.:Interletssa:.

Foreign exchange trading is one of the largest trading opportunities available. Every day, nearly two trillion dollars worth of foreign currency is traded on the bourses. Because of the immense size of this market, no single investor can substantially impact the market. Even multibillion dollar transactions are a relatively small percentage of the overall market, and can alter prices only slightly, and in the short term.

Foreign exchange trading is built on variations in basis points, where the basis point is one tenth of a cent (or one tenth of the smallest unit of currency being traded). For example, if Euros are $1.60 each, every $32 you put into Euros will net 20 of them. If Euros rise to $1.80 each, your 20 Euros will be worth $36.00.

The chief strategy for foreign exchange trading is watching the closing times of the major trading venues, which are London, the Asian markets and New York. A lot of banks will try to close out their positions at those times, which will cause the market to fluctuate.

Foreign exchange trading, like day trading in stocks, can result in an adrenaline rush mentality, and there’s a lot of money to be made in small shifts in exchange rates. However, to make foreign exchange trading work for you as a day trader, you need to live the life and adjust your sleep schedule to be awake when the markets are open to capitalize on shifts.

You can also take a long term strategy on foreign exchange trading. This is where you’re looking for long term trends rather than trying to run the races each day on daily shifts.

Key factors to keep in mind in terms of foreign exchange trading are the international news. In particular, any moves the Federal Reserve makes will change the exchange rates. Interest rate increases make the dollar more valuable (because holding investments in dollars that earn interest mean they accrue faster). Anything related to international conflict will drive the dollar down, and make other currencies more valuable.

A related type of foreign exchange trading is holding foreign bonds. This is how most foreign traders hold dollars, they buy US Treasury T-bills. A variation on this strategy is to hold foreign certificates of deposit. Basically anything rated in a foreign currency that’s accumulating interest on a short term basis (or using a ladder strategy or options strategy) can be used to double dip foreign exchange processes, getting both the relative movement of currencies and the interest accrued.

Tags : Currency Trading, Day Trading, Foreign Exchange Trading, FOREX, Trading

Many forex traders want to trade on auto pilot and simply follow trading signals generated by a system, without having to make subjective judgements. Here we are going to give you one for FREE which is proven in terms of its profit potential.

The system is Richard Donchian’s 4 Week rule and has been the basis of many successful trading systems around the world.

Big fans included trading legends such as Richard Dennis, so if its good enough for him its good enough for you!

The system was originally developed in the late 70s to trade commodities but can be used on any trending market and currencies trend well.

Now this system is so simple it consists of just one rule and here it is:

1) Close any short positions and go long whenever the price exceeds the highs of the previous 4 calendar weeks.

2) Close any long positions and go short whenever the price falls below the lows of the previous 4 calendar weeks.

If the system is run with a SAR (stop and reverse), the above system will always maintain a position in the market (either long or short).

Does it work?

Back test and you will see it does.

Of course it works very well in trending markets ensuring you are on the right side of every big move -
but like all trading systems there is a downside:

It will get whipped in a choppy sideways market and here you may wish to consider some filters:

A common solution to this problem is to enter on the 4 week rule (the breakout), and to exit on a shorter time frame such as 1 or 2 weeks.

Traders can also use other exit rules i.e. exit when a moving average is broken. For example, applying a 10-day moving average as the exit - A 10-day moving average is one-half of the entry signal (four weeks is of course 20 trading days) is period we like. You can also experiment with ADX RSI and MACD filters if you wish.

Many traders ignore this system; after all it’s not trendy or complex like chaos theory or artificial intelligence based systems, or full of mystical nonsense like Gann, Elliot Wave or Fibonacci - but it works.

Simple systems work better than complicated ones as they have fewer elements to break. If you are interested in making money long term and have a disciplined nature you will like this system.

If you believe complexity will beat the markets, they move to a scientific theory or enjoy the buzz of trading frequently - you won’t like it - This system is all about making money long term in a disciplined fashion.

The 4 week rule is simple you can customize it to restrict losses, by adding filter and it will have you on the right side of every major move - do that and you have great profit potential.

So if you want to trade forex on autopilot and make big long term gains, consider this free system and you maybe glad you did.

Tags : 4 Week Rule, Currency Trading, Forex Trading System, Richard Donchian, Trade Forex On Auto Pilot

If there is one story about forex trading that you should learn and digest it’s the story of “the turtles”. This group of traders learned to trade in just 14 days and went on to make $100 million in just 4 years - this story is inspiring and could lead you to currency trading success.

Legendary trader Richard Dennis set himself a task to show that anyone was capable of becoming a successful trader with the right education and mindset, so he gathered together some people from all walks of life, of all ages, both sexes and set about teaching them to trade.

They were a diverse group which included an auditor, a security guard and a kid fresh out of high school. In fact they only had one thing in common:

They knew nothing about financial markets and had never traded before.

Dennis taught them in 14 days and set them up with trading accounts and the rest is history they made over 100 million dollars within a few years and many went on to become trading legends.

Dennis taught them a simple currency trading system so simple in fact it could be understood by anyone (essentially it was a long term following breakout system) and rigid money management criteria. He didn’t tell them to follow it blindly, he made sure that they understood the logic it was based upon, so they were confident enough to take the system and apply it themselves.

So what can you learn?

That simple systems work well and still do why?

If you complicate a system to much you will end up losing because there are too many elements to break. Today we have more computer power and better number crunching data than ever before yet, 95% of traders still wipe themselves out and always have done.

Being to clever or building complicated systems will not help you - so keep it simple.

Anyone can learn to trade a system but far fewer can apply it with discipline when the pressure is on and the chips are down and loss after loss hits you (and believe me they do and its tough) its here rigid money management and the discipline to hang on are vital and take short term losses to make bigger long term profits.

Of course you need a robust system to succeed - but you also need the discipline to follow it and that’s what Dennis taught his pupils.

Discipline is hard, as it means we have to keep our emotions in check and that’s tough, even for seasoned traders. However learn how to do it and you can enjoy currency trading success.

Maybe you won’t become as rich as the turtles did, life is simply not like that but it does prove one point:

Anyone can learn to trade and anyone can be successful so use it as an inspiration in your forex trading and check out these two great books.

Way Of the Turtle by Curtis Faith, who was the most successful of the turtles and tells you all you need to know about the experiment and also read the great interviews in Market Wizards, by Jack Schwager which has not just info about the turtle experiment, but some of the best traders ever interviewed - both are essential reading.

The turtles inspired me to trade over 20 years ago and I hope they inspire you to and their story helps lead you to currency trading success.

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

Over 90% of traders fail to reach any success simply because they are not equipped for success, especially in key components such as money management and emotional control. This is true for most things in the civilized world. We are programmed for failure and as such as easy prey for the trap that is the financial markets.

If you are bad with money, then guess what, trading wont fix that. I’ve seen first hand my parents win $500,000 and lose it all in less than 4 years. What they never did was assess their bad habits.

Bad habits are addictions which are fueled by our minds chemical pharmacy. We’re all the same, and it is nature’s way of allowing us to evolve and stay alive. Habits are automatic programs that start with a memory which then creates an emotion, which in turn creates a chemical which then feeds the body and all its cells. This is a habit; our body’s addiction to naturally produced chemicals.

If you keep doing the same thing over and over again, but expect different results, you’re fighting a system that has been in creation for millions of years. However, change what you are doing and you break the cycle.

Traders who continuously make the same mistakes are doing it by habit. The problem is that they are unaware they are doing it, or they choose not to accept who they are or what they are doing. Those who become aware and those who become humble will open new exciting doors to much more than just successful trading.

A lot of what occurs soon after beginning a trading career is based on pie in the sky thinking, and very little planning. Apart from needing to construct a business plan to achieve your goals, you need to see yourself as already there doing what needs to be done.

When you were younger and you were deciding what it is you wanted to become you had mental pictures in your mind. This is what helped you to see what interested you the most. If you saw yourself being an engineer and it felt good seeing that in your minds eye, then pursuing that career felt like the right thing to do. Using the markets to achieve your goals is no different.

There are many things you can use your minds eye to imagine, such as your online trading account balance being very large, your transactions being very large, placing less and less trades over time, becoming more accurate in your forecasts or improving your win rate, being emotionally in control as your trades close whether in the black or the red, seeing yourself allowing the really big trades to run for as long as your system permits and so on.

Of course, it only becomes apparent once you begin trading for a while that you need to see yourself doing the opposite of something undesirable (such as cursing at the computer screen), however even when starting out trading for the first time, envisioning your long term goals as being achieved is very necessary.

If you think this is hocus pocus then there’s not much I can say other than, there are massive amounts of proven facts and research now available on how our mind functions, and the systems our brain has in place to be able to say, if you’re not prepared to imagine yourself as a success on a consistent basis, your brain will give you what it is programmed to give you and if you are like the herd, it will be failure.

tags : Currency Trading, FOREX, Futures, Investing, Options, Stock, Trading, Trading System

So you are a young person with some extra money and you don’t know what to do with it, but you know you can get rich by spending it wisely. Congratulations! The sooner you start to investing, the sooner you will be able to become financially free.

Let’s say you have a $500 - $1,000 to invest and need know the best place to put your money. What you really want to know is how you can use that money to make more money, right? Unfortunately, there is not one right answer, just a lot of opinions and different advice. Before you invest, do your research, understand that in the short term you may lose some money, but in the long run it will make money, and then take action. Here are some places to start:

* Stocks: Investing in individual stocks can be considered a bit more risky, particularly when considering the stock type and sector. Penny stocks, for example, can be a great way to loose all your money very quickly. High quality, blue chips are more likely safer bets – in general. Learn to understand how stock prices are valued and spread your risk across a few stocks that you plan to own for a few years. A subscription to www.morningstar.com may be your greatest investment, which can help you understand investing and quickly screen for the investment that is right for you.
* Mutual Funds: A mutual fund is an investment with a financial organization that manages a portfolio of stocks or assets. Since mutual funds invest in a number of stocks, your risk is spread and the value of the fund is reflected in the performance in the securities the fund owns. Be sure to look for funds that have a minimum initial investment that is in line with what you are able to spend. Consider the fees as well, which can eat up your profits. A good fund to start with may be an index fund, which tracks one of the major stock indexes such as the S&P 500. This would provide a relatively safe, yet consistent return on your investment.
* Start a Part-Time Business: Do you want to become really wealthy? Most of America’s wealthiest people are all business owners. Researchers claim that 1 in 10 business fail, so 9 out of 10 succeed! Why not start now at building your first business? Think about what you already do with your time and how you can turn that into a cash-generating business that will return your money several times over.
* CDs: A certificate of deposit is a perfect place to stash your cash if you want guaranteed returns and can afford to stash your money away for relatively short periods of time. Depending on the interest rates, you can generally make 5 - 10 percent on your money in a year, but you won’t be able to make any withdrawals without a paying a penalty. BankRate will show you the best deals.
* Prosper.com: At Prosper, you get to be the banker and loan other people money at a rate you negotiate.

The important thing is to just do it and get started as soon as you possibly can. You will learn more about investing by actually trying it yourself than by reading how to invest. If you lose some money, that is okay because that is to be expected. Only invest what you can afford to lose, and diversify properly by buying a mutual fund and you will minimize your loses. You will likely make many mistakes throughout your investing career. Better to lose some now and gain experience so when your income increases with age you already have the experience to turbo-charge your wealth. You cannot put a price tag on experience.

Most importantly, try to find an experienced money mentor that can help teach you the basics. You will learn there are multiple ways to make money, and you just want to find the one that you enjoy, understand and is right for you.

Tags : 000, Beginner Investing, Cds, Currency Trading, Investing Basics, Kid With Money, Where To Invest $1, Young Money

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