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    Free Essay
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    Others vs forex trading

     

    What are the advantages of Forex over other types of investments? LOW RISK - HIGH YIELD is the first thing that comes to mind. Forex Trading can be risky and the general rule for investing is: When the return is high the risk is high, but with correct planning and strategy combined with a certain amount of self discipline you can bring the risk factor down to a level that is quite low. It is even possible to strategically plan your market entry and exit levels and control exactly how much you profit or lose. This can be done in a way that allows the investor to still profit even when they misjudge the market 50% of the time! Compare that to other types of investments. GEARING, is another area that stands out as a major advantage; this also substantially reduces the risk to you the investor. When you trade 1 forex “Mini lot” you will be trading a parcel of money valued at $10,000 USD And you only need $100 USD of your own money! If you trade a regular “Lot” you only need $1,000 USD to trade $100,000 USD. How’s that for gearing? Try and do that with other kinds of investments! LOW CAPITAL REQUIRED, many investments require a substantial amount of capital before you can take advantage of a particular investment opportunity, with Forex You only need $300 USD to “get into the market”, and only need to have $100 USD in order to trade your $10,000 “Mini Lot”. CONVIENIENCE, if you have a laptop and an internet connection you can make a trade in 5- 10 minutes! Depending on how long your computer takes to start up, and the speed of your connection. LIQUIDITY, many other forms of investing require tying your money up for long periods of time, and if you need to use the capital it can be difficult or impossible to access to it without taking a huge loss (Real Estate). Not so with Forex trading. With Forex Trading you have full control of your capital. CAN PROFIT IN BULLISH OR BEARISH MARKETS, Stock market traders need stock prices to rise in order to take a profit, Real Estate prices must go up in order to make a capital gain. However, The Forex investor can make a profit in both situations, a rising or falling market. The Forex Market is open 24 hrs a day. Can anyone do it or do you need to be some kind of super genius? Forex Trading isn’t for the faint hearted so be warned, while you can get yourself a “Demo Account” and practice as you learn in real time in the real market. You can’t experience the emotions that come with putting your real money on the line. You can however prepare yourself well by using one of the many Forex Trading courses that are available online today.

         
    Paper trading and the transition to real money trading

     

    Paper trading is widely discussed regarding its merits, and whether it is of value to a trader as they try to make the transition to real money trader. One viewpoint is that since paper trading is not real, the profits are meaningless, and are no indication of real money profitability. An opposite viewpoint would state that paper trading is an important step in the trader’s learning progression, and regardless of whether it is real, if the trader cannot ‘properly’ paper trade, then they will not be able to real money trade. I began trading in early 1995, with the intentions of becoming an options trader; my first trading education was through an oex options teaching service. Besides options training, the service included ‘tape’ reading, trade management AND sp500 index futures trading – also included in the service was the prevalent attitude that paper trading was for ‘sissies’. So I was a new trader, trying to learn and understand completely new concepts and ideas - what was called a trading method AND I was ‘practicing’ with real money – because paper trading was for ‘sissies’. What did I accomplish, besides a big draw down in my account? I quickly introduced to trading psychology and the related implications – something else I also knew nothing about. Losing money and a trading psychology ‘wreck’, both from the losses and thoughts like I was too ‘stupid’ to ever learn how to trade, became a combination which took me out of futures trading, and then unfortunately carried over into my options trading which I had previously been doing well with. I just couldn’t take it any more – I had to somehow start all over, or just quit for good. Paper Trading Viewpoints Consider: simulator fill prices are not real and won’t be attainable with real money. Even if this is correct, is it really an issue unless the trader intends to be a scalper, trading for very small profits, and thus each tick is critical? Granted, but shouldn’t a beginning trader be very selective, focusing on learning their method and the ‘best’ setups that method provides? This would be my viewpoint, and in this capacity paper trading fill prices are not an issue. Consider: the trades are being done with no risk. No, there isn’t any financial risk in paper trading, but I actually haven’t met nearly as many profitable paper traders as one might expect. Why would this be the case if being able to trade without risk was such an easy thing to do? As well, what about self-esteem risk, and an attitude like - how can I be so bad that I can’t even paper trade? The risk feelings like these are probably greater than that of financial risk, and if they are going to surface, you would want to encounter them before trading real money. As well, even if the issue was only one of financial risk – wouldn’t you want to begin with the confidence of knowing that you were paper trading profitable? It would be hard to imagine a losing paper trading being able to profitably trade real money. Consider: there is no emotion involved with paper trading. I was in our chat room watching a paper trader post their trades in order for me to give them feedback, and I noticed that one of their specific plan setups wasn’t done. When I asked why, the trader told me that they were ahead for the day and didn’t want to risk those profits. But the profits aren’t real – how can you not take a ‘base’ method setup when paper trading – isn’t that the point? Would you be in agreement, that if paper trading profits could be viewed in this fashion, that it has the ability to become very real and thus emotional to the trader? I would suggest that this is related to paper trading really not being ‘so easy’, and as mentioned above, self-esteem risk can be very emotional. Besides examples like this, emotions can be added to the paper trading process. Throw away your simulator, and then go into a chat room and post all of your trades – no ‘youknowwhating’ around where you wait to see if the trade was profitable before you post it, like a number of traders that I have seen. What’s the point, and when you consider the underlying implications of ‘needing’ to do this – the issue certainly isn’t about whether paper trading is of value or not, but certainly best to find out before trading real money. You must post immediately and without lag, giving your direction and entry price, along with subsequent posts of any partial profits, and of course your exit, which ultimately is the determinant of whether the trade was profitable. There is no need to make any comments, or answer any questions regarding your trades – simply post the particulars as fast and real time as possible AND see if you feel any emotions doing this in front of the rest of the room while you go through a series of losses. Do you want to add even more emotions? Go through the same posting process, but do so where the rest of the room actually knows the method that you are trading, and what the trades ‘should’ be. You will quickly find out just how emotional paper trading can be – actually a very valuable exercise for the paper trader to do. Paper Trading And Making It Further Beneficial I have two predominant problems with paper trading, but this is with the trader’s approach, and not with paper trading by definition: (1) the trader does ‘things’ paper trading that they would-could not do with real money (2) the trader views paper trading profitability, instead of paper trading proficiency, as the guideline of whether they are ready to begin trading real money. I have seen too many paper traders, continuously and knowingly, over trade ‘non-plan’ trades, with trading size that is greater than they could afford the margin for in a real account – let alone accept the risk of loss, while also holding trades for risk amounts that they would not accept with real money. Viewing paper trading as a ‘step’ in the learning progression and transition to real money trading, it is critical that the paper trader only trades exactly what, and how they would trade with real money. Don’t allow yourself to turn paper trading into a game, supposedly because there is no risk – the risk of making bad habits that you can’t correct is tremendous, and will circumvent any attempt to trade real money. This is the time to learn YOUR basic trading setups, and make necessary adjustments to them and your entry-exit timing, in order to then make money trading them – this is NOT the time to turn your simulator into a pinball machine flipping at any ball that comes near you. There is a problem with focusing on trading profitability - vs - trading proficiency. To begin with, profitability places the focus on money instead of on plan. And what is profitability – if you take 10 trades and make $75 are you profitable? Technically, if you are net ahead you are profitable, but what if those same 10 trades had a potential of $1,500, and you only made $75 – are you really profitable? This is what I am referring to when I think of trading proficiency. Instead of focusing on the common metrics, such as win:loss or win size:loss size ratios, I am most concerned with the win size:potential win size ratio, and want to maximize this percentage to the extent that is possible. For instance, when a trader asks about adding trading size, taking the attitude that if they can make $100 trading 3 contracts, then they can make $1,000 by trading 30 contracts, the first thing I ask them is what is their proficiency ratio – why increase contract size and the corresponding trading risk, if you ‘should’ be able to make more money from smaller size? This is especially important for the paper trader, where they should not regard simple profitability as an indication of readiness to trade real money, but consider proficiency – for instance, begin trading real money when you are 60-70 percent proficient with your paper trades. So What Is Your Viewpoint Regarding Paper Trading? I never thought that I would ever make a dime trading, let alone be able to trade for a living or become involved with trying to teach others to trade – was this simply a function of starting over and paper trading? Granted that is too simplistic, however, I do know that it would have certainly changed the beginnings that I had, while very much shortening my learning curve, and reducing a lot of pain. Clearly, I am on the ‘side’ that believes that paper trading is not only beneficial, but that paper trading is also necessary – however the value received will be dependant upon the trader’s approach and attitude. Needless to say, paper trading as described is something that I have always strongly recommended.

         
    Pivot points in forex mapping your time frame

     

    It is useful to have a map and be able to see where the price is relative to previous market action. This way we can see how is the sentiment of traders and investors at any given moment, it also gives us a general idea of where the market is heading during the day. This information can help us decide which way to trade. Pivot points, a technique developed by floor traders, help us see where the price is relative to previous market action. As a definition, a pivot point is a turning point or condition. The same applies to the Forex market, the pivot point is a level in which the sentiment of the market changes from “bull” to “bear” or vice versa. If the market breaks this level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand, if the market breaks this level down, then the sentiment is bear, and it is expected to continue its way down. Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible. Pivot points work best on highly liquid markets, like the spot currency market, but they can also be used in other markets as well. Pivot Points In a few words, pivot point is a level in which the sentiment of traders and investors changes from bull to bear or vice versa. Why PP work? They work simply because many individual traders and investors use and trust them, as well as bank and institutional traders. It is known to every trader that the pivot point is an important measure of strength and weakness of any market. Calculating pivot points There are several ways to arrive to the Pivot point. The method we found to have the most accurate results is calculated by taking the average of the high, low and close of a previous period (or session). Pivot point (PP) = (High + Low + Close) / 3 Take for instance the following EUR/USD information from the previous session: Open: 1.2386 High: 1.2474 Low: 1.2376 Close: 1.2458 The PP would be, PP = (1.2474 + 1.2376 + 1.2458) / 3 = 1.2439 What does this number tell us? It simply tells us that if the market is trading above 1.2439, Bulls are winning the battle pushing the prices higher. And if the market is trading below this 1.2439 the bears are winning the battle pulling prices lower. On both cases this condition is likely to sustain until the next session. Since the Forex market is a 24hr market (no close or open from day to day) there is a eternal battle on deciding at white time we should take the open, close, high and low from each session. From our point of view, the times that produce more accurate predictions is taking the open at 00:00 GMT and the close at 23:59 GMT. Besides the calculation of the PP, there are other support and resistance levels that are calculated taking the PP as a reference. Support 1 (S1) = (PP * 2) – H Resistance 1 (R1) = (PP * 2) - L Support 2 (S2) = PP – (R1 – S1) Resistance 2 (R2) = PP + (R1 – S1) Where , H is the High of the previous period and L is the low of the previous period Continuing with the example above, PP = 1.2439 S1 = (1.2439 * 2) - 1.2474 = 1.2404 R1 = (1.2439 * 2) – 1.2376 = 1.2502 R2 = 1.2439 + (1.2636 – 1.2537) = 1.2537 S2 = 1.2439 – (1.2636 – 1.2537) = 1.2537 These levels are supposed to mark support and resistance levels for the current session. On the example above, the PP was calculated using information of the previous session (previous day.) This way we could see possible intraday resistance and support levels. But it can also be calculated using the previous weekly or monthly data to determine such levels. By doing so we are able to see the sentiment over longer periods of time. Also we can see possible levels that might offer support and resistance throughout the week or month. Calculating the Pivot point in a weekly or monthly basis is mostly used by long term traders, but it can also be used by short time traders, it gives us a good idea about the longer term trend. S1, S2, R1 AND R2...? An Objective Alternative As already stated, the pivot point zone is a well-known technique and it works simply because many traders and investors use and trust it. But what about the other support and resistance zones (S1, S2, R1 and R2,) to forecast a support or resistance level with some mathematical formula is somehow subjective. It is hard to rely on them blindly just because the formula popped out that level. For this reason, we have created an alternative way to map our time frame, simpler but more objective and effective. We calculate the pivot point as showed before. But our support and resistance levels are drawn in a different way. We take the previous session high and low, and draw those levels on today’s chart. The same is done with the session before the previous session. So, we will have our PP and four more important levels drawn in our chart. LOPS1, low of the previous session. HOPS1, high of the previous session. LOPS2, low of the session before the previous session. HOPS2, high of the session before the previous session. PP, pivot point. These levels will tell us the strength of the market at any given moment. If the market is trading above the PP, then the market is considered in a possible uptrend. If the market is trading above HOPS1 or HOPS2, then the market is in an uptrend, and we only take long positions. If the market is trading below the PP then the market is considered in a possible downtrend. If the market is trading below LOPS1 or LOPS2, then the market is in a downtrend, and we should only consider short trades. The psychology behind this approach is simple. We know that for some reason the market stopped there from going higher/lower the previous session, or the session before that. We don’t know the reason, and we don’t need to know it. We only know the fact: the market reversed at that level. We also know that traders and investors have memories, they do remember that the price stopped there before, and the odds are that the market reverses from there again (maybe because the same reason, and maybe not) or at least find some support or resistance at these levels. What is important about his approach is that support and resistance levels are measured objectively; they aren’t just a level derived from a mathematical formula, the price reversed there before so these levels have a higher probability of being effective. Our mapping method works on both market conditions, when trending and on sideways conditions. In a trending market, it helps us determine the strength of the trend and trade off important levels. On sideways markets it shows us possible reversal levels. How we use our mapping method? We at StraightForex ( straightforex) use the mapping method in three different ways: as a trend identification (measure of the strength of the trend), a trading system using important levels with price behavior as a trading signal and to set the risk reward ratio (RR) of any given trade based on where the is the market relative to the previous session.

         
    Poor man s access to foreign currency trading

     

    By far, the largest trading market in the world is the foreign currency market. Speculators make up only a small part of the spot (cash market) and forward (futures market) currency exchange transactions. So if you are considering speculating in this area, be aware that you are trying to out-guess the brightest minds & supercomputers at large banks and hedge funds; along with the political whims & expediency of government treasury departments. The common portfolio use for holding foreign currencies is to hedge against the fall of your home currency. For most people, their salary and all their assets are based in their home currency – and if that falls in value, so does their entire net worth and future earnings. For Americans, as an example, there has been a growing trade deficit with China for many years. And if China were to allow their currency to fluctuate, the U. S. dollar would fall against the Chinese yuan in concert with this trade deficit. You can also include currency trading as an additional way to diversify your portfolio. I have read many, many books to learn about currency trading, and even day-traded the Swiss-Franc for six months. If you want to learn how to speculate with trading currencies, you can either try some technical analysis services at the link below, or getting a Phd. in economics and finance, but I can’t guarantee that will increase your odds of success. I made my only ‘very poor man’ currency trade prior to the establishment of the Euro currency in 2002. While driving in my car, I heard a speech over the radio by the German president that I felt was certain to cause a short-term fall in the German Mark. I drove to the nearest AAA Travel Office, and went to the ATM next door to withdraw $200 in cash to put in my pocket. Being a AAA member, I then exchanged the $200 for American Express Traveler’s Cheques that were denominated in German Marks. Four months later, the U. S. dollar had increased by 10% on the German Mark. So I took my German Mark cheques to exchange them back into dollars and cash out with a giant profit. To my disappointment, the fees for the buy & sell transactions added up to about 8%, leaving me with a giant $4 profit. So if you want to try the “Travelers Cheque” route, you’ll need a big trend to offset your transaction fees. The next step up in initial cost is an ETF that is based on the Euro with the ticker symbol FXE. It is technically a trust, but it is traded exactly like a stock, and it fluctuates very close to the USD/Euro rate. When you think the dollar is going to fall against the Euro, just buy some of these shares to offset your currency risk, and you can start with one share for less than $200. The next way to get access to foreign currencies is to get some FDIC insured certificates of deposit from Everbank. They offer CDs in over 10 different foreign currencies and a couple indices, and the minimum investment is only $10,000 for an interest earning account. So if you are tired of your bank’s low savings account rate, there are currencies that regularly offer a higher yield without undue currency exchange risk. Risk a few small steps into foreign currency investments, and anything dollar-based will feel disappointingly tame. Plus, you’ll have bragging rights with your friends and dinner parties on your sophisticated investment portfolio.

         
    Pros and cons of fundamental analysis

     

    There are two groups of traders: fundamentalists and technicians. Fundamentalists are traders who use fundamental analysis to predict price action, and technicians are traders who use technical analysis to predict price action. Of course a lot of traders use both types of analysis. Let’s talk today about fundamental analysis, which is based on economic factors. Fundamentalists assume that the supply and demand for currencies is a result of economic processes that can be observed. So, they observe economic, social, and political forces that drive supply and demand. They believe that by observing all kinds of indicators they can predict price actions. Because currency prices are a reflection of the balance between supply and demand for currencies, by analyzing different data, such as interest rates, balance of trade, foreign investment, GDP and many others, traders can predict price actions. The problem is that there is huge amount of data to analyze. Fundamentalists can study any criteria except price action. Different fundamental analysts look at different economic indicators, but the most important are economic growth rates, inflation, unemployment and interest rates. Especially data that is related to interest rates and international trade is analyzed very closely. Fundamentalists know when different economic indicators will be released. They usually have calendars where they note the date and time when different important statistics will be made public. By learning and observing different fundamentals of the markets we can increase our knowledge and understanding of the global market. By doing fundamental analysis we can predict economic conditions very well. We can also have a clear picture of general health of the economy. We will know what is going on. Those are the reasons why we should not completely ignore fundamental analysis. But there are some problems with fundamental analysis. Fundamental analysis usually does not give us specific entry and exit points, so the trades can be pretty risky. It is very difficult to find a method of translating all of the different information into specific entry and exit points for a particular trading strategy. There is so much information that it is easy to be confused. That is why many traders use some fundamental analysis to understand unexpected movements of the prices and to know the forces which move them, but they use technical analysis to decide when to enter and exit the trades. To learn more about currency trading go to: currencytradingmethod

         
    Psychology of the winning trader

     

    It is said that nine out of every ten traders loose money. It is also said that day trading is seventy five percent psychology and the other twenty five percent divided up between your trading system and proper money management. Now I do not know if those facts are true or false. I have never seen a survey published on the topic, maybe someone can help me with that information, but let us assume that if it’s not absolutely true then it is nearly true. This would mean that most traders are lacking the proper psychology for trading. Therefore we need to look very carefully at this business of our thought patterns, what we are thinking while we are trading. All our actions are governed by either pleasure or pain. Whatever we do, we do it to either to experience pleasure or escape pain. We have a need to avoid pain and a desire to gain pleasure. We need to do some introspection and decide what is it that drives us while we are trading, pleasure or pain. Do you jump into every trade even when the setups are not quite right because you just cannot stand missing the next big move, not having the pleasure of the winning trade. Fear will probably cause you to not enter trades when everything looks perfect because the chance of loosing money is just too much for you. So you sit there paralyzed, or you enter the trade but your stops are so tight you hardly ever make any money. Most traders I believe associate trading with pain. They are ruled by fear. The fact is that every trader looses money. It is part of the game. It’s how you deal with it that matters. If we associate pleasure with every winning trade and pain with every loosing trade then our trading career will be an emotion roller coaster ride of up and down feelings. This is the very heart of the problem. Most of us are emotional traders. Our psychology has associated winning with pleasure and loosing with pain. The problem with this is that in day trading we will experience a number of winners and losers everyday. If you start the day with a couple of losers you will begin to hurt, which causes fear and when the next setup comes along your fear level is too high and prevents you from entering the trade, That trade just happened to be a winner and you missed it. Now you are really going to pieces. What can we do to overcome our emotions? We have to change or psychology, change the associations we have formed of pleasure equals winners and pain equals losers. The first thing is to set goals for our trading and our goal should be consistent profitability. What are our monthly and our yearly goals? Use points or pips instead of money. Secondly, we need to know what is preventing us from achieving our goals. Is it fear of loses, incorrect position sizing etc. Look at what you are doing and why it is not working. We now need to break that pattern of behavior and install a new pattern. How do we do that?

         
    Real forex traders learn to like losses

     

    As a forex trader you have to learn how to take losses. Period. Don't be a crybaby. Learn how to take losses. Learning how to take losses is one of the most important lessons you must learn if you want to survive as a trader. Nobody is 100% right all the time. Losses are inevitable. Even Michael Jordan and Tiger Woods lose sometimes and they're considered the best in their field. There will be trading streaks where you'll have a number of successful consecutive trades, but that will eventually come to an end you will take a loss. As that point it’s very important not to lose your head, you must remain in control of yourself. Don't have a cow man. Take a break. Calm down and relax. Take a chill pill dude. Until you've regained a clear mind and an ability to think logically again, stay out of the market. Don’t whine about your loss and never carry a prejudice against a loss. The key to manage losses is to cut them quickly before a small loss becomes a large one. I repeat. The key to manage losses is to cut them quickly before a small loss becomes a large one. Never ever think that you will never lose. That's just ludicrous. Losses are just like profits, it’s all part of the trader’s universe. Losses are unavoidable. Get over the loss and move on to the next trade.

         
    Recognise the force and trade the trend

     

    You may have heard the saying ‘A Trend is your Friend until it Bends’. Technical Analysis helps us to identify a trend so we can jump on and ride it until it changes. Since the Forex market has very strong trends, technical analysis is a very effective technique. Some traders still persist on trading against the trend, they argue with it even though price movements are obviously in a trend. Buying when the currency is in a basic downtrend or selling when it’s in an uptrend, instead of buying. Our primary purpose is to identify the major trend, intermediate trend and the short term trends and place trades in that direction. We then hold position until our calculations suggest otherwise. Here’s a quote from Jesse Livermore, a tenacious, flamboyant and profitable Forex trader, "We know that prices move up and down. They always have and they always will. My theory is that behind these major movements is an irresistible force. That is all one needs to know. It is not well to be too curious about all the reasons behind price movements. You risk the danger of clouding your mind with non-essentials. Just recognize that the movement is there and take advantage of it by steering your speculative ship along with the tide. Do not argue with the condition, and most of all, do not try to combat it." There’s gold in these words. If the market action shows your analysis to be correct, the successful traders stay with the market and maximize profit according to his or her equity management rules. If the market turns, the smart trader will get out and collect profits. Watch the market and listen to what it tells you about upcoming trends and most importantly don’t ask for reasons for what it does, focus on the essentials. There are often repeating patterns in price changes. Once established. They become the most probable way to predict price changes. These can be categorized into two types of markets, trending and trend-less. Trending markets have up and down trends; these are typically less than 45° and are steady movers with occasional pauses or profit-taking periods. Trend-less markets have very steep movement of more than 45° that most often can’t be sustained. Although price movements can shift a considerable number of pips in a short time period they often don’t produce much net profit. Choppy markets often produce stop outs and the sideways market, with minimal price movements makes it very difficult to predict which way the price will move. For these reasons, our objective is to get into a trending market and meet our trading objectives. The underlying message here is, “Be a good friend to the trend”, a simple concept but powerful indeed.

         
    Relocation and the currency market

     

    As we all know, there are many important areas to be considered in the process of relocating. From the physical removal of household goods, to settling children into new schools, there seem to be an endless number of items to check off on a relocation ‘to-do’ list. Yet as a currency specialist we continually find that the all important purchase of the employees local currency is often overlooked. Whether transferring a lump sum to purchase an over seas property, or simply forwarding a US Dollar salary abroad every month, we have experienced that general corporate practice is to stay somewhat removed from this aspect of an international assignment or permanent move. Simply allowing employees to blindly use their banks to make their own decision on how they are going to move their Dollars abroad, however, can be a costly mistake! Volatility in the currency markets is an undeniable and unavoidable daily occurrence. With a daily turnover in excess of $1.5 billion and an uncountable number of factors playing into which way the market will move, it is impossible to forecast currencies with 100% accuracy. While large corporations employ market professionals to manage billions of dollars worth of currency risk, private individuals are often left at the whim of this massive market feeling uneducated and at risk. So why should this be a concern? If you imagine yourself in the shoes of an international employee, it is quite simple to see how the currency market and exchange rates directly affect your life: While your employer is, for example, a US based company; you will more than likely receive your salary in US Dollars (USD). This income may be deposited into your US account every month or possibly into an international account that has been set up in your new country. Either way, you will usually need to exchange your USD income into the local currency in order to buy groceries, pay bills and maintain a standard of living. The process of using your bank can be frustrating and may also be expensive. Think of it this way; every month you will need to contact your bank in order to initiate the exchange from your USD account into your local account. You will more than likely speak with a different person every time you call and you will most definitely receive a different exchange rate every month. On top of all that your bank will charge you a wire transfer fee ranging from $15-$30 per transaction. While the cost of wiring these funds on a regular basis will certainly add up over time, the inherent risk you face not knowing what rate you will receive in the future is MUCH more concerning. To illustrate let us assume that you were transferring USD$5,000 in wages to Canada on a monthly basis. In May of 2005, your USD$5,000 would have converted into roughly CAD$6,350 at a rate of 1.27. By February of 2006, that same USD$5,000 would have purchased you just CAD$5,700, a difference of CAD$650 every month. Assuming that you were using your bank, you would have also been receiving a wire transfer fee for each transaction totaling somewhere around $300-$400 in bank charges alone. The solution is simple; if you want to protect against currency risk, receive better rates of exchange and avoid needless fees, don’t use your bank! Most private individuals in this situation do not realize there is alternative to their bank, but using a currency specialist like HIFX can in fact remove the stress and hassle of these such requirements all together. HIFX’s Private Client Services include the securing exchange rates for up to 24 months, the setting up of direct debits which will avoid all transfer and bank receipt charges, and a simple, friendly service that is designed to put clients at ease. Whether your employees need to make regular transfers abroad or are moving larger sums of money for their international purchases, it is worth knowing that you can point them in the direction of a world renowned currency specialist which completely understands the relocation process. For more, detailed information on international currency transfer please go to: onestopimmigration-canada/money_transfer_overseas. html

         
    Savvy tactics to minimize whopping forex losses

     

    Forex trading has one goal: to make money. Unfortunately, like any speculative venture, there is a potential for loosing money. The same holds true with the stock market the commodities market, and the money market. Any investment that entices of great gain poses a certain level of risk. As a forex trader you want to minimize your chance of risk. Observe the following Best Practices: • Stay informed. Peruse the current events magazines and political journals. Know how the global political and social landscapes. Have been shifting. • Brush up on economics. A college refresher course can keep you out of the red. Journals by economists like John Maynard Keyes, Kenneth Galbraith and Walter Williams can help you guesstimate potential forex uptrends. • Read periodicals like the Asian Wall Street Journal and Business Investors Daily. • Fire up a practice demo account and get a feel of the game before jumping into the market. • Befriend a broker you trust. • Cultivate friendships with other traders into active trading. • Understand historical trends and their impact on the charts. • Take a short course on forex trading to get your skills up to speed. These cost under $200 and can help you avoid $20000 losses. • Research forex on the Internet. Forums provide great sources of information. • And finally, invest money that you can actually afford to lose if worse comes to worse. Then you won’t be out of the game completely. • Cut your losses early. When a portfolio is losing week after week, shed it. It may take months to recover which means money tied unproductively. • Invest in multiple currency pairs, such as EU-GBP, GBP-USD, CHF-USD. This frees the trader from monumental losses incurred when all eggs are thrown into one currency pair. • Don't hang to a position for extended periods. This ins't the stock market where equities tend to go up in the long term. Sell positions when minor up movements are made and reinvest in other currency pairs. Good luck and happy trading!

         
    Seven come leverage 7 reasons why forex is a superior trading arena for individuals

     

    Over the last decade or so, the Foreign Currency Exchange markets and trading platforms have become a superior arena for active individual investors. Trading world currencies for the difference in exchange rates can be a lucrative hobby and a very satisfying lifestyle. Following are some points to ponder when comparing the Forex market with stocks, bonds, commodities and mutual funds. 1. Liquidity An average day in the Forex market sees approximately 1.9 trillion US dollars worth of trade. Almost every country in the world has institutional and individual traders who are active and have a personal interest in this largest of commodities. Over 7000 international banks and small and large speculators make up the largest market in the world. 2. Leverage Leverage is the use of a tool to influence the directional trend of a mass that would otherwise be much more difficult to control, if not impossible. Previously only master traders with a $100 million account had access to the inter-bank currency exchange. With the recent enormous international growth this market is now open to the home computer. Individual traders now have the same leverage guarantees that international banks have had for years. A very small amount of money can be used to control a very large contract of foreign currency. Up to 200:1 leverage is available, and higher in some cases. This means $1000 can be used to hold $200,000 worth of another currency, with a large account. 3. Brokers As a trader gains experience, a full service paid broker is no longer necessary. All trades can be initiated and terminated from the trader’s choice of office. The home office needs high speed internet, a telephone line, and a computer. Location is only limited to these requirements. The Forex market is operated online by several hundred large banks processing trades of governments and large companies, and has no real central location. 4. Software A number of free software applications are offered by brokerage houses specifically written for the average home computer. The greater power the computer has will naturally offer more local speed, but most current computers will work fine. These programs offer real-time charting, several dozen indicators, live price feed, or a minimal 10 second delay, and the capability to sell and buy currency pairs immediately online. Software programs costing $2000 and up are available with advanced features, but are not necessary for the beginning trader. More complicated software may only increase the education period, and hinder time better spent learning trading strategies. 5. Hours of Trading The Forex market is truly global, trading 24 hours a day every day. Short periods during the weekend have slower activity, but with time differences around the world, these periods are minimal. The Asian market opens Sunday evening in North American time, and all markets run continuously until Friday afternoon. Someone is actively trading somewhere virtually round the clock. 6. Live Practice Most brokers offer a free demo version of their live software, easily downloaded and installed. No account deposit is needed. The programs work exactly like the real versions, with buy/sell capability, real-time data updates; a realistic $50,000 account with active profit and loss; open, pending and closed trades; and actual stop, limit and market trades. The trader can practice trading tactics until confident and successful. 7. Initial Investment Recent developments now allow a minimum account deposit of US$250. This mini-account offers lower leverage, but also lower profit and loss. Once a broker learns to trade profitably, this can easily be built into a larger and fully leveraged account. A minimal $300 investment can realistically be compounded into a $30,000 account in six months, with access to proper training. Brokers naturally offer conservative training courses, so the trader should look elsewhere for more advanced mentoring. Much training is available on the internet, and a website called Precise4XSuccess offers access to cutting-edge successful strategies developed by a mathematician. Not all successful strategies are made public. Do your due diligence to find the methods that work for you. 8-45. This article promised to stop at seven, but there are at least several dozen more reasons why the individual speculator might consider foreign currency trading. It is a lucrative, fascinating and very rewarding occupation that can be done almost anywhere and any time you choose to trade. Good trading, Kelly Archibald.

         
    Should you use a pareto chart

     

    What? you don't know what it is Unless you are familiar with manufacturing management principles, you probably have not heard of a pareto chart. It is a very effective tool managers use, to manage and effect outcomes in manufacturing environments. You're saying, How in the heck will this help my trading? Well it can, if you use it right. Another name for using pareto charts is, managing by exception. It brings focus on the problem areas, you then try to change these areas to produce different results in the future. With this chart you will quickly see the weakest areas in your trading. On the other hand you also identify your strongest. This allows you to put maximum effort in areas where you need the most improvement. To build a pareto chart for trading you should start with 3 columns and 12 rows. Place the words; System, Psychology, and Emotion across the top. (one in each column) Down the side you will track each trade. This chart will be used with your trading log. You should all keep a trading log, you can enter information from prior log entries also. There are three things that directly affect your trading, they are now listed at the top of your pareto chart. After you have listed trades in the side rows. Put a check in the column that corresponds to the main reason you think that the trade was a success or a failure. Once you have completed your list, take a look at the failed trades. You will probably see a pattern of the same reason again and again. With this simple chart you have quickly identified your main weakness. With this knowledge you can analyze the problem and form solutions to change that outcome. A valuable tool for this is called a root cause analysis.

         
    So you want to become a futures day trader

     

    You wake up one morning with a really BAD idea – you have decided to start making your living by becoming a futures day trader. BUT how can this be such a bad idea, don’t people get rich day trading futures? Where did that idea come from? Did you see one of those ‘work’ for 10 minutes a day and make $4200, ‘get rich quick never lose’ hype system ads? Or did you visit a chatroom, and the ‘resident guru’ made it all sound so easy? Maybe, the title of this article should have been – How To Die A Painful Death Chasing A Carrot. Get real. IF systems like that really were available, or if day trading really was that easy, wouldn’t everyone be a rich day trader instead of being a statistic in the 90 percent of all day traders fail club? IF you can’t be truly realistic regarding this, truly believing and understanding the odds against you THEN you do not have a chance. You would really be best off ‘giving up’ on this idea about day trading, and save yourself a lot of pain and money. Over the last nine years, I have known and worked with many traders, and over this time have seen the unrealistic expectations, and problems with their approach towards trading, where people who possibly had a chance to be successful were actually done before they started. I have thought about writing a book about this. The book would not be about how to day trade, but instead, it would be about how to learn how to day trade – the key word being learning NOT trade. It Can’t Just Be About The Money How can learning any new skill start with a total focus on the end result, instead of how you plan to achieve that result. That would be no different than trying to put the roof on a house before you built the walls, or expecting to receive your college degree the day that you begin classes. Talk about unrealistic expectations – these are impossibilities – as are any get rich quick trading schemes. Yet many come into day trading as what I refer to as a job replacement ‘trader’, this is a ‘trader’ who tells me the following: I know I need to spend the time making a trading plan and ‘properly’ paper trading it before I start trading real money, but I can’t, I just got laid off from my job and need to trade now to make some money. There is another statistic for the 90 percent club. When I meet a new trader who has some interest in what I am doing, this is probably the most frequently asked question: how long is it going to take me to be profitable with your method? This ‘trader’ has never traded real money yet, or has been losing at whatever ‘trading’ that they have done, yet what they want to know is how long will take to be profitable with a new method. My answer to questions like these is to first ask my own question: what are you planning to do to learn this method, how can you possibly become profitable with any method before you learn it? I can remember one specific ‘trader’ that I talked to 2-3 times before joining our group. In the conversations this trader told me how many thousands of dollars he had spent on trading systems, methods, and trading groups – it was almost like he was ‘bragging’ about it? He never learned how to trade, and he had never traded profitably. BUT once again the same question came up – how long is it going to take? I told the ‘trader’ my thoughts regarding this, while also saying that if this was the major concern that they would probably never learn it, and they really shouldn’t join the group. The ‘trader’ assured me that this time it would be different BUT it wasn’t – they never studied the training materials, but I would get an email every couple of days asking me when I thought they should start trading real money. And there is another statistic for the 90 percent club. Trading just can’t be about the money, especially from the beginning, but really at any point in your trading career. Trading is about the process; that process being learning a method and the related trade setups, the creation of what I refer to as a base setup plan. Does it seem logical, that you actually need ‘something’ to trade before you get rich trading it? After this is done, start paper trading this plan in order to gain enough screen time and repetition that you can make adjustments – learning your mistakes and misreads that you make in real time execution. Accomplish this, and then begin to keep profitability records of your paper trading, first trading for profitability, and then trading for proficiency where you concern yourself with the percentage of profit potential you are gaining, not simply whether you make a profit. How long is this going to take to do? Who knows, but there sure aren’t any shortcuts. Actually, it probably won’t ever happen. Paper trading to a proficient level really is a very difficult thing to accomplish, as ‘traders’ aren’t willing to work hard enough, and with the necessary commitment, as there is no financial reward from paper trading. Furthermore, since there is also no financial risk, paper trading is quite often turned into a game and becomes of a waste of time, and creation of bad habits that become to hard to change. But skip the process altogether, because you want to start making all of that money that caused you to decide to become a day trader to begin with AND – another statistic for the 90 percent club. Introduction To Trading Psychology I would guess that most everyone has had experience with some kind of real time performance stress before. Maybe it was a college final, or maybe it was related to athletics, maybe you had to give a speech, or maybe you were in a theatrical performance. Whatever the case may be, for myself, as well as anyone else I remember talking to, nothing was even similar to the ‘feelings’ that were ‘brought on’ by day trading real money real time. My background included athletics, and I can remember pitching in a state final baseball game, and I can remember last second free-throws in tournament basketball games – it was a piece of cake when compared to starting to trade real money. Nothing can prepare you for risking your money on an unknown outcome, of which you have no physical control, while watching price bars that all of a sudden have seemed to start ‘ticking’ at the speed of light – with your heart racing and the inability to sit still and the dry mouth and the sweaty palms and the feeling like you are going to puke – etc etc etc. Doesn’t that sound like fun – I will bet that get rich trading scheme didn’t mention any of this? IF you are going to get through these emotions known as trading psychology, and all the different fears and forms that it can take on, it is going to be involved with your preparation, repetition, and understanding of that base setup plan, along with the knowledge that you have been able to paper trade it proficiently. No, it’s not the same as real money, and you will still have to become used to executing real time BUT at least you do have the confidence in knowing that what you are going to trade does work, and on a level in excess of simple profitability. It will take time for these emotions to leave you, and maybe some never will, but that is all right. It is not necessary to eliminate all emotion to be able to profitably trade, it is necessary to control them, and being able to have the self trust that although you can’t ‘know’ what is going to happen, you can ‘know’ what you are doing and that you will act as closely as possible to the intended ‘plan’. Does going through a learning process that includes paper trading still sound like a waste of time? No problem – there is still plenty of room in the 90 percent club. Work Ethic And The Fear Of Failure Again I am thinking about that question – how long is it going to take to profitably trade your method? I don’t know, are you really going to work your hardest? The fear of failure can take on many manifestations. What I have seen quite frequently, is how this fear is related to the ‘traders’ sense of self esteem and self worth – that failing at this, failing at anything, will make them ‘less’ of a person, and they can’t risk allowing this to happen. Consequently, they never work their hardest at learning to trade. They won’t put it all on the line, they always hold something back. Why? Because by doing this there will always be a ‘built in’ excuse for failing – IF I had really tried my hardest THEN I am sure that I could have done it. The result is obviously the same, but at least they don’t have to blame themselves or take a ‘hit’ on that precious ego. Is failing at learning to do something, and being a failure really the same thing? In my way of thinking, trying your very hardest and not being able to do something is just the way it goes some times. We aren’t going to be able to do everything we try, no matter how hard we work at it. Failure on the other hand is what I described – failing because you didn’t ‘step up’ and try your hardest, instead you ‘held back’ trying to protect yourself. You want to learn to day trade, check your ego at the door before you start – or you too can join the 90 percent club. Do You Still Want To Make Your Living Day Trading? Have I talked you out of becoming a day trader – do you still think this is a great ‘get rich quick’ way of making your living? Although it wasn’t my intentions to change anyone’s mind, if this is what has happened, then I am glad. Yes, trading can be ‘lucrative’, and yes, you can get ‘rich’ trading, but you have such a long road to travel before this can occur. Many people ‘say’ they know this, but they don’t really ‘believe’ it. They think that they will be different, they think that they will be the one that ‘bucks’ these odds BUT then they won’t go about it differently. If nothing else, it should be very clear, that if 90% of all day traders lose, then to have a chance at being successful, you obviously are going to have to approach this differently than the vast majority does. Go for it BUT focus on the process, have reasonable expectations of what is really involved, and then do what is necessary to learn how to trade – that 90% club is far too big.

         
    Strategy of forex trading

     

    Do you value your time and money? If yes, then Forex is an easy source that will help you to multiply your profit of your business. Forex currency trading is the modus operandi where you can have greater return on your investment. There is no doubt that Forex is considered to be the main player in the financial market. It is the convenient way where one can trade International Currency. Internet Forex trading Internet has made the online financial marketing especially the Forex Trading strategy is one of the easiest way for the traders. The forex market has boomed tremendously during the year time. Today you can complete the Forex trading strategy by just sitting at one place or home. In fact, buying and selling in this international market means that one should have knowledge about the present scenario of the foreign exchange market. In such cases, the forex signals plays a vital role by providing information about the time that will be suitable for investing money in the Foreign exchange market which in return would be profit making for the traders. Forex trading signal Forex signals are usually the recommendations from the seasoned experts of forex strategy system that will give you real-time advice. This Forex signals will help you to get the records of the present foreign exchange market. Forex trading signals will also help to contrive through the valleys, hills and other malfunction that can occur at any second of time. Forex trading signal will provide Forex signals that will update you about the changes that have taken place in the forex trading system. They will sends forex alerts through the help of emails, phone or messages. But the service of Forex strategy system is not free of cost your have to pay a certain amount or nominal subscription fee for effective functioning. In forex strategy system, the dealing of foreign currencies are actually in pair that means exchanging one currency over the other. For instance, the Forex trading strategy takes place amongst the four foremost currency pairs i. e. British Pound and USD (GBP/USD), Euro and USD (EUR/USD), Japanese Yen (USD/JPY) and Swiss Frank (USD/CHF) USD. In fact, there is a requirement for Forex trading strategy in order to dominate the international market. Forex aletrs is one of the vital forex trading strategies that are being applied in the global market. By taking the help of Forex trading strategy you can have a profitable venture and safe a great deal of money. Forex currency trading needs a lot of understanding, knowledge time and self restraint that will help a forex trader to earn huge profits by applying correct trading tactics. In Forex currency trading, you can avoid the conventional media of advertising and marketing. Forex currency trading is better option available in the financial market than any other stock market. If you are interested in starting any kind of new venture, then forex currency trading will be a good choice as it is reasonable. For more information on Forex, Forex signal, Forex strategy system, Forex trading signal, Forex trading strategy, Forex alerts and Currency trading, log onto official-forex-trading-system Tags: currency trading, forex strategy system, forex alerts, forex strategy system, Forex signals, Forex

         
    Technical analysis reading forex charts

     

    Price charts can be simple line graphs, bar graphs or even candlestick graphs. These are graphs that show prices during specified time frames. These time frames can be anywhere from minutes to years or any time interval in between. Line charts are the easiest to read, they will show you the broad overview of price movement. They only show the closing price for the specified interval, they make it very easy to pick out patterns and trends but do not provide the fine detail of a bar or candlestick chart. With a bar chart the length of a line displays the price spread during that time interval. The larger the bar is the greater the price difference between the high and low price during the interval. It is easy to tell at a glance if the price rose or fell because the left tab shows the opening price and the right tab the closing price. Then the bar will give you the price variation. When printed bar charts can be difficult to read but most software charts have a zoom function so you can easily read even closely spaced bars. Originally developed in Japan for analyzing candlestick contracts candlestick charts are very useful for analyzing FOREX prices. Candlestick charts are very similar to bar charts they both show the high, the low, open and close price for the indicated time. However the color coding makes it much easier to read a candlestick chart, normally a green candlestick indicates a rising price and a red one indicates a falling price. The actual candlestick shape in reference to the candlesticks around it will tell you a lot about the price movement and will greatly aid your analysis. Depending on the price spread various patterns will be formed by the candlesticks. Many of the shapes have some rather exotic names, but once you learn the patterns they are easy to pick out and analyze. Price charts are not usually used by themselves to get the full affect you need to supplement them with some technical indicators. Technical indicators are normally grouped into some pretty broad categories. Some of the more common ones used to monitor and track the market movement are: trend indicators, strength indicators, volatility indicators, and cycle indicators. Here is a list of some of the more commonly used indicators as well as a brief description. Average Directional Movement Index (ADX) – This index will help indicate if the market is moving in a trend in either direction and how strong the trend is. If a trend has readings in excess of 25 then this is considered a stronger trend. Moving Average Convergence/Divergence (MACD) – This shows the relationship between the moving averages which allows you to determine the momentum of the market. Any time that the signal line is crossed by the MACD it is considered to be a strong market. Stochastic Oscillator – This compares the closing price to the price range over a specific time frame to determine the strength or weakness of the market. If a currency has a stochastic of greater than 80 it is considered overbought. However if the stochastic is under 20 then the currency is considered undersold. Relative Strength Indicator (RSI) – This is a scale from 1 to 100 to compare the high and low prices over time. If the RSI rises above 70 it is considered overbought where as anything below 30 is considered oversold. Moving Average – This is created by comparing the average price for a time period to the average price of other time periods.

         
     
         
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