Archive for February, 2010
Long Term Trading vs Short Term and Forex Ripper
February 23rd, 2010
Posted in Forex
There are two critical terms in currency trading – short term and long-term trading. What are they and how they’re different? By definition, short term trading is introduces more risk because with this method a trader makes more trades. The key is quicker profits. On the other hand, long term trading is more thought out, there are just a few trades each month and it is a lot accurate. However, there’s a lot less profit potential because there are even less trades. Foreign exchange trading systems like Forex Ripper, however, try to capitalize on the both. Nobody claims you have got to only use one strategy. You can trade both, short and long term. What that does is permit you to get fast profits in short term, but also be profit-making in the long run. It is important, however, to balance those strategies out. Because the short term system is much riskier, you have to take that into account. You must mange the risk so that the near term losses don’t wipe out your long term profits. Consider the long term strategy as your most important method and work out how much you are able to afford to lose in short term.
The Importance of Diversification – Caliber FX Pro
February 22nd, 2010
Posted in Forex
As a currency exchange trader you probably need to trade with a certainty that you’ll profit and you wish to decrease your risk. And there are several methods to do that – from correct use of stop loss to correct scaling. But one of the most underestimated techniques is the diversification. Very few traders essentially diversify their portfolio thru different currency pairs, and many of them just target one currency pair. While focus is a nice thing, diversification will help you protect your investment.
That’s the message that Caliber FX Pro carries. This system wants you as a trader to diversify your portfolio and reduce your risk this way. It really is a good system to follow. You can choose from 3 currency pairs to incorporate in your forex portfolio. When trying to decrease your risk, use all tools you have available. And that contains the diversification. It will allow you to spread your money across different currency pairs and defend your money that way.
The Best Forex Software?
February 18th, 2010
Posted in Forex
Each forex trader is looking for the best forex software, but does it actually exist? First off, we must outline what the best software is to answer the question. To me, the leading program is not the one that makes most profit but how relieble it is. Making a few lucrative trades is not enough if with the next trade it wipes out your account.
A good system is what is the most important. So the best software would trade with a solid strategy and good money and risk control. It sounds simple, but there are few programs that are able to do this. And there are many that are outright losers.
So when you look out for the best currency exchange EA, look for one that seems to have a decent methodology first. Then look for confirmation that it actually works. Don’t go for a new big thing once it is released, wait for it to prove itself to be good in live trading. Search for old EAs that traders are still using, because if someone is still employing a program one or two years down the line, means it is worth something.
sRs Trend Rider – The Simple Way to Read Candlestick Charts
February 14th, 2010
Posted in Forex
Something to look up: sRs Trend Rider
The wonderful thing about candlesticks is that you can see the direction of price movements at a glance. Not only do you see whether the candle in total is above or below the prior one, but you may also tell by the colors whether it marked a reversal or a continuation of the trend.
Certain patterns are particularly vital in learning how to read candlestick charts.
In some cases naturally the open or close will be the high or the low. In that case you do not have a wick in one or both directions. If there is no wick in either direction, this is known as a Marubozu pattern.
In another case, the opening and closing prices might have been the same. Then there is not any candle body but only wicks stretching up and down from the horizontal line that marks the open and close. This is called a Doji pattern.
If the body of the candle is long with short or non existent wicks, close to Marubozu, this indicates a reasonably steady movement, possibly part of a trend. The color of the candle will tell you if it is an upward or downward movement.
On the other hand if the wicks are long and the body is short or non existent, more like the Doji pattern, this could indicate a troubled market with big fluctuations. Trend based trading will have a tendency to be suspicious of Doji patterns, that might be a sign the market is beginning to become untrustworthy.
Of course one candlestick on it’s own is not enough to form the foundation of a trading decision. You’ll always look at a sequence of candles. For example, you can draw trend lines along the highest highs and lowest lows on candlestick charts. These will help you to identify whether a trend is forming, or if the lines are converging, whether a breakout might be expected. When you know the way to read candlestick charts you can base systems around these prospects.
FAP Turbo – What Are Pips?
February 13th, 2010
Posted in Forex
Here’s something new. I’m not determined if it’s good, but perhaps may be worth a look: FAP Turbo
Currency trading pips are an important part of forex trading that any trader must grasp. They’re the measure of movements in prices, and so of profit and loss. Brokers customarily translate pips into greenbacks and cents for you, or into the currency that your account is held in, if it isn’t US bucks. However , when comparing 2 trades with different position sizes it’s the profit or loss in pips that tells you more than the profit in bucks.
PIP stands for percentage in point. It is used as a measure of change in price . Spread is also measured in pips. The pip is the smallest part of the measured cost of a quoted currency.
In practice, most currencies are quoted to four decimal places, e.g. 1.2315. In this example one pip is 0.0001 units of the quote currency. So if that price changes to 1.2316, the price has increased by one pip.
The japanese yen is the sole one of the major currencies that’s low enough in value to be normally quoted to two decimal places. So when the yen is the quote currency, one pip is 0.01 yen.
GBPBOT – The Simple Way to Test Currency Exchange Systems
February 11th, 2010
Posted in Forex
Article courtesy of GBPBOT
First you may use backtesting. Here you take your system and work out on paper how well it might have done on the recent historical market, i.e. The last six months or whatever period you select. This doesn’t take too long as you can quickly scroll thru historical charts searching for the signals that would have led you to make a trade if you had been operating your system live at that time.
Backtesting should give you an idea of whether a system has potential. Naturally the market is not going to copy in the same way so you do need to take under consideration the proven fact that you may have struck fortunate or unlucky and picked a time when the system performed surprisingly well or badly.
Because of this, it’s best to backtest over the longest possible time and maybe split your tests so that instead of testing, for example, one full year when the market should have been especially powerful or weak, take the first quarter of year 1, quarter two of year two, etc so that you test one 3-month period from every year of four years. This gives you a good period spread without requiring you to cover 4 whole years.
The second way to test forex systems is in a demo account. Here you are working with the live market but not using real money. This technique is slower because you have got to wait for your signals to come up for real . On the other hand, it emulates real live trading techniques with the possibility of slippage and other factors which aren’t gong to turn up in back testing.
Remember that you can test several systems at the same time in a demo account, provided you keep separate records of their performance. Or you may use many demo accounts. In this fashion you’ve got a better chance of ending up with at least one moneymaking system at the end of your period of testing.
Forex demo accounts also have the edge that you are developing your live trading talents and familiarity with a software platform and charting service at the same time as you are running your tests. This gives you solid real time training to prepare you for the moment when you go live with real money. Most forex brokers will provide free demo accounts which you may use to test foreign exchange systems.
Forex Cash Evolution – Essentials For Profit in Foreign Exchange
February 9th, 2010
Posted in Forex
Here’s something fresh. I am not determined if it is any good, but perhaps may be interesting nonetheless: Forex Cash Evolution
1. Patience
You’ll have to wait around a bit for conditions to be right for you to open a trade. It is very tempting to jump in on something that looks good but does not fit your system. Develop patience so you can avoid those random trades.
2. Stop Losses
Knowing how to cut your losses at the perfect time is important. Never hang on to a losing trade beyond a certain point which should be figured out before the trade is opened. It is a fragile matter finding the balance between having a stop loss that’s caused by tiny fluctuations, and holding onto your trades for so long that you make a massive loss. It’ll alter for each system, so be sure you get this right before you begin trading a new system in reality.
3. Impassivity
It is important to remain calm under strain, because there will be lots of that. Do not allow your trading to be motivated by fear, panic or dreams of huge profits.
4. Realism
Forget what you may see in adverts about doubling your money each month. A profit objective of between 5 and 10% every month is a superb return on any investment, and will keep you out of the most risky eventualities.
5. Records
Eventually, keep records of all your trades. Yes it is boring, but if your trading records are in depth they can allow you to take back control whenever things seem to be going wrong. Having results to investigate gives you a massive advantage in forex trading.
Triple Threat FX – The Straightforward Way to Make Money With Currency Trading
February 9th, 2010
Posted in Forex
Source: Triple Threat FX
First, it’s very important to understand that all speculative trading is risky, whether it is in stocks, currencies, commodities or anything more. Nobody earns money on each trade, and that includes the most successful pro traders. So there is a risk that your manager will make losses for you. However, it is true that their results are likely to be better than yours in the medium to long term, even if there are times when things do not go so well.
Second, be advised that for a standard currency exchange managed account the minimum investment can be high. This is because a trader is normally trading your account for you on a commission basis. Obviously, the more money you have in the account, the bigger the predicted returns and the more commission he can expect to make. You can see that it wouldn’t be worth his time to deal with an account balance of 2 thousand bucks.
However, there is another choice. In the case of the standard managed forex account, your money is held in a separate account that you can view and have access to. But there is an alternative way of investing in managed currency trading which is known as a pooled account. Here your money goes into a pool with other clients’ funds, to be traded all together. In this situation it does not matter how much your individual funds are and the company will usually accept small investments.
There is more of a risk with pooled accounts in that you can’t see what has happened. You’ve got to trust that the funds are being held safely and the results are correct. It is critical to check on the background of the company and particularly, whether or not they are members of any regulatory bodies that will defend you in the event of a failure or crash. There’s a real possibility of scams with unregulated managed currency trading, so do your due research.
MT4 Alert – Necessities For Profit in Foreign Exchange
February 4th, 2010
Posted in Forex
Here’s something unusual: MT4 Alert
Forex trading is simple enough, but making profits with it is another matter. Many people start out with gigantic dreams only to suffer from a resounding crash. Here are ten necessities that you have to have if you would like to become a successful foreign exchange trader.
1. Realism
You must be hard-headed about your goals if you are going to hang on to any profits that you make. Forget about making massive amounts of money in an exceedingly brief time : that is only possible if you take large hazards, which will see your profits wiped out as quickly as they were made. Try for a realistic profit goal and keep your trades miniscule while you are learning.
2. Training
No-one was born a successful foreign exchange trader, we all have to learn. Seek out good solid coaching in the fundamentals of trading, including researching the market, risk management and mental aspects. Training comes in several forms and at many prices from free to thousands of bucks. Price and quality are not always firmly related. Having mentioned that, do not expect to get everything absolutely free.
3. Support
There’s not a lot wrong with asking for help when you need it. Just be certain you ask someone who can essentially help you, and not a confused amateur who likes to hang around in forums.
4. Good Trading Practices
Everybody appears to be hunting for the perfect system, but there’s no such thing. Systems don’t work independently of our trading practices. If you have a sound plan, especially concerning risk management, stop losses and profit targets, you can make money with any profitable system.
5. Discipline
But having a sound plan and a good system is not the full story. You also need to develop trading discipline to apply your scheme and your system. Making erratic decisions or acting on the heat of the moment is a recipe for disaster in currency exchange trading.