Forex Technical Analysis

When you decide to trade Forex, you want to make money as soon as possible. This often leads to jumping in the currency market with real money before you are ready. That is the quickest way to lose money and lose your confidence in Forex trading. But there is a way to start making money trading currency with little or no experience that is pretty safe. Sounds good, right?

Now, before we get started, I want to make one thing absolutely clear. I am not saying you should attempt or even want to trade Forex without experience. Forex trading is a skill based activity, which means the more experience you have and the better your trading skills, the better you will do. Trying to take the “easy” way out is only going to lead to you falling prey to products and services that promise easy profits, but that don’t deliver.

But this does not mean you have to DEMO trade for months or years before you trade for real money. As a matter of fact, demo trading is only good in the beginning. Your trading changes when you have real money on the line. And the only way to understand how you will react emotionally to losing and winning real money is to have money at risk in the real market. At some point, you have to gain experience with real money at risk, as this is the best education you can get.

Here is how you can get started trading in the live markets, and gaining the necessary experience you need, even when you are just starting out and have little experience. Use a Forex signals service that also has mentoring. This method allows you to get in the real market using a professional traders signals, but also learn why the trades were taken and how you react to real money at risk in the market.

In my opinion, this is the fastest and best way to get into the Forex market. Placing trades with real money takes confidence. You can either spend the time to gain this confidence in your system by practicing on demo and making the transition to live trading. Or you can follow a professional trader you trust and get into the market without experience, and then gain the experience you need in the live market. If there is mentoring involved, you can learn way more about trading by actually trading in the real market than you can practicing system after system.

Let me make this clear. You do need experience to succeed as a Forex trader. But the fastest and best way to get that experience is in the live market following a professional Forex traders signals and getting mentoring to understand trader psychology, money management and treating your trading like a business.

By: Edward Lomax

In forex trading there are two types of brokers. The market maker type of
broker and the ECN broker. Lets cover these individually.

Market Maker Broker:

Market maker brokers is a firm authorized to create and maintain a market in an instrument. They are
usually a brokerage firm or a bank who quotes both a buy and a sell price in a
financial instrument or commodity, hoping to make a profit on the turn or the
bid/offer spread. Market makers are very important for maintaining liquidity and
efficiency for the particular finanacial instrument, as they make markets by
taking a short or long position for a time, thus assuming some risk, in return
for hopefully making a small profit on the bid/ask/offer spread.

This type of broker usually takes the other side of the trade and usually widen the spread at times
especially in volatile times. These type of brokers usually advertise that they
charge no commission on trades but in fact make their commission on the spread
between the bid/ask ie 3-4 pips depending on the currency.

Although some of these brokers offering the market maker forex trading platform have wide spreads, some offer more narrower spreads as well as offer benefits such as extensive trading
resources, free trading platforms, news etc.

ECN Broker:

On the other side of the industry there are brokers that are ECN brokers. What
is ECN? ECN stands for Electronic Communications Network. These ECN brokers do
not have a dealing desk but offer a computerised market place consisting of
multiple market makers, banks. Traders can enter competing bids and offers into
the trading platform either inside and outside the spread thereby offering
better spreads, more liquidity. By trading through an ECN a currency trader
generally gets a better price than trading with a market maker. Therefore a
forex order is routed to the best bid/ask offer. The spreads are usually quite
small 0.5-2 pips. These type of brokers usually charge a small commission fee.
This small commission fee is how the ECN broker makes their commission, they
don’t take the other side of the order as the market maker does. They only match
and route your offer to the best bid/ask order in the electronic market place.

You become the market maker in using a ECN Forex broker. Place your order inside the spread or out and see if your order is taken up by one of the liquidity providers.

By: John Cas

What are Forex signals? Forex signals are paid services offered by some brokers and independent Forex annalists. Companies that offer forex signals monitor and analyze the market for you, providing you with their data via desktop alerts, email or even SMS and pager alerts.

Forex signal services analyze several factors when preparing their data. They do a technical analysis of market conditions and use a combination of indicators to identify trends and isolate profitable entry and exit points. They then send you the results via the venue of your choice and you can choose to use the signal in your own trading, or pass on it.

Most forex signal services offer signals for only a handful of the most popular currency pairs, such as EUR/USD, USD/JPY, GBP/USD, USD/CHF. Occasionally, you can find specialty services that offer signals for other lesser traded pairs. Forex signals can be costly, even upwards of $100 / mth. The benefit of subscribing to such a service is that they analyze and crunch the data for you, saving you time. It should be noted, however that using a signal service is no substitute for a proper education in the Forex markets. Signal services give you data, you still need to know what to do with it.

When shopping for a signal service, make sure that they provide you with historical data so that you can see their track record for yourself. Remember, that like any trader, Forex signal services also have loosing trades. You shouldn’t expect a signal service to be a sure ticket to instant Forex wealth, but rather look at them as another tool in your trading toolbox.

By: Amber Lowery

Introduction

It’s a sad fact that 90% of beginner Forex traders blow up their trading accounts in their first month of trading. The surprising thing is, this happens regardless of whether they have a profitable Forex trading system or not! Clearly, there’s more to making money in Forex trading than having a profitable Forex trading system. What most beginner Forex traders don’t realize is that when you’re just getting started in Forex, having a good Forex money management strategy is far more important than having a system with huge returns. By the end of this article, you’ll know how to apply the best Forex money management strategies for consistent, safe returns from your system.

The Best Forex Money Management Strategy

Even if you have the worst Forex trading system in the world, you won’t blow up your trading account if you have a good Forex money management strategy. On the other hand, without a good Forex money management strategy, you could have the best Forex trading system in the world and it wouldn’t even matter. That’s how important money management in Forex is!

Before we get into the nuts and bolts of money management in Forex, you need to understand how important it is to protect your capital when you’re trading Forex. Unfortunately, most beginner Forex traders start out with too little capital. They try to turn $1,000 into $100,000 by being extremely aggressive and risking a big chunk of their capital on their trades, and when the inevitable loser comes along their account take a huge hit. It’s like taking two steps forward and three steps backwards every couple of days: frustrating and unsustainable in the long term.

Believe it or not, the best Forex money management strategy is to dial your risk per trade way down to between 2-4% of your capital. This is the best cutting edge Forex money management strategy that all the big banks and hedge funds apply for all their traders, and I highly recommend that you apply it as well. It’s called the % Capital Strategy, and it provides the optimum growth of your trading account with almost zero risk of blowing up your trading account entirely.

An Example Of Good Money Management In Forex

Here’s how it works. If you’re really conservative, go with 2%, and if you’re really aggressive, go with 4%. Any higher or lower and you’re literally throwing money away. For an account size of $10,000, using a conservative setting of 2%, your maximum risk per trade would be $200. That means that if you have a stop 20 pips away from your entry, then you’re allowed to take a maximum of 1 full contract.

A key decision that you need to make early on is whether you want to re-invest your profits or not. Obviously, re-investing your profits will allow you to leverage the power of compounding returns, while withdrawing your profits will not. By re-investing your profits, you can literally double or even triple your profits in a year! If you decide to re-invest your profits, then you’ll have to update your risk per trade allocation and your position sizes at regular intervals. I would recommend updating your position sizes every 5-10 trades, so that you’re getting the best compound growth of your trading account.

It’s important to remember that you’re still going to need a proven, profitable Forex trading system to make a consistent Forex income. Even the best Forex money management strategy will not make a bad trading system profitable, but without a good Forex money management strategy it’s impossible to make a lasting Forex income. Be sure to have both of these two essential Forex trading elements in place, and you can be sure of your Forex trading success!

By: Thad B

There is so much to know when it comes to currency trading. Having knowledge about the basics in Forex trading is not enough. You must become aware of the types of trading that people use to invest their money. Some of the richest people in the world have found the form of trading that would best suit their interest which is why they have found success in it. Hence it is essential that you go through the different style of trading and determine the one in which you are comfortable and your goals are met.

Of all the trading styles fundamental analysis trading is the most basic form and a number of trading styles are grouped under the subcategories of fundamental analysis trading. The basis for making a decision is not based on facts and data rather it works on intuition. In this type of trading the actual real world events are studied and a prediction is made on how the Forex market would respond due to these events.

Technical analyst trading on the other hand relies on hard-core facts to predict the market. The importance is done on the trends projected by graphs and data rather than a person’s intuition to make a decision. Though this type of trading may seem to be better than Fundamental Analyst trading there’s every chance that the market might not respond as expected.

Range Trading profit is made by purchasing technical levels of support and then selling the technical levels of resistance. While in Swing Trading the profit is made during a short to medium market swings and in Position Trading the profit is made for a long period of time by choosing to stay in one single trade.

Scalping is a popular choice among day traders. In scalping the investor makes a number of small trades within a short span of time and waits for its value to rise. In this method the person who has purchased these trades does not stay with them for long and sell them before their value starts dipping hence the trades of this style usually last for only few minutes.

In Auto trading the trends of the market are predicted by programs and hence humans are not personally required to make a decision which is however not the case in Discretionary trading where for each transaction to happen a decision must be made by the humans.

The above discussed styles are some of the popular styles that are prevalent in Forex trading.

By: Elwilliams W