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.

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.

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.