By Jeff C Daniels
Before, forex trading was limited among financial institutions, professional traders and other banking industries. Since the government of the United States passed a law about forex, this market is now open to all individuals who aspire for a good trading career. With the advent of modern technology, anyone can easily trade by just having a computer with a high-speed Internet connection. Today, currency day trading is among the most popular online businesses worldwide. If you're interested in this kind of business, here's a brief guide to help you get started.
Currency day trading is a term used to define the buying and selling of trades completed within a twenty-four hour time duration. The implication of this kind of trading is that, all trading activities are done within a day and no single stock must be preserved overnight. What used to be a business for a wealthy man has now become a market for an average investor. Forex day trading enables a trader with the gift of buying good currencies. Just as long as the trades are finished during the day, a trader can have an access to the investments that can reach up to 200 times of what he originally owns.
In this kind of forex trading, your trading floor can be of any form. The truth is, there aren't any exchange regulations in currency trading as compared to the stocks and futures trading. In currency day trading, there are no identified agencies that guarantee the trades and acts as the intermediary when anything goes wrong on the trades. Here, currency traders are independent and they need to trade among themselves depending on the financial standing and credit requirements of the other traders. As what they say, the only seal for this kind of deal is the proverbial handshake between two traders.
When you first look at it, you may notice that some traders leave the other traders hanging in the air confused, frustrated and bewildered. Some people think that this kind of setup will only lead to nothing. However, a lot of people have also proven the wonderful thing about forex day trading. Their testimonies can prove that indeed this kind of trading can make a decent amount of many when done properly.
You should know that forex day trading involves a lot of risks and many traders fail in this form of trading, but there are also some ways you can benefit from it. For you to know the best methods to deal with forex day trading, you should know first why a lot of people end up as a failure. This happens because the market moves on a daily basis and you can never get the odds to your favor. Traders fail because they are too aggressive. They think they can handle the market fairly well and they can control the movements, but that is just downright ridiculous. What you can do instead is, to check on the small prints. All you need is to get the proper time frame that can give you a valid data that you can use as you enter the forex market. With the proper timing and hard work, you can surely generate a good amount of income.
Thursday, September 3, 2009
Wednesday, August 26, 2009
Day Trading the Currency Market - Extreme Danger to Avoid
By Philip Gegan
We're all led into day trading the currency market when we first come across currency trading, or forex, as a means of making money online. The leading promoters of information and services in this field have glitzy web sites full of color, pictures of swimming pools and sports cars, and assurances that you too can join in the fun.
But there's danger lurking in the water, and I'm going to show you what it is and how to avoid it.
The currency market can only be day traded in two ways - spread betting or fixed odds trading. Both systems have the advantage that in most countries any profits are tax free as they are deemed to be the winnings of a bet. This fact is emphasised on all the sales pages for systems, software, services and "robots" relating to forex.
Let's deal with fixed odds betting first. This is where you go to a web site like betonmarkets.com and place a bet, for example, that USD/JPY will be lower than its current level at close of trading on a particular day. Typically this would be the current day, or in one, three or five trading days into the future.
This has the advantage over spread betting in that you can't be stopped out before the bet expires, so if you're right in your prediction it doesn't matter about the volatility in the meantime. And if you want to keep to day trading then you simply select the current day for closing the bet. You'll see presently that this is pure gambling and in the long run the bookmaker always wins.
Spread betting involves a spread of, typically, two to six points, stop loss levels and probably limit orders. This is what nearly all newcomers are directed to do by all the forex systems and robots out there. But day trading the currency market on a spread betting account is a sure way to lose all your money just as much as fixed odds betting. And here's why.
The currency markets are extremely volatile and are dominated by the really big players. We're told that forex is a huge market - over $3 trillion per day being traded by traders from all over the world 24 hours a day - and it's just too big to be manipulated by anyone. That's not true. It's huge all right, but it can be and is manipulated by just a few big players.
Apart from a few private traders who have proven spread betting strategies and who often trade under the mentorship of an expert, private forex traders have generally limited capital and last only a few months before they lose all their money. There's a rapid turnover of new traders as there are always people new to forex arriving, ignorant of the dangers and thinking they've found the new El Dorado.
The rest of the forex market consists of professional traders acting mostly on behalf of big banks. There are in fact only about 20 huge banking corporations that, through their employee traders, dominate the market and can cause rapid and large fluctuations in the prices. Their actions often cause movements in price that defy the charts and indicators everyone else is relying on.
The result is that small, private traders frequently lose money on trades that should have been safe and profitable. Even experienced, professional private traders are frequently caught out. To ride out the volatility you need massive stop loss levels of the size that traders with a limited amount to trade with, and therefore to risk, simply cannot afford.
The currency market is like an ocean in a storm. The huge liners can sail through it and hardly notice there's a storm going on, but the small yachts and dinghies get tossed around and overturned very easily.
There are much easier financial markets to trade. Trading stocks with covered warrants and Exchange Traded Funds may not sound very exciting, but it's much easier to make money with them, even if you usually have to wait a few weeks, rather than a few hours. And if you must stick to trading the currency market then your best bet is to find someone who is an expert financial trader himself and see if you can copy his trades and methods.
We're all led into day trading the currency market when we first come across currency trading, or forex, as a means of making money online. The leading promoters of information and services in this field have glitzy web sites full of color, pictures of swimming pools and sports cars, and assurances that you too can join in the fun.
But there's danger lurking in the water, and I'm going to show you what it is and how to avoid it.
The currency market can only be day traded in two ways - spread betting or fixed odds trading. Both systems have the advantage that in most countries any profits are tax free as they are deemed to be the winnings of a bet. This fact is emphasised on all the sales pages for systems, software, services and "robots" relating to forex.
Let's deal with fixed odds betting first. This is where you go to a web site like betonmarkets.com and place a bet, for example, that USD/JPY will be lower than its current level at close of trading on a particular day. Typically this would be the current day, or in one, three or five trading days into the future.
This has the advantage over spread betting in that you can't be stopped out before the bet expires, so if you're right in your prediction it doesn't matter about the volatility in the meantime. And if you want to keep to day trading then you simply select the current day for closing the bet. You'll see presently that this is pure gambling and in the long run the bookmaker always wins.
Spread betting involves a spread of, typically, two to six points, stop loss levels and probably limit orders. This is what nearly all newcomers are directed to do by all the forex systems and robots out there. But day trading the currency market on a spread betting account is a sure way to lose all your money just as much as fixed odds betting. And here's why.
The currency markets are extremely volatile and are dominated by the really big players. We're told that forex is a huge market - over $3 trillion per day being traded by traders from all over the world 24 hours a day - and it's just too big to be manipulated by anyone. That's not true. It's huge all right, but it can be and is manipulated by just a few big players.
Apart from a few private traders who have proven spread betting strategies and who often trade under the mentorship of an expert, private forex traders have generally limited capital and last only a few months before they lose all their money. There's a rapid turnover of new traders as there are always people new to forex arriving, ignorant of the dangers and thinking they've found the new El Dorado.
The rest of the forex market consists of professional traders acting mostly on behalf of big banks. There are in fact only about 20 huge banking corporations that, through their employee traders, dominate the market and can cause rapid and large fluctuations in the prices. Their actions often cause movements in price that defy the charts and indicators everyone else is relying on.
The result is that small, private traders frequently lose money on trades that should have been safe and profitable. Even experienced, professional private traders are frequently caught out. To ride out the volatility you need massive stop loss levels of the size that traders with a limited amount to trade with, and therefore to risk, simply cannot afford.
The currency market is like an ocean in a storm. The huge liners can sail through it and hardly notice there's a storm going on, but the small yachts and dinghies get tossed around and overturned very easily.
There are much easier financial markets to trade. Trading stocks with covered warrants and Exchange Traded Funds may not sound very exciting, but it's much easier to make money with them, even if you usually have to wait a few weeks, rather than a few hours. And if you must stick to trading the currency market then your best bet is to find someone who is an expert financial trader himself and see if you can copy his trades and methods.
Thursday, August 13, 2009
Currency Day Trading is a Forex Strategy Also Called Forex Scalping and is Taught in Forex Made EZ
By William Alheim Jr
Currency day trading is a Forex Strategy, that without a question one of my favorite ways of making money in the markets. One of the principle reasons for this is that your risk of taking large loses is greatly reduced utilizing this approach to investing. Forex scalping allows you to reduce your risk because you are always in control of your position, since the entire time you are invested you are at your computer and are able to react to any adverse conditions that might suddenly appear. This method of trading is taught at its highest level in a currency course called Forex Made E Z.
Please don't confuse low risk with low returns. This approach to trading to the contrary, offers large returns if you are able to perfect the implementation of this practice. The principle reason it offers the possibility of making large consistent returns is that your losing trades are for the most part very small when they do occur and the losing occurrence rate is also kept at a minimum.
This is a perfect way for a new investor to enter the market and gain confidence that you really can make money investing in the currency markets. It is perfect because your risk is low and your winning percentage is high. Although, you're Return on Investment (ROI) of any individual trade is not that high, when your take time to add up your total ROI at the end of the month, don't be surprised if you double your account and maybe even more than that.
The reason I love Forex Made E Z is that it takes what is really a complex trading concept and breaks it down to each individual step an investor must do to successful trade with it. The currency course is very easy to understand and even simpler to trade with.
This program has been around for years and has thousands of former students that swear by the class.
With a doubt, you can make big money currency day trading and it is also the perfect Forex strategy to employ for the investor first entering the market. I don't think you will find another class that teaches Forex scalping in a simpler, easy to understand fashion than does Forex Made E Z. If you want a quick easy way to enter the markets and start making money right away it might not be a bad idea to research this class a little, I think you will be glad you did.
Currency day trading is a Forex Strategy, that without a question one of my favorite ways of making money in the markets. One of the principle reasons for this is that your risk of taking large loses is greatly reduced utilizing this approach to investing. Forex scalping allows you to reduce your risk because you are always in control of your position, since the entire time you are invested you are at your computer and are able to react to any adverse conditions that might suddenly appear. This method of trading is taught at its highest level in a currency course called Forex Made E Z.
Please don't confuse low risk with low returns. This approach to trading to the contrary, offers large returns if you are able to perfect the implementation of this practice. The principle reason it offers the possibility of making large consistent returns is that your losing trades are for the most part very small when they do occur and the losing occurrence rate is also kept at a minimum.
This is a perfect way for a new investor to enter the market and gain confidence that you really can make money investing in the currency markets. It is perfect because your risk is low and your winning percentage is high. Although, you're Return on Investment (ROI) of any individual trade is not that high, when your take time to add up your total ROI at the end of the month, don't be surprised if you double your account and maybe even more than that.
The reason I love Forex Made E Z is that it takes what is really a complex trading concept and breaks it down to each individual step an investor must do to successful trade with it. The currency course is very easy to understand and even simpler to trade with.
This program has been around for years and has thousands of former students that swear by the class.
With a doubt, you can make big money currency day trading and it is also the perfect Forex strategy to employ for the investor first entering the market. I don't think you will find another class that teaches Forex scalping in a simpler, easy to understand fashion than does Forex Made E Z. If you want a quick easy way to enter the markets and start making money right away it might not be a bad idea to research this class a little, I think you will be glad you did.
Tuesday, August 4, 2009
Day Trading Forex Currency - Simple Tips and Advice to Help You
By Ian Drew
Day trade as the name suggests involves trade transaction of TODAY and just today only. There is no scope for yesterday, tomorrow or any other day in day trade. In day trade the trader books profit by capturing intraday price swings.
Day trading forex currency can be extremely risky due to the inherent nature of the forex market. Forex market is an extremely volatile market where you can often witness large currency movements in matter of minutes. However if you are disciplined and are willing to follow the rules of the game you can definitely profit from day trading.
Here are some useful tips to get you started in day trading :
- Learn and be thorough in forex concepts and operations of the forex market. Keep yourself abreast about all important international news which may impact currency movements at all times.
- Not every trade transaction will necessarily translate into profits. Hence devise a strategy for yourself and stick to it. Driven by greed, do not alter your strategy unless absolutely essential.
- In forex terminology currency volatility denotes the amount of price change with relation to time. There are various price swings intra day in volatile currency pairs. These swings are in fact the opportunities, which you as a day trader must be able to identify and cash on to book profits.
- When day trading forex currency look for volatility in conjunction with liquidity. Liquid markets provide good order fills, which will help you make smaller profits. The most liquid currency pairs are the ones that are the most volatile. The major liquid pairs are EUR/USD, GBP/USD, USD/JPY and USD/CHF. These pairs provide best volatility and hence great opportunity for you to day trade.
Lastly follow the golden rule of any trading- resist temptation. Irrespective of price swings stick to your pre determined stop loss levels and stay disciplined. Adhere to your strategy and focus on an appropriate time frame chart.
There are various theories on time frame analysis. Some day traders follow the principle that larger time frame analysis enables them to select better day trades. There are others who find this a time consuming exercise, which does not add much value. Depending upon your exposure to the forex market you can choose a method most suited to you.
Day trade as the name suggests involves trade transaction of TODAY and just today only. There is no scope for yesterday, tomorrow or any other day in day trade. In day trade the trader books profit by capturing intraday price swings.
Day trading forex currency can be extremely risky due to the inherent nature of the forex market. Forex market is an extremely volatile market where you can often witness large currency movements in matter of minutes. However if you are disciplined and are willing to follow the rules of the game you can definitely profit from day trading.
Here are some useful tips to get you started in day trading :
- Learn and be thorough in forex concepts and operations of the forex market. Keep yourself abreast about all important international news which may impact currency movements at all times.
- Not every trade transaction will necessarily translate into profits. Hence devise a strategy for yourself and stick to it. Driven by greed, do not alter your strategy unless absolutely essential.
- In forex terminology currency volatility denotes the amount of price change with relation to time. There are various price swings intra day in volatile currency pairs. These swings are in fact the opportunities, which you as a day trader must be able to identify and cash on to book profits.
- When day trading forex currency look for volatility in conjunction with liquidity. Liquid markets provide good order fills, which will help you make smaller profits. The most liquid currency pairs are the ones that are the most volatile. The major liquid pairs are EUR/USD, GBP/USD, USD/JPY and USD/CHF. These pairs provide best volatility and hence great opportunity for you to day trade.
Lastly follow the golden rule of any trading- resist temptation. Irrespective of price swings stick to your pre determined stop loss levels and stay disciplined. Adhere to your strategy and focus on an appropriate time frame chart.
There are various theories on time frame analysis. Some day traders follow the principle that larger time frame analysis enables them to select better day trades. There are others who find this a time consuming exercise, which does not add much value. Depending upon your exposure to the forex market you can choose a method most suited to you.
Saturday, July 4, 2009
Currency Day Trading - Are Your Stops Killing You?
By Michael A Jones
Currency day trading generally involves moving in and out of the market within a short time, from a few minutes when the market is moving quickly to a few hours, in order to take a small number of pips, perhaps 5 to 20 in the case of the scalper, or 25-40 in the case of a longer term move.
Wrongly positioned stops can really cause trouble for the newer trader and result in needless losses which in time can kill the account.
Five Guidelines
Here are five guidelines when setting stops for currency day trading which can help avoid much grief:
1. Don't Set Your Stop Too Close To Entry
Don't set your stop too close to price action so a spike in price can take out the trade before price continues in the direction the trader anticipated in the first place. Allow some breathing space.
2. Don't Make The Stop Too Large
Don't make the stop too large in relation to the profit target resulting in a poor risk reward ratio. (see next point)
3. Don't Set An Arbitrary Stop
Rather than setting the stop according to an arbitrary number of pips such as 20 or 25, study your charts and observe the next levels of support or resistance above or below your entry point and set your stops accordingly.
It could be by setting your stop at 25 you are just below a key level of resistance which price is very likely to come back and test. It may just touch the resistance level going past your stop and then continue on down. How frustrating when you entered a short trade and you were right all along as to direction. Much better to put your stop the other side of the resistance line so it acts as a protection level.
Of course, if doing that means your stop will be 30 or 35 pips away from your entry level you may choose to sit on the sidelines and let this one go. The risk would be too great in relation to your profit target. What's the sense of risking 35 pips to try and gain 20?
4. Avoid Round Numbers
Another common error newer traders make is to set a stop at a round number. Round numbers are psychological barriers in the minds of many traders and price often will come and test a round figure.
Some currency pairs, e.g. GBP/USD seem to react frequently when reaching key levels such as 1.9700, 1.9800 etc. It makes no sense to put your stop at that number as there is a high chance price will just come back to touch it or go beyond it by a few pips before reversing.
5. Don't Move Your Stop Once The Trade Is In
A major mistake newer traders make is moving the stop once the trade is in progress. This really is a NO NO! As price comes dangerously close to the stop. the newer trader gets nervous and thinks, "I didn't leave enough breathing space. I'll just move it back another 5 pips." This habit spells disaster when currency day trading.
Think out your trade carefully before pulling the trigger. Spend just as much time calculating the stop position as you do the entry point. Once you have set the trade with carefully researched entry, stop and limit points, put it in, and leave it!
Just mastering the self-discipline to follow this guideline strictly will save you so much grief in the future.
Handle Losses Professionally
Finally, if your stop is taken out, learn to handle the loss in a professional way. Losing is part of the currency day trading scenario. You have to get used to it. Look upon it as paying the rent!
As long as you stick to your solid currency day trading system you will have more winners than losers over time and your account will gradually and consistently grow.
Currency day trading generally involves moving in and out of the market within a short time, from a few minutes when the market is moving quickly to a few hours, in order to take a small number of pips, perhaps 5 to 20 in the case of the scalper, or 25-40 in the case of a longer term move.
Wrongly positioned stops can really cause trouble for the newer trader and result in needless losses which in time can kill the account.
Five Guidelines
Here are five guidelines when setting stops for currency day trading which can help avoid much grief:
1. Don't Set Your Stop Too Close To Entry
Don't set your stop too close to price action so a spike in price can take out the trade before price continues in the direction the trader anticipated in the first place. Allow some breathing space.
2. Don't Make The Stop Too Large
Don't make the stop too large in relation to the profit target resulting in a poor risk reward ratio. (see next point)
3. Don't Set An Arbitrary Stop
Rather than setting the stop according to an arbitrary number of pips such as 20 or 25, study your charts and observe the next levels of support or resistance above or below your entry point and set your stops accordingly.
It could be by setting your stop at 25 you are just below a key level of resistance which price is very likely to come back and test. It may just touch the resistance level going past your stop and then continue on down. How frustrating when you entered a short trade and you were right all along as to direction. Much better to put your stop the other side of the resistance line so it acts as a protection level.
Of course, if doing that means your stop will be 30 or 35 pips away from your entry level you may choose to sit on the sidelines and let this one go. The risk would be too great in relation to your profit target. What's the sense of risking 35 pips to try and gain 20?
4. Avoid Round Numbers
Another common error newer traders make is to set a stop at a round number. Round numbers are psychological barriers in the minds of many traders and price often will come and test a round figure.
Some currency pairs, e.g. GBP/USD seem to react frequently when reaching key levels such as 1.9700, 1.9800 etc. It makes no sense to put your stop at that number as there is a high chance price will just come back to touch it or go beyond it by a few pips before reversing.
5. Don't Move Your Stop Once The Trade Is In
A major mistake newer traders make is moving the stop once the trade is in progress. This really is a NO NO! As price comes dangerously close to the stop. the newer trader gets nervous and thinks, "I didn't leave enough breathing space. I'll just move it back another 5 pips." This habit spells disaster when currency day trading.
Think out your trade carefully before pulling the trigger. Spend just as much time calculating the stop position as you do the entry point. Once you have set the trade with carefully researched entry, stop and limit points, put it in, and leave it!
Just mastering the self-discipline to follow this guideline strictly will save you so much grief in the future.
Handle Losses Professionally
Finally, if your stop is taken out, learn to handle the loss in a professional way. Losing is part of the currency day trading scenario. You have to get used to it. Look upon it as paying the rent!
As long as you stick to your solid currency day trading system you will have more winners than losers over time and your account will gradually and consistently grow.
Tuesday, June 23, 2009
Currency Day Trading - Why Currency Day Traders Lose and a Better Way to Trade
By Sonia Kristina
Currency day trading looks low risk and high reward to most traders but it is impossible to win at it and you will end up losing your equity. This article will look at why you will lose and a better short term method of trading...
So why is currency day trading doomed to failure?
The reason is obvious - all moves in daily time frames are of a totally random nature. You simply cannot judge what millions of traders are going to do in minutes or hours, it's ridiculous.
You Can't Get the Odds in Your Favour!
There are no support or resistance levels that can be trusted, you can't get the odds in your favour and that means a wipe out at some point.
There are however many vendors online who will tell you that you can win at day trading and they even present track records to prove it - but these track records are never real , just a back test.
Simply check the small print and you will find the words "simulated in hindsight" somewhere and that means - they have made no money for real and if you think a simulation, will give the same results in real time think again - it won't.
If you want to trade with a short term strategy you need to get a time frame which gives you valid data and where you can use tools on currency trading charts which will work and the best method is - currency swing trading.
Currency Swing Trading V Day Trading
Currency swing trading systems rely on catching moves from a few days to about a week and they simply trade into overbought and oversold levels. Its simple to understand, gives you plenty of action and can be very profitable.
So forget about currency day trading systems and if you want to trade short term, get the odds on your side and use a swing trading system and you can enjoy currency trading success with it.
Currency day trading looks low risk and high reward to most traders but it is impossible to win at it and you will end up losing your equity. This article will look at why you will lose and a better short term method of trading...
So why is currency day trading doomed to failure?
The reason is obvious - all moves in daily time frames are of a totally random nature. You simply cannot judge what millions of traders are going to do in minutes or hours, it's ridiculous.
You Can't Get the Odds in Your Favour!
There are no support or resistance levels that can be trusted, you can't get the odds in your favour and that means a wipe out at some point.
There are however many vendors online who will tell you that you can win at day trading and they even present track records to prove it - but these track records are never real , just a back test.
Simply check the small print and you will find the words "simulated in hindsight" somewhere and that means - they have made no money for real and if you think a simulation, will give the same results in real time think again - it won't.
If you want to trade with a short term strategy you need to get a time frame which gives you valid data and where you can use tools on currency trading charts which will work and the best method is - currency swing trading.
Currency Swing Trading V Day Trading
Currency swing trading systems rely on catching moves from a few days to about a week and they simply trade into overbought and oversold levels. Its simple to understand, gives you plenty of action and can be very profitable.
So forget about currency day trading systems and if you want to trade short term, get the odds on your side and use a swing trading system and you can enjoy currency trading success with it.
Monday, June 15, 2009
Currency Day Trading - My 5 Biggest Mistakes
By Michael A Jones
Currency day trading is 90% mental! I had heard this from many professional traders but when you start as a novice in the Forex world you can fail to realize the significance of that statement.
Of course, it is necessary to develop analysis skills using a variety of technical indicators. Risk management and understanding of the market is also crucial if anyone is to succeed at currency day trading.
But the greatest challenge of all is developing mental discipline and emotional control. After many months of practicing in a demo account and testing the water cautiously with a few hundred dollars in a mini account, I studied my main trading faults and documented them.
Here are my 5 biggest mistakes. Perhaps you can learn from them too!
1. ANXIETY & DESPERATION - LEARN TO RELAX!
Feeling a compulsion to trade - its poison!
If good opportunities were missed the day before, or if one or two days have been quiet with no trades, then you need to carefully monitor your emotional and mental state.
If feelings of desperation begin to rise take a step back and enforce strict mental discipline - keep to your strategy, only look for safe trades, wait for the right setup!
2. IMPATIENCE - LEARN TO WAIT!
How many times do we enter trades prematurely? Wait until the setup really sets up!
Don't be afraid of losing an initial big run because:
- Its not worth the risk
- There will always be another opportunity
- Catch the next retrace when it is much safer
3. LOSING CONCENTRATION AFTER A LOSS - KEEP FOCUSED
There is a danger after a losing trade to either:
Shut the mind down so you become closed to further opportunities that day
Act in desperation by impetuously entering an ill-thought out trade soon after to try and regain losses
After a losing trade muster up all your mental resources and detach yourself from it. Imagine standing on a chair and shouting at the top of your voice: "NEXT!"
4. THE MENTAL RUT - BE READY TO SWITCH DIRECTION
If price goes opposite to what your initial analysis told you, look at charts with new eyes following the direction of price.
It can help to maximize a chart on your screen and look at it from across the other side of the room. Get your mind out of the one direction rut and look at the chart afresh looking for new opportunities in the new direction.
5. FAILING TO TAKE REASONABLE PROFITS
How many times I have been looking at a profit of 20 to 25 pips on the screen only to see it evaporate before my eyes because I was hoping for a big move and decided to hold on.
Currency day trading by nature revolves around smaller price movements. Often price will get to 20 or 25 pips and then retrace. It may then resume its direction or it may not.
I have learned it is important to take the first profit early, and then let an additional lot or position(s) run to a more ambitious profit target. At the same time as taking out the first early profit, the stop is moved to protect the remaining positions.
I used to put myself through much mental anguish from failing to take a 20 or 25 pip profit. Price would come back to perhaps 5 or 3 or 2 pips and now your emotions come rushing in regretting you didn't take the profit that was offered to you and hoping against hope price will return and even go on further for the big one!
Save yourself a lot of mental exhaustion by taking a reasonable profit early after examining the charts to see where the first major level of support or resistance is likely to be.
Identify And Act
I have heard it said many times that currency day trading is more an art than a science. Each individual interprets the charts according to their own perception. There are no rigid, hard and fast rules. Having said that, a solid currency day trading strategy is necessary obviously.
However, it must be backed up by strict mental discipline and control over emotions. See if you identify with any of my 5 biggest mistakes listed above and take the appropriate action!
Currency day trading is 90% mental! I had heard this from many professional traders but when you start as a novice in the Forex world you can fail to realize the significance of that statement.
Of course, it is necessary to develop analysis skills using a variety of technical indicators. Risk management and understanding of the market is also crucial if anyone is to succeed at currency day trading.
But the greatest challenge of all is developing mental discipline and emotional control. After many months of practicing in a demo account and testing the water cautiously with a few hundred dollars in a mini account, I studied my main trading faults and documented them.
Here are my 5 biggest mistakes. Perhaps you can learn from them too!
1. ANXIETY & DESPERATION - LEARN TO RELAX!
Feeling a compulsion to trade - its poison!
If good opportunities were missed the day before, or if one or two days have been quiet with no trades, then you need to carefully monitor your emotional and mental state.
If feelings of desperation begin to rise take a step back and enforce strict mental discipline - keep to your strategy, only look for safe trades, wait for the right setup!
2. IMPATIENCE - LEARN TO WAIT!
How many times do we enter trades prematurely? Wait until the setup really sets up!
Don't be afraid of losing an initial big run because:
- Its not worth the risk
- There will always be another opportunity
- Catch the next retrace when it is much safer
3. LOSING CONCENTRATION AFTER A LOSS - KEEP FOCUSED
There is a danger after a losing trade to either:
Shut the mind down so you become closed to further opportunities that day
Act in desperation by impetuously entering an ill-thought out trade soon after to try and regain losses
After a losing trade muster up all your mental resources and detach yourself from it. Imagine standing on a chair and shouting at the top of your voice: "NEXT!"
4. THE MENTAL RUT - BE READY TO SWITCH DIRECTION
If price goes opposite to what your initial analysis told you, look at charts with new eyes following the direction of price.
It can help to maximize a chart on your screen and look at it from across the other side of the room. Get your mind out of the one direction rut and look at the chart afresh looking for new opportunities in the new direction.
5. FAILING TO TAKE REASONABLE PROFITS
How many times I have been looking at a profit of 20 to 25 pips on the screen only to see it evaporate before my eyes because I was hoping for a big move and decided to hold on.
Currency day trading by nature revolves around smaller price movements. Often price will get to 20 or 25 pips and then retrace. It may then resume its direction or it may not.
I have learned it is important to take the first profit early, and then let an additional lot or position(s) run to a more ambitious profit target. At the same time as taking out the first early profit, the stop is moved to protect the remaining positions.
I used to put myself through much mental anguish from failing to take a 20 or 25 pip profit. Price would come back to perhaps 5 or 3 or 2 pips and now your emotions come rushing in regretting you didn't take the profit that was offered to you and hoping against hope price will return and even go on further for the big one!
Save yourself a lot of mental exhaustion by taking a reasonable profit early after examining the charts to see where the first major level of support or resistance is likely to be.
Identify And Act
I have heard it said many times that currency day trading is more an art than a science. Each individual interprets the charts according to their own perception. There are no rigid, hard and fast rules. Having said that, a solid currency day trading strategy is necessary obviously.
However, it must be backed up by strict mental discipline and control over emotions. See if you identify with any of my 5 biggest mistakes listed above and take the appropriate action!
Saturday, May 16, 2009
The Secret to Successfully Day Trading Forex Currency - Profit in the Forex Market
By Freddy Jones
Successfully day trading forex currency can be incredibly profitable or it can knock you out extremely fast. Don't miss out on this vastly profitable opportunity, but don't leave yourself open to risks, either.
Currency trading systems are the ideal choice for those who want to keep up with the fast pace of the forex market. It covers many many long ours due to there being several international markets involved. So, the average trader is unable to manage their campaigns around the clock. These programs have a faster reaction time and can better gauge trend changes than any trader can, so they are effective for making money in the forex market. It makes very calculated decisions about trades, and you end up on the winning side more often.
These systems are designed to find profitable trends, enact trades, win, and then do it over and over again. You make money this way, and it doesn't even require you to intervene. Some of the latest trading systems have a near 100% winning rate, and as they improve, the rates will only go up. There is no human trader that could say that, and those brokers who come close charge extremely high fees to do so. Currency trading systems are therefore the most affordable option, especially when you're just starting out.
When searching for a trading system, check the company very well. Make sure, if nothing else, that they offer a money back guarantee. So, at least if you don't make any money with the system, you won't have lost out on anything.
Successfully day trading forex currency can be incredibly profitable or it can knock you out extremely fast. Don't miss out on this vastly profitable opportunity, but don't leave yourself open to risks, either.
Currency trading systems are the ideal choice for those who want to keep up with the fast pace of the forex market. It covers many many long ours due to there being several international markets involved. So, the average trader is unable to manage their campaigns around the clock. These programs have a faster reaction time and can better gauge trend changes than any trader can, so they are effective for making money in the forex market. It makes very calculated decisions about trades, and you end up on the winning side more often.
These systems are designed to find profitable trends, enact trades, win, and then do it over and over again. You make money this way, and it doesn't even require you to intervene. Some of the latest trading systems have a near 100% winning rate, and as they improve, the rates will only go up. There is no human trader that could say that, and those brokers who come close charge extremely high fees to do so. Currency trading systems are therefore the most affordable option, especially when you're just starting out.
When searching for a trading system, check the company very well. Make sure, if nothing else, that they offer a money back guarantee. So, at least if you don't make any money with the system, you won't have lost out on anything.
Tuesday, May 12, 2009
Currency Day Trading
By Ken Marlborough
The buying or selling of a currency within the same calendar day is known as currency day trading. In this case, all trades are completed in the same day and nothing is held overnight. The United States passed laws six years ago that enabled small investors and common men to participate in currency day trading; previously, only large banks and financial institutions and millionaires were engaged in the practice.
Industry analysts believe that currency day trading is a well-kept secret of the rich and powerful who have the power to control all the banks, corporations and foundations throughout the world. In currency day trading, the traders have vast buying power. For instance, it enables traders to use $1 to control an investment worth $200, and $500 to control $100,000.
The professional day traders are divided into two primary categories, those who work alone and those who work for a larger institution. Most of the traders work for a larger institution as they are given access to greater resources.
Large amounts of capital and leverage, expensive analytical software, and a direct line to a dealing desk are some of the facilities given to the trader who work with big companies. On the other hand, individual traders mostly manage other people’s accounts or just trade their own. As these people have limited resource access, it prevents them from competing directly with institutional day traders.
There is a lot of software with which a person can learn currency day trading practices. One needs to be a keen learner with an Internet connection. Websites such as Blackjack Trader.com, Choice Daytraders and CompuTrade are some of the portals through which a person can learn more about currency day trading.
The buying or selling of a currency within the same calendar day is known as currency day trading. In this case, all trades are completed in the same day and nothing is held overnight. The United States passed laws six years ago that enabled small investors and common men to participate in currency day trading; previously, only large banks and financial institutions and millionaires were engaged in the practice.
Industry analysts believe that currency day trading is a well-kept secret of the rich and powerful who have the power to control all the banks, corporations and foundations throughout the world. In currency day trading, the traders have vast buying power. For instance, it enables traders to use $1 to control an investment worth $200, and $500 to control $100,000.
The professional day traders are divided into two primary categories, those who work alone and those who work for a larger institution. Most of the traders work for a larger institution as they are given access to greater resources.
Large amounts of capital and leverage, expensive analytical software, and a direct line to a dealing desk are some of the facilities given to the trader who work with big companies. On the other hand, individual traders mostly manage other people’s accounts or just trade their own. As these people have limited resource access, it prevents them from competing directly with institutional day traders.
There is a lot of software with which a person can learn currency day trading practices. One needs to be a keen learner with an Internet connection. Websites such as Blackjack Trader.com, Choice Daytraders and CompuTrade are some of the portals through which a person can learn more about currency day trading.
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