From Poor to Rich using Forex Trading Strategies Online
FxPrmeiere.com Telegram Forex Signals - In our course, you will go from poor and humble to rich by learning about forex trading, and it is intended for general students on any level who are ready to improve on their financial standing. The Minister of Finance himself could learn a lot more about the financial markets from our expert team of traders. Our forex trading experts will show you how, when, and what to trade in order to allow you to do the following: 1. Use our introductions to foreign exchange and the forex market to further your trading knowledge. 2. Define how you feel and set your goals in your personal strategies for trading forex. 3. Discover what is taking place in financial markets and identify potential opportunities. 4. Gain the trading knowledge and experience required to become successful traders. 5. After acquiring the trading knowledge and experience required to become a successful trader, start learning about the advanced forex trading strategies that we use at our company. Complete the final course and receive the degree. Enjoy your forex healthcare education!
Do you want to learn how to use forex trading strategies to add a second stream of income to your, your family or your business? Then you have come to the right place, at least if you are willing to invest the time and effort needed to become successful. You must always remember that one of the most important forex trading strategies is to remain disciplined and never let your emotions have an impact on your trading.
1.1. Overview of Forex Trading
Trading Forex is different from different trades, especially concerning the stock market that is really strongly influenced by the cession of confidence of private or corporate or state identity. As economic for a small period has an impact primarily on the reduction of companies' cash flow, operators use the Forex market in a speculative way with only the feeling that in the next period the currency of a country will be lower or higher than the current one, so they can get some profit. The Forex market is used as a domestic bank or zero-rate bond because there is no effort and cost to form transactions after the trade in essence, there is no real capital, liquidity, and policy to gain a profit of 100 USD per deal at the same trade for 1,000,000 currency funds, while to spend 10 USD or there is nothing in case of borrowing and lending before they fix the waist. Therefore, the risk is slightly increased due to the lack of risk arising from fluctuations in fact exchange rates that are higher than the difference in interest rates, which is gained or lost due to secure and profit of this policy will not affect the profit loss on a bank strategy in an intermediate frequency period.
Forex trading represents different trades conducted at any particular time and even includes stock and debt markets to buy, trade or exchange, as per predetermined broker or agent. Most of all trading is done to not manipulate domestic currency, but to examine the appearance of foreign currency or in other words, it is about measuring and influencing a country's trade, capital, financial, and external balances. However, it is not rare at all, and it is especially valid for rich countries, that there is speculative traffic or deliberate influence on domestic currency only to gain profit. In that direction, there are numerous Forex trading strategies that have been shown to really bring a positive trading balance. Small exchange difference and the mentioned proliferation of different commercial deals are not the only reason for high Forex liquidity.
2. Understanding the Basics
Some forex trading strategies are actually basic to complicated trading systems, offered by various websites, and of course, deep in the World Wide Web. Potential forex traders are often urged to begin with the easiest trading strategies to understand, and especially one that will be of use to them. This should be done as they continue studying these systems in a bid to start applying the information they found on the trading platform. Time is also a vital factor that should be invested, for without it, one can hardly achieve a good forex trade. These basic trading systems that every trader needs to start with include the trading strategy that is popularly referred to as mastering price deals. Only after this simple system has been understood can a trader proceed and start to trade while applying the system. As the trader becomes better and more knowledgeable, they can add other nice forex strategies to their systems.
The greatest challenge for some forex traders is how they can improve their trading. The process, which is sometimes unpredictable (since it is highly volatile and risky), involves a number of forex strategies, requiring the trader to study a number of essential elements before going into this business. Of course, it is a must to have a good trading plan, and in fact, there are quite a number of winning trading strategies that have been proven to be efficient and reliable. These can be obtained from a number of sources, and to trade successfully, one has to stick to these winning forex trading strategies without questioning or making changes. The other challenging task for most forex traders is that they need to be disciplined and confident.
2.1. What is Forex Trading?
The forex market operates as an over-the-counter (OTC) market through a network of computers made available by a huge number of forex brokers offering the trading platform. Before the establishment of the forex market, there were economic controls imposed to hold back the money flow at a rate in line with the gold standard. The whole thing about foreign exchange trading was determined by free-floating frameworks in the late 1970s, leading to bilateral trade transactions on terms previously unimagined in the framework of the Bretton Woods agreement. Then, the agreement was amended after the fact and put a different gold trading tactic. The economic situation has changed today and so have regulations. Now, private traders and those who were barred from trading unless they had a lot of money could trade in currency pairs.
Forex trading refers to the buying and selling of currencies in a global market that operates 24 hours, five days a week. The foreign exchange market was established in the 1970s and has since become the most popular form of trading because of the fact that the transactions are of very high value. This explains why the forex market is the largest financial market in the world, making even stock markets look small compared to it. Forex trading is done through a computer network, allowing traders to interact from every part of the global market. It is not located in any place, but rather, it is an electronic platform that can be accessed from any location. The global foreign exchange market has participants such as banks, institutional traders, retail traders, investors, and even governments and central banks.
2.2. Key Terminologies in Forex Trading
2.2.1. Base and Quote Currency The price of a currency is quoted. Consider the example of INR/USD=42; INR represents the base currency and it is used to quote against another currency and here USD which represents the quote currency. 42 is the price which is called the rate. The intended meaning conveyed by quoting the above rate is that one USD can be bought for 42 INR. If it is reversed, it can be notified as USD/INR=42 by quoting that one USD can be sold for 42 INR. There are mainly two types of accounts, a) denomination by base currency and b) denomination by quote currency. When an INR account is opened with $10,000, then it is represented as USD-INR $10,000. If it is reversed, of the price this is quoted as 10,000 INR-USD. That is, the account which uses base currency to quote the rate by using it as per the rules of accounting is called denomination by the base currency. Similarly, the quote currency is named so because the account is quoted in terms of the quote currency. If the rate can be quoted in terms of the euro and quotes are derived from it, then it is called denomination by the quote currency.
If you want to earn simple money through forex trading, you need to understand the fundamentals thoroughly. This is a vast market and the money can be really good. This is also a difficult concept and you will find lots of strategies involved. Forex exchange means the trade of one currency for another. Everything in this world is valued in terms of currency. When an Indian buys products in Europe, in spite of Indian Rupee as legal tender, the question can be raised as to how the Indians are going to buy EUR if Indian Rupee is recognized as a legal currency in Europe? The answer is very simple. The Indian Rupee will have to be traded with Euro. The spot price of a currency is nothing but the price of buying or selling a currency for an immediate settlement. The price of a particular currency represents a 'trade barometer' for the efficiency of any economy.
3. Setting the Foundation
Financial management is still in its infancy. More institutional investors adopt technical analysis to choose and trade with a brokering firm. Frequent changes, controlled costs, and total management functions of traditional companies mean the routine use of relevant tools and techniques. As important aspects of an organization's information system, technical analysis actions are highly beneficial to lesser experienced company executives and specialists for quick decision-making. Depending on their potential association with the three fundamental market determinants - speculation, expectation, and liquidity - technical analysis actions typically concern the potential associated with investment risks and profits. Although the widespread belief exists that opportunities tend to absorb risks, and the rewards of sound financial investment decisions include acquiring, holding, contributing, realizing, and sometimes absorbing the financial risks from dynamic financial benefits. Such a firm association between risk and return motivates individual economic agents' ongoing efforts to reduce the financial risks involved in their capital market portfolio activities because of sequential balance sheet vulnerabilities.
Beginner or veteran managers must abide by a managerial principle which states that opportunities and threats are part of the business sphere's connected and dynamic continuum. In traditional business circles, contemporary business activities and dynamics sometimes mean staying updated. For both experienced and advanced expert managers, technical analysis, for instance, represents common reasoning and decision-making norms and practices inherent in solving business affairs. Thus, organization managers provide a fit environment for efficiently achieving organizational goals. Momentary technical analysis has become part of the international trading marketplace because of advanced web technology. More sophisticated investors access technical analysis services.
3.1. Choosing the Right Broker
When the bank is on the winning side, everyone who has participated in that same operation gets their slice of the profit, and if the bank has taken a loss in the operations, you know what happens. Given the huge amount of buying and selling in the market, the latter process, obviously, works more often than the former. The huge difference between the stock market and the forex market is that the stock trader's choice is much narrower and bank dealers function more like a stockbroker than an actual 'market maker' for the assets of the stock commodity. After all, stockbrokers (bank dealers who deal stocks to them) spend their own money from time to time. With forex, bank dealer revenues come from buying or selling a particular currency at a higher price than what has been offered, and then selling or buying it back to the public at a lower price. So, for example, when you buy the US dollar against the euro for 1.2000, the dealer sells it to you for the same price, and if the dealer or the rest of the banks want to buy it back, they will only be willing to buy it back from your dealer at a price lower than 1.2000 (for example 1.1990). If the banks sold a million lots at that price and bought it back at 1.1990 of millions of lots, the dealer would have a nice profit to split with the bank itself, even considering money management and fees.
On the journey from poor to rich, the first item to check off is selecting the right forex broker. One might ask why you need a broker, especially after hearing that 80% of home traders lose their money and that the market is virtual 24 hours. Why can't they just do it like in the stock market, buying directly from their bank's dealer or with a team of other investors? In fact, you don't just choose a forex broker; the broker has to work for you, not against you. The first step dealers take when their bank or other investors decide they want to buy or sell only one contract (or 'lot') of a particular stock or share is to decide to accommodate the trade without betting the bank and at the same time hold the position until the next profit release or loss. Other brokers maintain hundreds of investors' lots in an intermediation, working on behalf of those who could not afford to buy or sell directly in the market.
3.2. Understanding Currency Pairs
When these quotes are given, there are two prices that are given, and here is where we move on to the next part to understand. This is where currency pairs come into play. After all, a quote is given, this is what you see: USD-GBP 1.0A/B 1.8152/1.8156. The first part, which represents the first currency option, is then the base currency. The second part, the second currency option, is the counter-currency. The first quote option, you are to find the right, which indicates the price that is related to the base currency. In this example, the price of the base currency, the U.S. dollar, is 1.8152.
In the forex market, traders will be buying a currency and selling a currency at the same time, so a currency pair. On the forex, all trades must result in the end of either a buying or selling of a currency goes by trading in matches. When you first begin to trade in the forex, you'll be trading in a small number of currency pairs until the word is reached. Effective forex traders are working to make and keep a portfolio of almost 20-30 pairs. Also, you want pairs that are particularly liquid, which means that it is fast and inexpensive to get into and out of your trade.
4. Technical Analysis
6.4.2 Volume and Open Interest are other secondary data you will see displayed on a chart. Volume is the total number of shares or contracts traded on a given day. It shows the strength of a move and increases with a new trend to confirm the trend. By this, we mean that if the price is going down and volume is increasing, the market is selling. Or if the price goes up and the volume is increasing, it means that the market is buying. Open interest shows the total number of outstanding contracts. It is higher during a trending period and much lower or the same during a retracement. This has helped the students who understand how to use volume and open interest to become very successful in this business. With volume and prices decreasing, it indicates that selling has dried up. It's only a matter of time before prices rally. When a big move upward occurs, it indicates that there is a lot of buying coming into the market.
6.4.1 Candlestick charts are a method of charting used primarily for day trading. Candlestick charts show the opening, high, low, and closing prices of a particular security for a period of time. The body is usually filled if the security closes lower than the open, and the body is hollow if the security closes higher than the open. The opening and closing of the security are represented by the top and bottom of each candlestick, and are called wicks. The upper wick represents the high, and the lower wick represents the low. Candlestick charts also contain reversal patterns and continuation patterns that are used to determine possible price direction. So much has been studied and written about candlesticks and how the Japanese, who first developed this method of charting, have given the westerners studying candlesticks a stock edge in the stock markets prior to the 1990s when computer time and programming became available and started using their knowledge to trade against them.
4.1. Introduction to Technical Analysis
One of the key observations known as the Efficient Market Hypothesis has given rise to the random walk theory. Essentially, it advocates that market participants cannot consistently achieve abnormal returns and underlines the fact that technical analysis techniques are not useful. However, behavioral finance has provided new insights into the field, and research studies are claiming that "anomaly hunting" can result in profits. A profitable trading strategy is meritorious when gains were significantly greater than a naive buy-and-hold strategy and survived complex transaction costs and in-sample data snooping biases. It is our objective to build a step-by-step methodology for constructing, validating, and testing various technical analysis-based FX trading strategies.
Technical analysis encompasses a broad range of tools that embody two key methods: the mathematical and the pattern. The mathematical tools primarily focus on identifying the trend or, in other words, the direction of the price at a given time. Hence, mathematical tools are best used for analyzing various trading strategies as they aim to gain some historical performance to gauge whether the strategies are profitable or not. On the other hand, the pattern tools have more to do with the philosophy of how prices move. This philosophy is based on the simple premise that when price moves, it leaves a trail indicating where the price had been. This trail can be visualized in the candlestick or bar charts. Therefore, pattern tools such as moving averages, Fibonacci retracements, Charles Dow Theory, momentum, MACD, and stochastics, among others, have been popular among traders.
4.2. Common Technical Indicators
Traders use the Moving Average Convergence-Divergence (MACD) while determining what is going to happen in the market. As the name suggests, it is the difference between two moving exponential averages and is associated with a signal line. The interpretations of this indicator are the price trend and the crossing of the MACD and signal lines. Some traders also pay attention to the divergence of the indicator and the price. The Commodity Channel Indicator (CCI) is used to compare the typical price for a security to its simple moving average. A buy signal is generated when the CCI crosses above +100 and a sell signal when it crosses below -100. This indicator can also be used in conjunction with trend lines. The CCI is used to determine the direction if the price change is for a serious length of time.
The Relative Strength Index (RSI) is used by many traders to develop trading systems or as part of a significant trading system involving the moving averages and MACD. It compares the average of up closes to the average of the low closes and associates the results with a scale of 0 to 100. Other indicators such as stochastics, money flow, and trend index can be used as well. Some traders attach importance to the relative strength of a security compared to a market average as a criterion for buying or selling.
5. Fundamental Analysis
A few data (which impact yields and therefore currency rate), such as the FOMC meeting minutes, are published each month. All traders may therefore not have the same forex information at the same instant, which may generate a slight difference in opinion: no one can know the impact of the FOMC announcement on interest rates with certainty. The aim of the game is to recognize the direction the forex rate will take and to anticipate the impact on the forex rate. In a telephone formula connected via an application programming interface (API) to a broker price-feeder (provided by Reuters, Bloomberg, etc.), forex traders directly receive the news. With a "manual" price-feeder, traders exchange the latest forex rate themselves. Another solution for forex trading consists of using a bona fide trading package. The trader adapts and/or modifies the package to receive his news warnings. In any particular case, the trader needs to keep track of forex news publication timetables.
The fundamental analysis is the forex strategy that studies the economic and political environment of a country. The forex trader can then speculate on the expected currency pair movement. Forex fundamental analysis may be technical. Although in the world of news, analysis and economic data publication, many forex traders act as Deng Xiaoping used to do when he insisted: "I don't care if the cat is black or white, so long as it catches mice." The fundamental analysis is fundamental since it takes into account economic and political actuality. Forex traders are constantly bombarded with economic and political news. Forex traders can open orders within minutes of the news release. The forex market is the most liquid market in the world, partly because of thanks to forex strategies. The liquidity is also assured by the delivery of economic and political news to traders looking for tips. Some of this news gives forex traders economic data such as indicators (retail sales, labor cost index, GDP growth, etc.), forecasts and monetary policies (classic announcements: interest rate, inflation objective, etc.), as well as political news.
5.1. Introduction to Fundamental Analysis
The forex presence, together with the local market working-time difference, has made it possible for banks and investment companies to follow the high level of liquidity necessary for the base money to be converted at any time precisely thanks to this forex market. However, transaction expenses on the particular location of the transactions are also connected with this system of forex trading. Commerce through brokers or multibanks has a major role, whereas no transaction request is directly accepted by a bank. All banks are interconnected, and this has allowed them to be present in a major market and to perform operations at a very competitive cost. Due to the direct bidirectional channels opening on a local exchange, the number of banks actively operating within the market attains remarkable levels, thanks to the possibility of using any quotation existing in the particular transactions at this time for forex trade. No other agent is present in the forex market with a similar role as the bank, as it is the only entity that can convert any position of the base money into the facing position by two currencies for minor expenses. At the same time, the bank provides a variable remuneration service from its ability to intercept the spots of synthesis between the services available in contrast with society's operational requirements.
Fundamental analysis is a field of the economy that researches and evaluates the genuine, material goods and other resources movement and forming the authenticated price floor. It includes comprehensive non-economic and financial data study. Forex does not mean an immediate exchange of base money units on the spot. Service turnovers on the international market include goods and services (trade turnover), intangible assets (estate sales), capitals, etc. Nothing constrains one from transposing their fortune to the monetary form and re-entering the circulation field at a certain time. No juridical regulation will prevent these transactions, although it does limit forex participation or distribution and the currency supply.
5.2. Development of Fundamental Analysis
Fundamental analysis is the study of market values and economic, non-economic, and financial factors that may affect prices on the forex market as well. It is a method of forecasting the currency exchange rate or the prices of currency exchange rate or the rate of the adjusted futures contract on the modern financial market. The following sections will provide short considerations of primary forex fundamental analysis fields.
5.2. Economic Indicators
- Consumer Price Index (CPI): This index shows prices of goods and services and is considered extremely important, as consumer spending is a component of the GDP.
- Industrial Production: This index shows the total production of manufacturing factories, utilities, and mines, and has a good impact on the FX market when published.
- Producer Price Index (PPI): This index shows prices at the producer level and is often used in combination with CPI as a way to forecast the future.
- Consumer confidence index: This index is a survey of people's thoughts on the country's economic situation, as it affects their buying decisions. Hence, it impacts the pairs that are moving against the expected growth.
- Retail Sales: Published at mid-month, this shows the total receipts of retail stores in the previous month. It is closely watched, as increases in consumer spending fuel economic growth.
- Real gross domestic product (GDP): This is the most relevant national economic indicator, as it shows the total market value of all goods and services produced in a country. The GDP numbers are published every three months and have a significant impact on the FX market.
Economic indicators are statistical numbers used to forecast a nation's economic growth and potential. This is important for every currency trader, as the economic situation directly influences the relative economic strength of that particular territory's currency. The most used economic indicators when trading the forex market are:
6. Developing a Trading Plan
Do your best to stay on top of your game in all areas, as one has much to consider when venturing forth in these exciting but potentially dangerous waters. By that, we mean the trading calendar for each of the seven days. Values and suggested analysis are easily available that advise what is occurring during the course of a 24-hour or longer period of time for each and all of the pairs that you are interested in. A trading diary should be maintained by the trader. It should record winning trades as well as losing ones. Buried within them both is tons of valuable information, including traders' problem areas. If a poor trade results, then the trader should concentrate on where he thinks he went wrong. He will do best to find someone or several experienced individuals to explain how something should be looked at or analyzed. Then perhaps they can gauge the emotional temperature of the market and say, "Ah ha, that's probably why." But up front, the trader may need to attend seminars or increasingly monitor his trading software. With the right team of advisors, an experienced trader can still take advantage of the fast-paced, high-risk, high-winning environment prevalent in the forex trading market. Only when the proper commitment and personal determination towards reaching the specific goals developed by the plan are in place may an investor expect long-term profits. On the other hand, he may be in and out of the market in seconds, carrying many winning trades in one or several currencies using the same type and design in trading.
Developing a trading plan is vital to the success and longevity of any forex trader, regardless of their trading style. Some factors may be more important to certain traders than others, given their overall objectives and risk tolerance. The trading plan should be a clearly outlined record of each trader's continuing education regarding forex fundamentals and the technicals as they pertain to trading. There are no guarantees for success at adrenaline-inducing high-speed trading, so only risk capital should be used and employed by well-experienced traders who perform proper management and can afford to risk substantial capital. It is not necessary to have the "I know it all" approach because it is about what you don't know that is risky. The trading plan should include fundamental and technical analysis and advice, the trading calendar, and either possess or purchase good trading software, and/or subscribe to the services of investment advisory professionals who have solid track records with an extensive list of satisfied clients.
6.1. Setting Goals and Risk Tolerance
The next 13 sections will aim to outline the disciplines and tools so that you can have such control over your range of outcomes in the trading arena. These preludes, taken in combination, should equip you well with trading cycles to assist you in your trading business in the years to come, as you build your wealth as a value-biased trader. Especially during the initial stage of your trading tutorial, you may be making forays into the slight deviation from value bias with what appears in the beginning to be success. However, it may not augur well for your emotions and psychology that a young trader might expect to be around for a long time.
In my personal opinion, anyone who plans to embark on forex trading, intent on making profit from it, is likely only to gain illusive benefits. You will be far better off, rendered self-sufficient with all the enabling trading knowledge and tools for you to be able to manage and grow your trading business - by learning to set goals and reinforce your goals with personal attributes/tendencies, value investing, as well as being financially capable before starting out on any trades. We can think of this as sitting by the virtual pool table a bit longer, hoping for the book value to go even higher, to a much greater level.
6.2. Creating a Trading Strategy
Buy-Sell Signals are key to successful trading strategies. There are many trading strategies among the countless investors relative strength index, moving averages, MACD, Stochastic, Fibonacci are to name a few. A detailed explanation of these indicators would have to be explained in the later chapters; still, a simple example will be a moving average strategy. In such a case, when the market price series is trending moving average, this will follow the market price; however, we can go long in a trading system and use the moving average as an exit point. The entry using a moving average is signaled when market price data points are greater than the moving average data points. As a trader exits the market when the moving average data points are greater than the market price data points, the idea behind moving average is simply buying when the stock increases in price and selling at a lower price when the market becomes bearish.
Creating a successful trading strategy requires thorough knowledge of the trading markets. You have to have the skill and desire to be a poet creating a trading strategy. But, to state it briefly, among these, it should at least include technical strategies that would indicate the buy and sell signals. The buy-sell signals are the critical keys to successful trading strategies. A few key points in strategy creation are: breadth or number of trading strategies (one really can't go with a single strategy), forecast errors, forecast errors over varying market cycles, and structural breaks. A system with a single trading system may at best be thought of as a money management system and not really a trading system. Traders are people who enter a trade based upon what the market is doing, have some predefined exit strategies as well as some rules in place to manage risk. When trading changes, they have the discipline to adjust their trading systems.
7. Risk Management
Regardless of the strategy you choose, trading can be risky and there is a possibility of losing a lot more than you are prepared to lose. It is important to be able to control your risk and now that you have the potential to lose more money than you put up at stake, but also to keep in mind the characteristics of the forex market to be able to base the investment in trading. This would help you to keep the risk under control. Unlike the share market, you can use leverage when trading in forex. This means you can use a small amount of funds to control a large trading position, but this also means that you can lose a large amount of funds on a small movement of the market, down or up. With the potential to lose more money than you put up at stake, be sure to choose an authorized broker and make sure that your position is always covered entirely by your account input.
Most traders jump into forex trading in order to take advantage of the easily accessible leverages. Successful traders risk a smaller percentage of their account balance per trade because they knew the importance of money management and they never allow the size of their account balance to suffer a freefall. We have heard of the traders who lose a bit of cash in the forex market only to lose their mind and barge up their trading balances by several folds in a single trading, basically making all the profitable progress gone in smoke. It is essential to have a stop loss strategy that grows precisely to control the downside in forex market with the inconsistent volatility profile of the market.
7.1. Importance of Risk Management
Good risk management consists of two parts. First, it protects a trader via maximum shock protection, maximum position size, divergent trading, and/or betting using the 1/100 rule. Secondly, after the trader has developed his trading system, he needs good individual practice. The best trading system is ineffective if the trader cannot follow it. Technique brilliance includes the flexibility to switch off the traders body needs. The more the trader can evaluate and trust his trading system with his heart and soul, the greater opportunity for success. A trader follows his trading system should risk from 0.1-0.6% of his equity, and it will grow with compounding. Furthermore, although some risk is desirable in trading, it does not imply that the more risks taken, the more money the trader will make. A hit rate of only 50% in an equity generating trading system may still lead to losses in the long run.
The importance of risk management in forex trading cannot be overemphasized. Traders should attempt to have an 'edge' in trading. Having a trading strategy that provides the trader with a statistical expectation that more money will be made than will be lost is considered the edge. This edge must be precise, as simple expectancy, which is considered the amount won for the amount lost, is designed to mean the probability of winning multiplied by the average win to be more than the probability of losing multiplied by an average loss. However, probability and trend analysis do not boost a trading strategy without a good risk management strategy.
7.2. Position Sizing Strategies
"Optimizing your position sizing strategy is one of the most really most effective changes you can make." Van K. Tharp, Trade your way to financial freedom, second edition.
e. Equal position sizing, no adjustment for the volatility of the stock positions are held.
d. Optimal F for a fixed number of trades. Calculate the optimal position size if the number of trades are fixed.
c. Kelly formula: Kelly is a famous statistician that discovered the winning formula. Position size = win ratio - (1- win ratio). Capital Growth rate = win ratio ln(1+ win rate) - loss ratio ln(1- loss ratio). To maximize the compound growth rate of the trading strategy, the position size based on the win and loss ratio are calculated. The capital growth rate of the Kelly formula for portfolio management is higher than the Kelly formula for gambling. The main objective of appropriate position sizing is to conserve the deposited money and rocketed when the trading strategy has an edge and a sequence of winning trades occur.
b. Fixed Ratio position sizing, after the success, increase the bet size: Van Tharp mentioned this position sizing strategy in his book, Safe strategies to beat the markets. The strategy is to reinvest a fixed proportion of the profits and the winning trade amount increase.
ENSURE THAT the brokerage commission should be SMALL enough, otherwise, the increased number of shares may not justify the increased effect in position sizing. Conversely, trading cost may cause under-positioning for stocks with very low volatility, but are profitable in the long run with many small daily gains.
Trade a fixed dollar value for each stock, for example $10,000. The stock volatility is measured using the strategy's average range (a customized measure for each trading strategy or just 20 days moving average range of daily stock price changes). Then, for long position, number of shares to buy = $10,000/volatility. If the volatility increases, the number of shares to buy decreases. The most famous fraction is 1/2N volatility, for a $50,000 account. The maximum loss decreases as the trade moves in the correct direction.
a. Fixed Fractional position sizing: if you remember the story in the movie Master and Commander: The Far Side of the World, during that time, it is a tradition that the valuable officer shared the loots among all the crew. In other words, the sum is shared among "all" the right people. Here, the right people for each stock is its volatility, so position size the stocks based on its unique volatility.
Position sizing is the first and most important step in investment and trading. It is absolutely important for successful trading. Why risk too much for the same expected return? Numerous position sizing strategies have been developed. There is no one golden rule. But certainly, position sizing is a key factor to make or break your investment.
8. Psychology of Trading
Trading is dealing with greed and fear. One can learn the rules of trading and although they can lose, they might have the potential to be a winner. Some internet traders panic when things go awry even with a paper account. It is hard to make profits because a trader has to be comfortable with discipline, accept losses and be comfortable with taking home different amounts of money at the end of each business day. Day trading can become a roller coaster as the gains from the trading sessions will fluctuate much more than a salary. Traders will not make money on every trade but it is necessary for them to have losses to be a winner. It is important to have the right mindset. Traders have to go with the flow. Their attitude has to be positive in order for them to make money. When trading Forex it is a business with an unlimited horizon. It is necessary for traders to remain objective in the up and down fluctuations.
Trading in the currency markets is not limited to becoming familiar with the fundamentals. Experts say successful trading is 90% dependent on the psychology of trading. "You can learn strategy but you have to have the right outlook," says Bland. A study done asks people who trade without an instructor if they would trade with a small amount since five other students all became millionaires from a $5,000 account. Fifty percent answered they would want to make much more even if the probability of blowing up the account was great. In the same study respondents were asked if they were given a system with a win rate of 60% and the possibility of drawing down 50%, would they trade it. Sixty-seven percent said they would not trade the system based on a 60% win rate where the conventional win to loss ratio was 1 to 2.
8.1. Emotional Discipline
Many individuals who do not comply with forex methods have to face severe monetary implications. If you do not follow the prescribed foreign currency methods, it can spell disaster as people who follow methods may experience substantial monetary problems. If you have to deal with a family business that is suffering from a financial crisis, it can spell disaster. Or you may personally suffer a great deal of anxiety. If you exercise, have good sleep habits, and eat right, controlling your stress levels when trading currency will help. If you teach your body how to take care with ease stress, you will experience high stress levels in foreign currency trading. Forex trading strategies online that help market trading that allows you to connect as the future future. Currency trading world lets you connect to the internet market, and market exercises ah from anywhere.
You must maintain a clear trading mind when involved in the exchange of foreign currencies. Emotions play an important role in currency trading. When trading currency, emotions such as fear, greed, or prejudice can greatly affect your decision-making process. By having a clear mind, it will help you avoid making quick trading decisions, which is important for your success.
8.2. Overcoming Trading Fears
Let us now go through some of the trading fears that most traders normally face: Fear of Loss: This is the most common fear and it has a big impact due to a lack of trading. Most people have a big difficulty in dealing with a loss, causing them to react in the heat of the moment without taking into consideration all the facts or actions that they are about to undergo. There are lots of reasons that our mind secretly whispers to us, known to us or not. One of the common reasons is due to the feeling of being ashamed, especially from other traders, leading to impulsive decisions that prevent any longer-term success.
Everybody has their own fears, and this is the very simple truth that applies to all the traders in the world, whether they trade stocks or commodities. This is not a new concept by any means, and it is greatly acknowledged by most traders. However, what is most interesting is that most traders would not be able to acknowledge which of the trading fears belongs to them. This is due to traders not taking the time to reflect on the reasons as to why they lose while trading. Understanding this is the base to overcome it, which will improve your chances of success.
9. Choosing the Right Trading Style
Hedging is the act of changing one's exposure to risk by buying and selling derivatives such as options to offset the risk of price fluctuations in an underlying instrument. Scalping trading is an intraday strategy and the focus is on a quick sale with a quick gain. The success of traders using this strategy has a long success rate of 85%. One-click trading can result in fastest order execution but can also be used as a tool for abusing margins. Scalping is a great skill for traders who love excitement. They must possess both a great passion and a speed in trading. If done correctly, however, it carries little risk with excellent potential of creating a significant cash flow provided that the trader is experienced and has ready access to real-time exchange market information. A potential disadvantage, if allowed to go unchecked, is that the losses can escalate. It takes a great deal of dedication, discipline, and time in becoming a forex trader.
We can additionally define trading styles into four categories: high frequency traders, buying and selling quickly in just minutes or hours; swing trading, capitalizing on waves in the market which can last days, weeks or months; position trading, holding trades for a period of several weeks, months or even years; and forex scalping, these types of trades are the most profitable but the hardest to speculate. For these types of traders, usually use software that automatically enters and exits transactions.
To choose the right trading style, you must establish your risk tolerance level and choose how you would like your trading business to function based on your money needs. Do you have the discipline to follow a system without letting your emotions be a constant market guide? How much time is available for trading? These and similar questions form a process of decision when creating your trading business idea. There are two types of forex trading systems. It is often said that price action trading is actually the purest form of trading. The other system is the money management trading system.
9.1. Scalping
If false breakouts occur, traders can take advantage of the momentum that is moving the price at the same time, by buying down the range of support, or selling up the range of resistance. Trading time expenses are created as the last phase of the false breakouts are over. After the candlesticks are shown to reduce the price, traders usually enter and are required to perform the aggressive time scaling of buying or selling the technique. To take advantage of the short term spread of five to 15 pips, trade should be closely monitored. Traders should follow momentum because there is a significant amount of profit in the trade.
Scalping is a day trading forex strategy that is based on quick and short transactions with gained pips. This type of strategy is usually used to exploit the situation when the prices of security are assumed to be overpriced. Traders can earn a small amount of profit and get it in a short time, but experiencing rather high risk of loss. Forex scalping strategies are used to trigger short term market signals when the conditions of oversold and overbought appear able to change the trend of the market. The main idea of this trading strategy is to keep the process as simple as possible and thus gain the benefits after each forex trade. The whole goods the market brought are then sold quickly when the take-profits are activated.
9.2. Day Trading
The other important moments of day trading are: go for day trading only with a trusted dealing center that answers all the requirements of the broker, and trade only well-known currency pairs. The scales of changes in such pairs allow receiving a large profit in a short time. As the trader doesn't handle any trades in the market and isn't interested in the results of trading, risks during the night practically don't exist. Meanwhile, the trader has the possibility to settle down and be ready for multiple-hours trading the next day. For the trader, day trading is useful primarily because there are no contingency risks. One good day trade can bring a profit equal to a week's worth of trades. When you open the first position, you must place a protective stop and take profit. After that, you must leave to carry on with other work. These orders are advisable to move only forward and to turn into the market at the earliest possibility! At this time, the market will either be strongly thrown in two opposite sides or will quickly move in the direction of its trend, with an especially sharp thrust against the main tendency. Under conditions of high volatility, you have to remove a part or all of the possible profit. Simultaneously, introduce a trailing stop that, in the case of a possible market reversal, there are no other notes.
Day trading refers to market positions which are held only for a short time. It refers to handling trades within a particular day. In the Forex market, practically all retail traders handle positions the same way and leave open the deals only for a period of one or a few hours. However, within the framework of "day trading," such trading should be closed at least during the trading day. So, the open trade could be during the night as well, but in the morning everything must be closed. The main thing in this strategy is the opportunity not to keep one's assets in a trading account during the night when changes in brokers' quotes may take place numerous times.
9.3. Swing Trading
Swing Trading Strategy using Bump and Run: Bump and Run shows indicators into the price formation of the charts. With just focusing on two indicators - EMA and Spike, traders are able to know whether the price formation is currently using the Bump and Run Trading Strategy. Only buy signals are preferable as a boom might be overhead. As observed, there are currently two bumps that traders must know. If the price goes further high over the two bumps, then a profitable run happens thereafter. With as simple as this 2 pattern formation, newcomer traders can learn to trade and at the same time make steady profits.
Swing trading is the best trading strategy for any new traders wishing to use in Forex trading. This is an ideal access to almost all traders. In this trading system, only a smaller investment is needed. This system relies on a single current data, such as price action pattern, that eliminates all other levels of inefficient information. By focusing on the required information, a smaller investment is needed. This system can be learned by any layman who is new to trading and at the same time, it has been tested to be one of the most consistent and promising profitable trading systems available today. Since this system can be used by almost any investor, it has widely created buzz in the market.
10. Automated Trading
But simultaneously, they allow the signals to be implemented without the necessity of manual actions to be present. With the growth and development of the online forex trading market, these trading programs have been joined with the online trading platforms, and they use the historical data for initiating and concluding the trades automatically without the need for human interaction. After sabotaging the required trading rules, the systems make transactions in accordance with the set rules, and another advantage is that automated systems further eradicate the delay experienced by a trader in physically executing a trade. One of the most important benefits of the automated forex trading programs is to remove the emotional and psychological factors that hamper the decision-making process. Various methods are used for implementing transaction rules, including break-even stop, trailing stop, and many more.
Automated forex trading programs have attained continuous success and popularity in accordance with the trading knowledge and needs of the investors. There are different programs present, which specialize in different strategies and concepts, and every investor can find an automated program that is best for his or her investment methods. There are different methods involved in automated forex trading decisions, and it's important for investors to recognize them for attaining stable profits.
10.1. Introduction to Automated Trading
This chapter will interest traders of all levels, from beginners to experienced traders. Manual trading is required by both newcomers to Forex and experienced market players. There is an unspoken rule that nobody will be able to manage your money on Forex better than you. This rule is based on the fact that manual trading does indeed require very quick reaction and proper decision-making at various times, without which the presence of the most efficient trading systems and strategies that were not written down in any book will not help the trader.
We have repeatedly mentioned the flexibility and adaptability of Forex strategies. Automatic trading is a vivid example of this. The concept of an image of a lonely trader sitting in front of a monitor in a dark office, as we see in movies, belongs in the past. This is how automated trading is sometimes described. Indeed, why would a trader in the modern world need to spend hours on end at a monitor, monitoring an at times unpredictable market, when it is not difficult to program a smart advisor that can do the job almost just as well?
10.2. Benefits and Risks
Lesser Costs: You need not pay commissions for the foreign exchange market. Lower Spreads: The retail transaction cost is less as it is very low, and Forex trading has low spreads. Embraces the Flexibility: Forex brokers give the opportunity to trade in the market that is extremely flexible 24/5.
What are the benefits of the trade?
We all are aware that forex trading is full of uncertainties and it features equal chances of risk and benefits. Forex trading is not that difficult without a proper strategy; it becomes the most difficult task in the world. By coming up with the right trading plan, you can increase the chances of profits in forex trading. The only thing you have to do is stick to your strategy, and by following the basic guidelines, you can increase your level of profits dramatically. Some of the strategies may definitely work wonders, and through these strategies, few traders have turned their thousands of dollars into millions of dollars. However, there are plenty of risks associated with these strategies, and even if one tends to ignore forex risk management, loss can be disastrous.
11. Backtesting and Optimization
Technical indicators are not able to forward "predict" the prices so neither their proxies. If for the day n you must take a decision to sell or buy some instruments, you kind of "know" in case of the "close" price; but it is surely better to act as if you do not know anything! You use the day n-1 or even any day before n-1 to calculate the input parameters needed, using the backward indicator as if those were known now for the day n. This is nothing more than taking profits from your past actions. Nothing else, no "predictive" power. When designing a system, you must finish the concepts 'leading' and 'lagging' clearly in your mind and be capable of avoiding to use beyond what is possible any 'peeking' power that does not exist in the system itself. Stay confident that if you are choosing the day n with no expert trading peeking beyond that day, you are effectively testing your system in a real world where the trading expert is not a forecaster, whatever the price data you use.
By now you know that the technical indicator is simply a function f(Price,X), which uses the sequence of price vectors and the previous values of the function as input data and gives some kind of output that leads or lags. Conceptually, there is nothing more incorrect than applying optimization of the function f(Price,X) beyond those X parameters that affect the value of the indicator. The reason is simple: you use some input data, say 8 years of prices, knowing the Hi, Lo, Open, Close and Volume of all trading days for each day, calculate the input data for the indicators and only at this time you can claim to be in a certain position of the market.
11.1. Importance of Backtesting
The downside of testing a strategy for a longer period is the longer period that is going to be tested. Consider a strategy that tries to exploit market trends. Advantages to exploit the market trends can last anywhere from a few hours to a few days. An investor then backtests some strategies on a period lasting five years and fails to show good results as he does not allow the testing period to last longer than five years. This result is primarily due to survivorship bias. The account was not incurring big losses because it was going to go out of business. The same is true when dealing with forex trade strategies.
Backtesting is the concept known in the financial industry as the practice of evaluating a trading strategy on prior time periods. Instead of applying a strategy, an investor must do this to ensure the strategy is profitable. A use of a forex trade simulator and backtesting can easily be performed with a free forex demo account. MT4 forex account is the best option for looking at several hundred of ~5-year-long periods. It can also be done manually without a forex trade simulator or tools of a similar nature. The scout must simply take the raw data of foreign exchange rates, open a spreadsheet with an internet connection, and then let the data flow, making the right calculations.
11.2. Optimizing Trading Strategies
1) English or Asian session onlyPick the English session only or the Asian session only. 2) New York session onlyYou may go for the New York session only because it has the most volume. 3) General Economic NewsSimply use the general economic news to trade. This could be a 50 percent weight. 4) Special NewsSome banks have economists that have quantified various news releases based on their content and time of release.
The consensus among quants quantifying trading edge is simple: Look for something thats specific, persistent, large, and has to do with a goal.
If there is a good number of trades within the testing period, you can use the traditional Walk-Forward with Out-of-Sample testing as suggested by Robert Pardo when formulating and testing your strategy.
Optimizing the appropriate variables for use in your trading model is crucial. In general, rules like spending five percent of the available historical data for optimal testing are well suited. Additionally, in-sample samples are selected; however, you test it using the out-of-sample because you need to validate it using unseen data.
12. Building a Trading System
Mechanical systems involve using rules that generate trade ideas, which are then backtested on historical data to determine how much trading profits can be made and the reliability of the system. There are many benefits of using mechanical systems. Most of those benefits revolve around the emotional detachment or near detachment from trades. This implies that the anxiety that comes with making important trading decisions becomes a thing of the past. The discipline involved when using mechanical systems is a huge advantage. There are instances where doing nothing is more important than doing something. The rule set the trader is using to make their buy and sell decisions will, in most cases, incorporate their inherent beliefs of price direction. However, in a few cases, the trader is reluctant to buy and/or sell. They see the signal but don't enter the trade because they don't believe in the signal, even though their system says it's valid. Of course, a trading system should be established based on the forex trading strategy one uses.
What is a trading system? A trading system is a combination of rules, which when applied to the process of trading, specify conditions for the opening, managing, and closing of trades on one or more financial instruments. Most experts agree that successful trading is only 20% to 30% of the system, while the rest is largely the adherence to the system. Trading systems can be categorized into discretionary systems and mechanical systems. Discretionary systems are those that have been developed by the traders based on their skills and experience. The trader then uses the system's tools to build a strategy to give them entry and exit signals.
12.1. Components of a Trading System
Nonetheless, the method is the single most important ingredient of the system. It does not matter if the trader uses a computer or not; in other words, if he is mechanical or discretionary. What matters are the results. The outcome defines the method, not the trader. A discretionary trader's rules are implicit and they are either demonstrated by results or they do not exist. A computer-based system has explicit rules, but are they better than implicit rules (intuition) of the sovereign trader? There are those who use different trading methods for different market conditions. They may have different trading plans but essentially their variations are methods.
The heart and soul of a trading system is the method the trader uses. Some traders use a simple method based on the price action, others use technical indicators, and certain traders use fundamental or sentiment indicators. Nearly all of these methods are basically derived from these three areas with slight variations. In fact, all methods are a form or aspect of these three broad categories. The belief by advocates that their method is correct stands simply as a limited acceptance of reality.
A trading system is a plan for trading the markets. It may include any of these components: a trader, an operating system, a market, a trading plan, method, or strategy, an order of entry, an order of exit, a stop loss or trailing stop loss, and an average of how much money to put or risk in any single trade. Notice that other financial markets involve ways to manage money, but do not have entry, exit, or stop orders.
12.2. Testing and Refining
Alternatively, if you wish to place a buy order, you would place your stop entry 10 pips below the closure of the candlestick on the 5-minute chart if the 50 EMA has acted as a form of resistance in the past. Then place your stop loss according to the rules given to you in the E-course material using techniques that you would use on the 4-hour chart advice that is given to you. You may also be able to use this method on the GBP/USD, GBP/JPY, and the EURO. These are pairs that are well known for a good intraday move. However, you should seriously consider getting the course if you want to make consistent gains in the forex market over the long term.
Using the 4-hour chart, you need to add a 50 exponential moving average (EMA) onto your chart. This will serve two important functions around the currency support and resistance levels. As the price moves towards the 50 EMA, it is a signal that the pressure is on. If the price develops and closes on the 50 EMA, you need to have a quick look at the stochastic to see if it is in an overbought or oversold condition. If it is overbought, you may want to place a sell order. If it is oversold, you want to place a buy order. You may want to look at the 5-minute chart to make sure that the price has stalled and there was a candlestick formation as is taught to you by the Day Trading Forex Course. If the price has stalled and there was a strong candlestick formation, you would put a stop entry 10 pips above the closure of the candle if you believe that the price is about to fall.
13. Diversification and Portfolio Management
It really is sensational to be able to profit in partnership with the forex market, the largest financial market in the world today. But the ACA and forex traders community are also aware that the forex market is extremely volatile. And this characteristic of volatility makes our portfolios highly sensitive.
How many traders know the concept of portfolio diversification and understand how it works? Have you been attempting to diversify your investment portfolios without truly understanding the concept of portfolio diversification? Diversification is still here to stay, and if you want to maximize profits, you had better fathom what it means and entails. This chapter is devoted to helping you understand the concept, explanation, and demonstration of portfolio diversification. Let portfolio diversification aside for the moment, how many traders understand and employ portfolio management strategies in order to evaluate their forex trading success or worse-sufficiency? Portfolio management is a fantastic tool to estimate and comprehend the risk of your current portfolios. It helps you reappraise your financial status in order to determine when exactly it is time to exit from the forex trading venture. Forex trading while you are on the move.
Forex trader, do you remember being advised to always diversify your investments in order to minimize the risk of losing on your investments? I congratulate you if you do utilize diversification. Not many traders realize the importance of portfolio diversification until the day comes when he suffers a major loss on all/most of his investments overnight. Diversification minimizes the risk of having a low expected return on investment.
13.1. Benefits of Diversification
When you obtain a sign that a certain forex trade will yield profits, diversifying your trade could improve your success rate. Some traders argue that diversification deteriorates performance. This is true in the cases of a) purchasing various assets highly associated or b) when purchasing various assets with poor returns. Without referring to diversification for the forex market part, some studies have noted that base currency portfolios do not perform better because of the foreign exchange exposure and the support of interest rates. Several traders who attempt to forecast asset prices time and time again do this by using a wide variety of forex pairs. The trading system can use supplementary indicators or a simpler set of complex indicators at the initial stage of the trading procedure. The reason diversification will not lead to significant improvement is that the forex market does not offer this possibility. You can find several promising forex pairs by considering various time frames and have your trading account in constant action. Usually, with the use of time frames at both extremes, the period in which profitable forex trading strategies are applied is changed.
Diversification is among the best ideas that expert traders advocate for. It involves investing your money in various assets. The main reason for this is that the performance of different investment assets does not depend on the same factor. There are relationships that exist between different asset groups. For example, stocks have a reverse correlation with government bonds. Usually, when bond prices increase, stock prices go down. These relationships provide important advantages. When one asset performs poorly, it will probably be associated with a gain in another one with a negative correlation. Such a relationship will provide balance to the portfolio. Some traders suggest not including commodities in the portfolio due to the historical increase in correlation with the stock market. However, this opinion contradicts the previous one since it denies the benefits of allocation diversification.
13.1. Benefits of Diversification
13. Diversification
13.2. Portfolio Allocation Strategies
- SECURITY CATEGORY SELECTION AND SECURITY SELECTION The kind of environment we live, work, and play in calls for investment strategies that are housed in mind, are already built. Also, portfolio selection techniques that pay attention to the investor's condition, mostly expressed in terms of the time value of his or her life. These remarks are designed to articulate a multi-period environment perspective for security portfolio selection; an approach which is hardly given thought nowadays.
- SELECTING A PORTFOLIO RETURNING THE MAXIMUM EXPECTED MEAN. A, Portfolio. I have stewed a list of several stocks which I am considering for a potential. For argument, let's say that I've boiled down my choices to two stocks. Victron and CaliGas. Now I have to decide whether to select one or both. Suppose I have the. Q, times current performance of my portfolio. Using technical and. Economic data encapsulated in my Invest-One program, my selection. Would be based on.
In a two-asset world, markets or investments? For a given level of risk, my risk-adjusted portfolio to the mixture of stocks and bonds risk without restricting the investment horizon. I. Optimum Portfolio Selection The purpose of this article is to discuss the application of the index model in portfolio selection. The application of regression or the article is organized as follows: a brief summary of the representation of the index model will be given in the second section; the third that the assets in the portfolio selected on 711 the basis of the index model are mean/variance efficient assets.
14. Advanced Trading Strategies
Forex trading isn't for the feeble-hearted or the novice. Before you begin buying and selling, it's always better to learn about the best forex trading strategies. There are basic forex strategies and technical analysis strategies. Basic strategies include what you have to learn right before trading. Technical analysis strategies are dependent upon the interest in the forex trading marketplace. When there is a great demand for a currency, it causes the value of that currency to increase.
If you generate losses while trading the currency market, it doesn't suggest that all hope is lost. A large number of the most successful traders have first consulted with a coach or mentor to help them understand exactly what went wrong before working with their trading plan to generate money. It demands a bit of work, schooling, forex system knowledge, control, and heart to pull it off, yet it is done every day by people who are both committed and disciplined.
This trading strategy is tested not only by me, but its author has a proven track record. His reputation should be enough for you to trade it and, of course, earn from it. It is a powerful strategy and if applied correctly, can be extremely profitable. With certain trading knowledge and the right system, it can become a full-time trading profession Forex trading.
14.1. Hedging
In the fill up, the liquidity consumer sends many different orders to a dealer and must trade with those requested. The forex provider at prices the trade in increments equal to the spread liquidity provider and therefore face the poor market resilience, refilling and signaling side-effects. A trading broker that provides liquidity is a dealer. These last two procedures of filling must be respected. For all customers, liquidity problems are crucial, but they become even larger for the individual investor to know that your forex does not continuously offer forex standard bank treatment. The Celtics would be swimming to the money in these games, with an agio-free dotted line liquid up any place they traded. Competitive banks are the price vendors that offer 7 days a week to forex liquidity. Tradable gives a hidden or last-look that is displayed and offered on an RFQ basis. In the fill-up, the liquidity consumer sends many different orders to a dealer.
Request dealing protocols. National banks that are forex trading could fund and the customers in the jurisdiction. AvaTrade have built this lesion was published by the autumn in the room. Banks are most liquidity provider for forex in the network. Although the incentive is to benefit from better rates, spread costs forex supporting, the transparency costs can be subject to forex quoting it. For more than 3 Forex Trading Signals, Pro forwards a Forex pair, forex the least volatile is the intraday liquidity provider. Banks show additional fees. Ads at forex place provide a new level of liquidity to markets. Our institution provides a unique look on the markets. Please be cautious when using market orders paddle or No-Request-For-Streaming RFQ prices.
In reality, there is a dealer imposing a substantial liquidity provider for forex. These activation IMs are shown on the chart 4: Forex chart for HBI. Traders with favorable trades should look forward to reducing the payoff in accordance with their appetite for risk. Barclays Liquidity Enhanced Market. In the global market, having several liquidity providers for FX was indeed beneficial to the clients. The scanning process is based on the same pattern, but with a different set of parameters. It was noted that for a quote to be taken, the request for bid-offer quotation from the forex liquidity providers had to be accepted, so there is no big storable price as compared to the institutional trading activity.
14.2. Carry Trade
A carry trade is initiated simply by borrowing in one currency, exchanging that money for another currency, and investing the proceeds in that currency. If the interest rate is higher in the currency pair you are long, then you carry the position at a positive interest. The only risk you expect to take is the potential for shock. Therefore, carry trade is like interest arbitrage. Carry trade may be a weak signal for the future price development of a currency if other things are changing at the same time as the interest rate. Carry trade has been an attractive and profitable trade for many years. The major risk here is instability in returns of a long and successful trade as there are very low payouts over time. Carry trade opportunities only come after a consistent and substantial spot appreciation. If the carry trade is performed according to the above said details then profit is possible with all the conditions satisfied.
Carry trade involves borrowing in a low yielding currency and investing in a high yield currency. Of course, the funded currency should appreciate and the target should be an overall profit. This trade is also based on interest rate differentials between countries. It is based on the general assumption that global market economies grow, and global open economies will grow more than others.
15. Monitoring and Adjusting Strategies
With any trading strategy, the trader should always keep their eye on the market and continually investigate ways to improve their strategy. Is there an underlying fundamental reason for a conflicting trade? Does it make sense statistically? We are all human and make mistakes. The Forex trading strategy that is perfect today may not be perfect tomorrow.
The main thing to avoid is replacing strategies too frequently with short-term systems that are optimized for a specific market or time period - something that is easy to do with technological advancements for automated trading. It is also bad practice to become so attached to a particular strategy that you begin to ignore contrary information, end up trading at the wrong times and places, and lose a large amount of money.
Some Forex traders use a single strategy to trade the majority of the time, then have "backup strategies" ready to use if market conditions change. Traders can avoid becoming overwhelmed with a barrage of conflicting signals and strategies by having only one strategy in use at a time and by making the best possible use of automated trading.
No strategy by itself is perfect. Traders should always be monitoring their strategies to ensure that they still work and adjusting or replacing them should they cease to be effective. With some Forex trading strategies, this requires constant monitoring of the markets. But for others, it is mostly a matter of evaluating performance monthly and making adjustments.
15.1. Tracking Performance Metrics
This is a really useful quantity to help figure out how much money you should allocate to the strategy if any. The mathematical side will be discussed in the "What can we do with Python?" section of this chapter. For now what's important is understanding that information can be taken from the track. How much money does the strategy make on average? How much does it lose? How often do these losses occur? If the losses are happening at a bad time, you might end up in a lot of trouble. How statistically consistent are these results?
For what I will mostly call "track" we are looking at the equity curve of a strategy. If you have a positive expectancy strategy, the curve will generally be moving upwards, starting at the bottom left and finishing top right. However, there will be drawdowns along the way. These show you whether you have a little monkey on your back which is hard to shake. If you look at your profit and loss profile over, let's say 13 years of trading, you might make $100,000 trading your strategy. However, this is probably not guaranteed.
So I've been throwing around this phrase "performance metrics" which up till now I haven't defined. We've been testing the system but testing without tracking your results is completely useless. Absolutely completely useless (as are most things without good metrics). So pay attention to this section, and implement this and understand how to interpret them. Let's analogize parametric vs. non-parametric models.
15.2. Making Adjustments
Highly successful companies do not view the reviewing process as a threat, contradiction or sign of disloyalty. These companies work at materializing the strategic intent, forcing them to scrutinize every decision and call into question anything that will not lead them to corporate success. Few mistakes are viewed as catastrophic errors that threaten executive job security, thereby permitting correctionsoften through being willing to take risksthat other companies merely theorize about. Only by providing the opportunity for learning can the reviewing process be accomplished. When reviewing works, people are more willing to test their nether-world hunches, delve into the farther reaches of their subconscious, link their ideas with those of others, privately disclose their fears and doubts, and act on their instincts.
One of the most important differences between a company with a multi-year growth rate of 20% or more and one with a lower consistent growth is what you do with negative feedback. The executive who has a clear view of his company's strategic intent and is loyal to this intent knows that catching problems early and diligently adopting corrections are not inconsistent with a long-term growth strategy. It means only that the company must be prepared to make more adjustments than initially estimated in order to reach its strategic goals. The Sunday-night meetings for executive adjustments to be made by Monday can take on a rarefied sense of occasion, especially if negative feedback is leaking steam and tempers are high.
16. Staying Informed
The Forex market depends on the economy of the country. In recent years, Forex strategies are specially made to know the correct movement of the market. Forex trading is acquiring new tools and techniques regularly. The Forex market is volatile and confusing. Every trader can use Forex trading strategies that match their style. The Forex market is perfect for suitable strategies. It is good to choose the Forex trading strategies that suit you best. You should know this when you attempt to do your business in the market. The upside comes with the downside. Understanding Forex trading strategies plays a vital role in obtaining gains. You might either win or lose when you use a Forex trader strategy. Understand perfectly and implement effectively the Forex trader strategy for a wonderful win.
According to most Forex traders, the Forex market is better than the stock market. There is flexible timing and the payout is usually higher in the Forex market. Compared to the stock and future markets, the Forex market is the largest and best in the world. If you are a successful Forex trader, you can earn a fantastic income. The Forex trading strategy differs from trader to trader. You may adopt Forex trading strategies as per your convenience, and it all depends on your intention. You can earn a very good gain, provided you recognize the currency trading strategies. Forex trading does not charge commission fees. The earning is generally good in such trading. Forex trading can be made effective using a Forex trading strategy.
16.1. News and Market Updates
Follow along with the color-coded headings, knowing that the news and market updates that come only from are the only firm's data that pay attention to. It can disappoint traders by lack of reports, the same rebounds, and other defects, but it is essential and valuable information not readily available elsewhere. is notable and is seen to have momentum indicators. It has forums where traders talk and argue with one another each day. There, it is possible to observe crowd psychology in action, quite possibly profitable. The main value is the ability to monitor forex updates as they happen, and it is worth keeping the most useful parts of the website in favorites for daily checking.
News is a tool that can help traders identify and profit from the strongest currency pairs in the forex market. News reports update frequently, providing a daily feed of information from around the world. They are divided into several categories so that traders can see exactly what is important to them.
16.2. Economic Calendar
It is known that the economic calendar reflects the various economic indicators, highlighting those that can affect the market. It will always be dynamic since they bring new entries, updates, or changes with new data. While there is no economic calendar experiment, the trader can use a news aggregator service, such as or Forex Factory, to follow the financial news of the moment.
An economic calendar is a key tool that helps traders not to miss important events that may affect the movements of their instruments. But much more than just a tool, an economic calendar is essential in the Forex market, having been accessible to the common trader allowing efficient decision making. Among the many features offered by the most diverse online trading platforms, an economic calendar constantly updates a variety of trading indicators. To do this, just put the instrument in position, the time schedule to watch and it is possible to know the times for any trading sessions like the London, New York, Tokyo, or Sydney sessions, the times when the country is open or closed. Users will also know the importance and impact of certain indicators. The better the calendar, the more detailed the information, and the outcome will be better decisions on forecasting, more competitive positioning, and a better interpretation of signals.
17. Choosing the Right Tools
The most popular tools are leased out by a brokerage firm using their margin account, but some can be purchased as a package from firms such as Reuters or Bloomberg, or even online trading forums. The most popular trading tools are MetaTrader 4 or 5, AvaTrader, MBT Navigator or Trade Desk, NinjaTrader, and ThinkOrSwim. Optional extras include MetaStock, Biocomp Profit, Best Choice, TradeGuider, and YumYum, and other small software engineering firms' products. Some of this software permits others using the same trading platform to follow your trades should you become a successful trader or are famous for some other reason. The advantages of some trading tools include charting options, the provision by the software engineering firm of high-quality services, and if the tool is leased out. The disadvantage of others is limited to no support should you lose your internet connection. In summary, the best trading tools are the ones that have no bugs, with good customer service available from their software engineering firm.
We offer suggestions about different types of accounts that you might want to open initially. It is not possible for all tools in the margin to be discussed within the available space, but we will cover enough to get you trading effectively. For each trading tool, we will describe how its fundamentals work, what things you should look for when choosing it, and some of its advantages and disadvantages. A poor choice or a lack of understanding about trading tool fundamentals can lead to financial disaster. It is important to try out different trading tools using your virtual trading system that you are given when starting live trading after going through these steps.
17.1. Trading Platforms
The two types of trading terminals in the currency markets that are often used are the dealing desk (DD) terminal and the non-dealing desk (NDD) terminal. In the DD type of terminal, the firm sets the bid-to-ask price for its clients. The NDD type of trading terminal, also known as straight-through processing, uses an automated system where the dealing firm acts as a mediator. In this case, the traders get the best bid and ask prices from a collection of various contributing liquidity providers through the FX trading software. The liquidity providers (Tier 1 market makers, large banks) offer the best prices by rewarding the brokers with low spreads and high liquidity. The prices received from the contributing banks are processed through the FX trading application, which immediately fills the trader's active cryptocurrency order at a price level that the trader executes by clicking the buy or sell button in the trading terminal after seeing the best offer. Before you can trade, you will be asked to register an account online, and, in most cases, fund your account with your chosen broker.
Professional management software is compatible with the trading software and automatically sets a trading plan in place. It confirms the trading level with the investor who chooses the size of the position. Trading orders and trade levels are constantly updated until the position is closed. The forex trading platform is known as a front-end platform, which is accessed through a broker. The best trading platforms offer good charting tools with fast execution of trades.
The forex market is a 24-hour market, and trading usually takes place through electronic trading platforms. Online trading platforms enable private traders and investors to access the forex market in real time and to trade various currency pairs. Trading platforms usually come as a software package with your forex account, and you need a username and a password to access your account. Personal details are also coded for extra security. When sourcing an appropriate forex broker, make sure you have access to the right trading platform for your needs. You may need to master the use of the trading platform by predetermining your buying and selling levels, selecting stop-loss levels, and managing your account balance.
17.2. Charting Software
The chapter ends with a discussion on how to choose charting software, what are the essential ingredients, and what major features one would expect to find. Remember, when you start to use the software, try different types of charts, such as bar and candlestick, and spend some time drawing in the trends to see if your observation skills are improving. Keen observation is the key to chart analysis and pattern recognition. This will come with time and practice. Charting is knowing and understanding the initiation of trends, knowing when to enter a trade, and knowing when to take a profit and leave the trade. All these elements should be defined, and there should be no movement until the appropriate conditions are met. Financial markets have the opportunity, the give, and the take. Now go and do it.
There is then the choice of software that runs on the user's desktop. There are really three types of software for the user to choose from: The first being software that downloads on someone else's server and is then run from the investor's computer. The second type is software that is developed and runs on the user's computer. This is the least expensive type of software but can be time-consuming and require some type of maintenance on the part of the user. The third type of software is a combination of the two, where the data is downloaded onto the user's computer, but analysis is done on a server operated by the software vendor. Any of these types of charting software have their own features, pros, and cons.
Chapter four discusses different types of charts and different types of charting software. Since charting is such an essential part of technical analysis, it is essential that all traders have access to a good charting program or software. As technology advances, there are some very good charting programs that can be accessed on the internet. These programs actually run on someone else's server rather than on the investor's desktop. This type of software service is known as ASP or application service provider. The only problem with ASP programs is that the cost is generally high.
18. Social Trading
It took a few years to develop your strategy, together with mistakes done in the path that could have cost you thousands of dollars. But a more experienced trader can give you a good path from the start, using a more experienced trader, you can avoid a part of the trials. Online social trading networks can be an additional benefit when trading with financial and investment knowledge such as with forex trading, for example. The goal is to be just self-sufficient in the long term. Like a few Pros, superstars have had a focus on cooperation. You're going to start learning from someone elses actions. Additionally, human traders can predict future actions based on the information they have and the characteristics of the competitors. A common person cant compete in the Forex market, the pro trader, even with a small account, can make use of trading conditions available to the retail trader up to a point of 90% of the profits of their provision of liquidity in the market. So you have new premises or solid education to make a viable selection of the pro that should be used as the signals provider of a part of your risks capital.
How you can use and get profit from the tools present in your platform - you should get knowledge about trading, the signals present in the platform, and how they use stop-loss and take profit for most of the trades. When is the best time to join the movements made by part of the platforms, if you know when to start trading against the popular decision you have a very high probability to profit even when most of the followers are at a loss. How they manage conflicting entries - because most of the time when you have to copy a pro you could have few traders that have opposite signals. The most evident reason to use a social trading instead of a signal trading where they take advice from professional traders over a computerized program, is because a professional is able to base its trading decision on a sequence of knowledge and confounding information.
Some of the knowledge that you can acquire with these platforms is: a great self-explanatory contact, if the Master or Key account traders are confident in their strategy, they invest more than 50% of their trading real money, if the pro trader has account like this, you can expect to have a consistent profit about money management you can get a good knowledge, after 1 or 2 years of coping the trade, how much money should you invest follow some signals you can learn how to determine if a particular trader concern too much risk in their trading because one of the essentials things to have is a low drawdown.
The social trading is the perfect way to start your trading career, like a son takes the family business from his father, you can start learning based on someone elses experience and learn a profitable business in a smooth way. The strategy that you are going to use based on this trading mode is simple, choose a successful experienced trader to copy. The person that you pick as your mentor should be a trader that have had a profit, most of the time this type of trader is called a PRO, he shouldve at least 1 year of history with a profit over 10%, overall there are few traders with all these features, you can grade them and make a chart, for their current performance he should have at least 30 days of profit.
Social trading networks are platforms that allow you to follow other traders, copy their trades, and profit from their knowledge. These platforms also give you the opportunity to share your trading view and to follow or copy the trades of others that are on the platform. Most of the social trading platforms make money based on the number of traders that are following or looking for other traders to follow. This is not a bad feature because they charge based on the actual number of active followers, so there is no fee if you don't copy any pro.
18.1. Introduction to Social Trading
18.2. Forex Social Media Since the usage of the Internet is very popular in almost every part of the world, today we find many communities doing forex social trading. Private investors invest or follow the examples of professional traders with quite a lot of money at stake. They can let the fund managers work for them. Because fund managers have no payments or bonuses, they only take a small fee out of the profit they make. When they lose, the fund managers will have a deficit. However, information is a crucial asset when you are working in forex social media. Every trader always needs the most accurate news in the forex trading market. To get this news, they have to move to the forex brokers. With a fee, investors can get a forex broker providing the forex social media news they need. There are so many forex brokers, and all of them do the same job but using different methodologies. Some companies apply programs using specialized algorithms. Other companies send odd forex reporters to all over the world asking and gathering forex ideas and news. Beside selecting proper companies, investors have to pay attention to some basic rules before starting real investment. Remember forex trading means risking money for good profit. Because of all this, the investors select relying a specialized professional for the forex broker. It is quite dangerous because you can never question forex decisions and forex news. However, despite these drawbacks, forex social media is joining the possible investment opportunities presented by the Internet.
The fundamental principle of social trading is to be able to copy the transactions instantly and therefore gain profit as the very first trader. It refers to the interactions between some forex traders online. Today, social trading does not have only one form anymore. Besides copying the transactions of your mentor trader, traders can also share, discuss, and comment on his forum. Of course, the trader should offer such privilege, and other traders can look into his posting and change the comments. Secondly, traders can capitalize information designed by the leader trader. The publication of such information can be done reversed validly either in a full or partial form. In short, today modern forex investors enjoy the advantages of advanced computer technology, availability of online resources, and abundant human creativity.
18.2. Benefits and Risks
Although not as voluminous as currency transactions related to commercial and financial activities, increasingly, individuals and institutions are trading in forex for good reason. Foremost is the high liquidity, the constant and swift change of currency prices, and the opportunity to profit from both rising and falling markets. Even in a global uncertain political and economic environment, and no matter what happens in a particular country's money market, one's ability to trade twenty-four hours a day, five days a week, is of great benefit. With the use of electronic trading, traders are enjoying significant cost savings due to the reduction of overhead, intermediate, and miscellaneous expenses. Efficient pricing also exists. There are no unknown commission fees paid on forex trades. Naked short selling is permitted, and there are no exchange fees paid. No stamp duties are levied. Variability is minimized. Indeed, it is impossible for external factors to influence the standard deviation. On a constant rise, there is no exchange rate slippage. Market abuse is impossible. Wash trades do not happen, neither is it possible for other market abuses to surface. Market integrity is never compromised.
Let's start by saying what forex is for anyone who may not know. Imagine a man named John who buys some Japanese yen with US dollars and then sells them later at a profit. By his act, John has engaged in forex. Forex, the exchange of one country's currency for another's, is the world's largest market. John is just one of many who have discovered that successful trading in forex is exceptionally achievable. There are valuable benefits for which both large banks and brokers, and even individual traders worldwide, engage in forex every day.
Benefits
19. Legal and Tax Implications
If you are poor in money, start learning forex today. However, if your performance is believed to be bad, your losses will be great and consequently your position will have changed to 'Poorest and most inferior or unfortunate' by 31.12.2011. Environment influences behavior with the passage of time. The educated elite, billionaire class, have a separate set of principles each class of people follows. If you belong to the latter class, you may experience an increase in your standard of living in the long run by exchanging your rupees to dollars. Also, try to transcend the 'just over broke' concept to that of financial independence. Buy an apartment, a car, etc. The poor class of renters should, with a thrust of self-determination, control more in their lives and in others' lives. Use perseverance to change class and aspire to become a part of the mindset that you hate with all your might. When you belong to the class of wealthy people, you will have most good things in life and free time. When you have little or no money at your disposal and want a comfortable, advantageous life, start earning today itself.
I have shown you simple ways for reaching from a state of poverty to affluence and wealth. 'Poor' is a relative term. At present, you might be living at a residence which is not self-contained like a bedsit, and without many creature comforts of life, depending on loaned or hired things as a result of your poverty. This is for you to make a beginning today and not to continue being mainly poor. You should calculate your potential profits. In fact, there are no advantages to be derived from forex trading unless you are poor.
Since the business of forex trading uses very little capital and does not require much strategy in the main, the person involved in forex trading should try to treat the profits as income. On the other hand, the person who is a professional forex trader can earn huge sums within a short time frame as well. Just like the profits, the person can at the same time incur losses which might be overwhelming. The person must be prepared to pay the taxes and other expenses.
19.1. Regulatory Compliance
Finally, effective risk management requires enabling measures such as compliance committees, or ensuring that ML/TF compliance is a condition of service for relevant employees and managers to maintain its integrity. These compliance frameworks can complement the expectations to implement risk-based customer due diligence programs, including with respect to politically exposed persons (PEPs), high-net-worth customers, heads of international organizations, everyone who is invited to enter into a business relationship whenever the account is used, and transactions for persons, including the nature of the business relationship and expected transactions. Compliance requires an ongoing risk-based approach, including the prompt identification and review of potentially suspicious transactions and implementation of ONGT-specific requirements for protection.
Compliance with customer due diligence requirements is of foremost importance when it comes to the implementation of risk management best practices. These requirements are generally part of legal responsibilities to maintain appropriate risk management processes, so that they can be enforced through effective implementation of appropriate and compatible strategies. To facilitate the implementation of appropriate customer due diligence requirements, limited flexibility is given as to the methods for identifying and verifying customer identification data. The establishment of accurate and timely risk models can also be made easier if corporate-client information, such as credit ratings, legal status or beneficial ownership, or information about a corporate client's principal financial officer or directors, can be readily accessed.
19.2. Tax Considerations
Foreign currency contracts are required by law to be marked-to-market at year-end. Section 1256 states that any contract with an expiration period of up to one year from the time it was determined must be accepted as a Section 1256 contract. Also, consider using entity partnership status for your trading to ensure Mark-to-Market use. Your partnership holding will mark each open trade on December 31st. Close the trade and take the draw to give you the effect of "realizing loss" so you can use it against your realized gain cash withdrawal. After April 15th, then re-establish the perspective trade back. You only need to be out of the market for a week.
The hardest concept for traders to understand is how to treat foreign currency gains and losses on their federal income tax returns. Our regular clients (like you) helped us grow, so we confidently inform you that most traders will qualify for the holy grail of tax treatments - Section 1256 tax advantages on foreign exchange transactions for major currencies. It sure is easier to make the smiley face when Uncle Sam is trying to take a little less from us in April.
20. Case Studies
Foreign exchange trading was the path I took with my first million dollars. The retail forex market is not for novices, and I wound up paying a high price for my ambition in dollars, time, and motivation. Each of these case studies is about a dozen actual trades on paper, most of it for highly leveraged gains and losses which were not likely considered realistic at the time. Controlling the emotional aspect of trading is always the most difficult factor. There are numerous variables that may be used in systems of trading. Variables are more than numbers. They may be time, technical indicators such as indicators and moving averages, price levels, or any other value which is not only based on relationships between numbers. The rules of trading should reflect your brief and the conditions of the market. Different variables can be plugged into the trading model to test the accuracy on past trades. The rule of having a minimum to consider trading is crucial. Do not attempt to force a profit or lose amounts of money. The trading model needs to accommodate the average users.
Case studies are a form of problem-based learning that may be of interest to the readers to demonstrate applications of forex trading strategies. If you are still unclear about using case studies in your learning curriculum, please refer to the education literature. It is best to develop a case study based on personal experiences, but you could adapt this to suit your own specific situation. To get the best out of the forex trading strategy case studies for your group, you need to lecture on forex trading strategies first.
20.1. Successful Forex Traders
Only the forex trader will understand the concept of how important the 'house margin' is in opening positions. A fixed sum of $1000 allows complete control over a multiplied amount of $100,000, opening up the possibility of earning on actual market leverage over the deposited trade capital, which not even the furthest advanced millionaire can equal in utilizing leverage. Forex trading strategies such as forex scalping, forex hedging, and pyramiding are what the most successful traders use. They soon realize the advantage by looking at online forex trading figures and the number of successful forex traders. The statistics show that the larger number of successful forex traders are also the most successful. The only really big advantage that small forex traders have is the amount of leverage and the ability to pyramid into big positions without the use of open market operations that the bankers and the hedge funds are currently using. If broker houses allow online forex traders to open positions, knowing the power of leverage and having the same minimal market impact on the currency traders as the big banks, forex funds, or forex hedge funds, then the traders would continue to develop custom forex trading strategies.
Until just a few years ago, forex trading was the preserve of banks, corporations, and wealthy investors. This is no longer the case. Through the leveraging effect of trading on margin and advancements in technology and software, online trading platforms let the small investor trade on equal terms with the banks and large corporations. The word leverage is used to describe what a small investor can achieve by placing a deposit for a margin trade. Also significant is the house margin, which specifies how much the forex trader may use as a lever and is specified by each individual broker. An amount of $1000 might just give access for a $100,000 trade by the forex trader, as the trades are often leveraged at the rate of $100,000 for a $1000 deposit on a margin of 100:1.
21. Conclusion
Forex trading strategies using technical analysis has been the simplest, most basic approach used by home-based forex traders as one can simply find a system that you are comfortable with and just spend an hour a day following it. While many forex trading strategies have technical trading approaches and are capable to warn you when to buy, when to sell, it is always best to familiarise oneself with the story behind the trades. It always helps a home-based forex trader like you would grow to be if you spend a little bit more time to understand the currency charts further.
It is great that forex trading online now makes it more possible than ever to generate an income by trading from traditional trading approaches such as fundamental analysis, through to computer systems driven automatic forex currency trading strategies like managed forex trading that can trade without you 24 hrs a day. And also finally home-based forex traders (I call them the forex entrepreneurs) who tend to commit an hour of their time following a system training the system with just a simple check and click of the mouse, and on with the day, spending their time as they please without being physically working in the office, shop or factory.
21.1. Recap of Key Points
So, before I delve into the trading strategies and techniques that I use, I will discuss what prevents 95% of traders from achieving consistent profitability.
The reality of trading is a little different. Making money trading the currency markets nowadays requires skilled, profitable decision making, crystal clear trading strategies, and a sea of trading expertise, currency market knowledge, and sound trading tactics that you would never find unless you have the technical expertise and discipline to trade among the sharks, the Barclays the City institutions, hedge funds, and sophisticated individuals. Trading technical analysis on charts with low-quality data and inferior tools is a surefire way to keep the good old boys clubs at the expensive golf clubs, hoping that you will not come over and start playing with their clubs.
While the fact that some few traders do make money is no doubt valid, whether the process is easy is another matter. Unfortunately, many new traders arrive on the scene with the mistaken belief that they can make money without spending much effort coming to terms with trading mechanics, the intricacies of technical analysis or pre-empting the psychological costs they will incur.
In this module, I have introduced my philosophy to trading. I have made my case that trading the Forex market is a wise career pursuit for anyone interested in the freedom and life choices that no other FT job allows. By learning a very small set of rules and exceptions, you can systematically take money from the market often enough to become rich and satisfied with your trading and indeed any other aspects of your life you choose. So, as long as the market continues to fluctuate, Forex trading is pretty much a sure thing.
21.2. Final Thoughts
The quickest way to gain trading experience is through direct experience. How do you trade without spending at least one dollar? Most people never think of this option. Rinse and repeat this technique for a trading career without a lot of 'up front' risk. Never let your emotions determine your trading decisions. Many people start trading unprepared, not understanding the immense effort trading takes. Forex trading strategies online are available to people who do the homework and pay the cost in terms of time for downloading programs and testing of trading strategies to see which ones make comfortable profits. Ignore the alternative. These trading strategies can triple a small account in one month, but seem non-traditional, so many people mistrustful of the Internet simply ignore the possible opportunities.
People trade for a number of reasons: to make an income, to protect the value of an asset, or to speculate on the price of something going up or down. In recent years, many preconceived notions about trading have been dispelled. You do not need to have a lot of money to make money trading. You do not need to be highly educated to use many of the strategies available, nor do you need years of experience. You do have to be open to new ideas and be able to change approaches based on feedback of the approach.