you could then sell your Euros and make a profit of $306 for the day.

You should try to have at least twice your margin in your account always. The best move, if possible is to never trade with more than 10% of your Forex account at any given time.

Margin Percent = 100/Leverage
Leverage = 100/Margin Percent

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), high leverage (200:1), and tight spreads. Full details at Easy Forex Platform

Tags : Currency Trading, Forex Trading, FOREX Trading Platforms, Forex Trading Systems