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Expectations For Trading Or Investing Returns
2007-07-27 06:27:00 Clearly, anyone who trades does so with the expectation of making profits. We take risks to gain rewards. The question each trader must answer, however, is what kind of return he or she expects to make? This is a very important consideration, as it speaks directly to what kind of trading will take place, what market or markets are best suited to the purpose, and the kinds of risks required.Let s start with a very simple example. Suppose a trader would like to make 10% per year on a very consistent basis with little variance. There are any number of options available. If interest rates are sufficiently high, the trader could simply put the money in a fixed income instrument like a CD or a bond of some kind and take relatively little risk. Should interest rates not be sufficient, the trader could use one or more of any number of other markets (stocks, commodities, currencies, etc.) with varying risk profiles and structures to find one or more (perhaps in combination) which suits the n... More About: Trading , Investing , Expectations
Forex Trading - 2 Simple Tip to Increase Profits Dramatically
2007-07-15 13:28:00 Here we are going to give you 2 simple tips that will instantly improve your overall forex trading results. There simple to learn, easy to apply and could help you achieve big profits consistently of 100% or more annualized.Consider this point:Forex trading is all about being right with your forex trading signals and making money - You don't get rewarded for the effort you put in to forex trading strategy the only thing that matters is profit.Here we are going to focus on working smart not hard to make more money from trading.Before we discuss our forex tips in greater detail, lets look at two key points in regard to currency trading.1 The Big Trades Only Happen a Few Times a YearIf you look at any currency chart the really big strong trends only occur a few times a year and these are the trends that offer the best risk reward. The rest of the time the markets are either trending sideways with no clear trend, or showing high volatility which is hard to trade.2. Trading The OddsIf y... More About: Forex Trading , Profits , Simple
Psychology Of The Winning Trader
2007-07-13 10:39:00 It is said that nine out of every ten traders loose money. It is also said that day trading is seventy five percent psychology and the other twenty five percent divided up between your trading system and proper money management. Now I do not know if those facts are true or false. I have never seen a survey published on the topic, maybe someone can help me with that information, but let us assume that if it’s not absolutely true then it is nearly true. This would mean that most traders are lacking the proper psychology for trading.Therefore we need to look very carefully at this business of our thought patterns, what we are thinking while we are trading. All our actions are governed by either pleasure or pain. Whatever we do, we do it to either to experience pleasure or escape pain. We have a need to avoid pain and a desire to gain pleasure. We need to do some introspection and decide what is it that drives us while we are trading, pleasure or pain. Do you jump into every trade eve... More About: Psychology , Winning , Ology , Holo
Avoid Making Predictions in the Market
2007-07-12 07:38:00 Most people make a big deal out of market prediction. They think they need to be right 70% or better in order to "pass" the exam that the market gives them. They also believe that they might get an "A" if they could be right 95% of the time. The need to predict the market steps from this desire to be right. People believe that they cannot be right unless they can predict what the market is doing.Among our best clients, I have traders who continually make 50% or more each year with very few losing months. Surely, they must be able to predict the market very well to have that kind of track record. Well, I recently sent out a request for predictions and here is what I got back from some of the better traders.Trader A; "I don't predict the market, and I think this is a dangerous exercise."Trader B: "…these are just scenarios, the market is going to do what the market is going to do."Ironically, I got these comments from them despite the fact that I was not interested in any of their ... More About: Market , Predictions , Avoid , Makin , The Mark
Forex Trading - Instantly Increase Your Profits With The 80 - 20 Rule
2007-07-11 10:52:00 The 80 - 20 rule was not devised for Fore x trading - however if you apply it in your trading, you'll instantly increase your profit potential. The rule is simple to understand and apply - and all Forex traders should use it.So, what is the 80 - 20 rule, and why is it so powerful in terms of making Forex profits?The Logic of the 80 - 20 RuleIn the nineteenth century, Vilfredo Pareto, an Italian philosopher, observed that a small section of the population held most of the money and power. He postulated that in most countries, 80% of the money and power was controlled by around 20% of the people. Therefore, 20% of the participants accounted for 80% of the results.The 80 - 20 rule applies to many other areas of life - including Forex trading, and in simple terms, the key point to consider is this:80% of your results will be generated by 20% of your efforts.This also means that:20% of your results will be generated by 80% of your efforts.In Forex trading, it's a fact that most traders ... More About: Trading , Forex Trading , Profits
Dollar in Tight Range ahead of Bernanke, BoC Rate Hike Expected
2007-07-10 10:47:00 Dollar remains mixed in quiet trading today. With wholesale inventories as the only economic data scheduled to release from US today, market's focus will likely be on Bernanke 's speech on inflation. However, Bernanke is indeed not expected to deliver any surprise today. In particular, with oil prices staying above $70 a barrel, Fed would likely remain highly alerted about inflation risk. Recent growth data support moderate expansion in the economy in the second half of the year. Meanwhile, Bernanke has warned the risk of spillover of the housing market slowdown recently already. More consolidation will likely be seen until Trade Balance and Retail Sales later this week. Though, May trade balance in UK could trigger some volatility in the Sterling.The biggest mover today could be the Canadian dollar which recovers mildly from a fresh multi-decade high against dollar at 1.0442 made yesterday. BoC is widely expected to raise rates by 25bps to 4.50% today, after being on hold 8 times ... More About: Dollar , Hike , Range , Rate
How to Read a Chart & Act Effectively
2007-07-09 07:31:00 IntroductionThis is a guide that tells you, in simple understandable language, how to choose the right charts, read them correctly, and act effectively in the market from what you see on them. Probably most of you have taken a course or studied the use of charts in the past. This should add to that knowledge.RecommendationThere are several good charting packages available free. Netdania is what I use.Using charts effectivelyThe default number of periods on these charts is 300. This is a good starting point; * Hourly chart that's about 12 days of data. * 15 minute chart its 3 days of data. * 5-minute chart it's slightly more than 24 hours of data.You can create multiple "tabs" or "layouts" so that it?s easy to quickly switch between charts or sets of charts.What to look at first1. Glance at hourly chart to see the big picture. Note significant support and resistance levels within 2% of today?s opening rate.2. Study the 15 minute chart in great detail noting the following: ... More About: Read , Chart , Char
Trading Forex with a Strategy
2007-07-06 06:38:00 Trading successfully is by no means a simple matter. It requires time, market knowledge and market understanding and a large amount of self restraint. ACM does not manage accounts, nor does it give market advice, that is the job of money managers and introducing brokers. As market professionals, we can however point the novice in the right direction and indicate what are correct trading tactics and considerations and what is total nonsense.Anyone who says you can consistently make money in foreign exchange markets is being untruthful. Fore ign exchange by nature, is a volatile market. The practice of trading it by way of margin increases that volatility exponentially. We are therefore talking about a very 'fast market' which is naturally inconsistent. Following that precept, it is logical to say that in order to make a successful trade, a trader has to take into account technical and fundamental data and make an informed decision based on his perception of market sentiment and mark... More About: Strategy , Forex , Trading , Rate
The Market is always Technical
2007-07-05 10:16:00 Are there times when the market trades technically and others from fundamentals?The easy way out when the market doesn't move as forecast…This is a comment I often hear or read… "In the absence of economic information the market traded technically".You should see my face glow red with frustration when it is repeated again… and again. What a lot of absolute bunkum. Whoever says that has NO idea what technical analysis is about.The market is always technical.The biggest issue is whether the analyst is reading the signs correctly and that is down to the skill of the individual analyst.Let's get this straight. Technic al analysis is a wide ranging group of techniques which obtain information from price action or derivatives of price action and provide indications to the analyst on the expected direction of price. The basic concept that is often said is that it is based on the assumption that market participants will react in the same way to certain events in the market and since ... More About: Market , The Mark , Always
First Of All, Know Thyself
2007-07-04 10:28:00 One of the most important elements of success in trading (and life in general) is knowing yourself. If you do not understand how you tick, you will never be truly prepared for the demands of trading, and likely your performance will suffer as a result.Let me use myself as an example.I am what might be considered project oriented. By that I mean I like to move from one thing to the next – always have something upon which to focus my attention. As my friends and colleagues can attest, once I complete a project - and sometimes even before I do - my thoughts shift to the next one. I actually get antsy if I have nothing lined-up. Predictably, this is reflected in my trading.We can actually think of trading as a series of projects. Each position one takes on is a new project which incorporates analysis of some sort (automated or otherwise) and trade decision-making. When a position is closed out, it is like wrapping up a project. It’s over and done - time to move on to the next thing....
Making the Momentum Indicator Work for You
2007-07-03 13:17:00 When analyzing markets I often use the term "momentum" when referring to the amount of strength the bulls or bears have at a given point in time. This market "momentum" is a key indicator regarding the strength of a trend, or whether a trend is about to end or begin.When I worked as a market reporter on the trading floors of the Chicago Board of Trade and the Chicago Mercantile Exchange, I (as well the floor traders) had a very keen sense of which camp (bulls or bears) had momentum on their side. This was especially true in the grain pits at the Board of Trade. One obtained this keen awareness by being right on the trading floor, talking with all the market-makers who helped determine prices.By examining charts, cycles, seasonality and other technical indicators-and near-term fundamentals--one can also get a good reading on whether the bulls or the bears have the edge in any given market. However, I must admit that when trying to gauge market momentum there is no substitute for wo... More About: Work , Momentum , Indicator , Makin , Indica
Day Trading: Great Fun - If You Are Ahead…
2007-07-02 12:30:00 Imagine with me the dream, you have just woken up at 8:00 to the whistling of song birds in the trees outside your South Carolina beach home and you are beginning to smell the gourmet coffee that brews when you wake up. You look outside to see another beautiful day ahead and instead of being depressed because you will have to waste it inside an office with fluorescent lights blaring down on you inside your cubicle you are welcoming it with the enthusiasm of a little child on the first day of summer break. You see you are a day trading guru, who from the privacy of your own home and with the convenience of a high speed internet hook up, and are therefore free to do as you please.This is true because you actually enjoy the thrill of the market and the challenge of fast paced decisions and strategies that go with the life of trading stocks on a daily basis. You are in this not for the retirement that is slowly and steadily becoming enough to support you in your “golden years,” you ... More About: Trading , Great , Day Trading , Ahead
Day Trading Your Way To Success
2007-07-01 09:52:00 If you are interested in day trading you first need to know what it is all about and to understand the basics of day trading. For starters, a day trader is a person who is very active in the stock market and makes several trades a day in an attempt to make quick gains by buying and selling stocks in a short time span.As the market is never the same day to day, no one particular day trading strategy will work each time. To be successful, you first need to understand how the market works and get a feel for the market.This includes recognizing the stocks' basic trend, the long and short setups, when to enter a trade, and where to place stops. Another very important basic is how to protect your profits and minimize losses.Once you have learned the basics and are ready to try your first day trade, here are some tips and guidelines you should keep in mind that is essential to your success as a day trader.Being a day trader requires a lot of time and practice before you get used to the ev... More About: Trading , Success , Day Trading
Winning Traders Are Flexible
2007-06-30 13:50:00 How flexible are you in your everyday life? When you are in a new city, do you worry about getting lost or do you just go your own way and assume that somehow and someway you'll eventually get back to your hotel? Do you get upset when you are told you are wrong, or do you welcome criticism or an opposing opinion? The ability to be open and flexible often makes the difference between winning and losing in the trading businessTrading is a scary business. When your money is on the line, you naturally feel defensive. The more uncertain you are, the more rigid and defensive you become. It's a natural, biological response. When humans are threatened, it is often in their best interests to choose a specific course of action and stick with it. Imagine that you are changing lanes in rush hour traffic. If you commit to a lane change, it's essential to stick with your course of action. If you waver, you'll confuse other drivers and may end up causing an accident. When we are in potential d... More About: Traders , Flexible , Winning , Lexi
How To Increase Forex Profits 100% in 10 Minutes
2007-06-29 06:27:00 This simple exercise will increase Fore x profits 100% and works for 99% of all short-term FX traders - stop trading so much - widen out your stops - widen out your profit targets - and only trade in the direction of the trend indicated by 4 hour chart.1) Stop trading so muchSure there are no commissions but the spreads are HUGE and believe it or not (well you'll believe it after you do the simple exercise below) the spreads are reducing your profits 100%!2) Widen out your stopsInitial stop loss should be a minimum of 23 points; I use between 23 and 35 point stop losses for short-term trading.3) Widen out your profit targetsUnless you think a trade can make you 100 points or more don't do it.4) Only trade in the direction of the 4 hour chartThe real money is made in the direction of the trendSimple exercise1) Download all your trades for the year into an excel spreadsheet (if you don't know how to do this ask your broker for help).2) Determine the dollar value of the spread for ea... More About: Profits , Minutes , Utes
Forex Trading Systems
2007-06-28 10:22:00 Mechanical vs. Discretionary Systems There are basically two types of Fore x trading systems, mechanical and discretionary systems. The trading signals that come out of mechanical systems are mainly based off technical analysis applied in a systematic way. On the other hand, discretionary systems use experience, intuition or judgment on entries and exits. But which one produces better results? Or more importantly, which one fits better your trading style? These are the answers we will try to answer on this article.We will first analyze the pros and cons about each system approach.Mechanical systemsAdvantagesThis kind of system can be automated and backtested efficiently.It has very rigid rules. Either, there is a trade or there isn’t.Mechanical traders are less susceptible to emotions than discretionary traders.DisadvantagesMost traders backtest Forex trading systems incorrectly. In order to produce accurate results you need tick data.The Forex market is always changing. The Forex m... More About: Trading , Forex Trading
The Elliott Wave Theory Demystified
2007-06-27 12:36:00 I've had many readers ask me whether purchasing a trading system for several hundred or even a few thousand dollars is worth the investment. When I say "trading system," I mean some type of mechanical trading system that usually requires one to be "in the market" (either long or short) all or much of the time--or, some specific trading method a trader has devised and deems profitable. My answer to these readers is: While some trading systems or specific methods may (or may not) be useful or profitable, why not spend that kind of money, or less, and attend a quality trading seminar or workshop.Attending a trading seminar or trading workshop allows you to hear some of the best traders and trading educators in the world share their knowledge. Furthermore, the smaller trading workshops allow you to not only learn from the trading instructor, but also likely learn something from your peers who are also attending the workshop.I've attended many trading seminars and workshops over the ye... More About: Elliott wave , Theory , Wave , Myst , Theo
5 Questions You Need To Have Answered Before You Back-Test Your Forex Syste
2007-01-04 10:57:00 As 90-95% of new forex traders lose money within the first 3-6 months this article helps to guide new forex traders by asking 5 questions that the forex trader needs to know prior to back-testing their forex system.Let us jump right in...1. What data type are you using (or going to use)?I know this sounds strange, especially if you have experience from another market such as stocks as their generally is only one type of data source available. However, in the forex market you can have up to 4 different data types: bid, ask, mid and indicative. Each have their own little nuances.If you would like to know more about the data types then visit the article written about the perils of indicative prices. As this will save me from having to repeat the information again and boring those who've already read it.So, if you know you have indicative prices then you know you're in for some good results! However, if you have any of the other three you need to be careful on how stop and limit order... More About: Questions , Forex , Back , Test , Fore
Bollinger Bands Explained
2007-01-04 10:14:00 What are they? Bollinger Bands are a pair of trading bands representing an upper and lower trading range for a particular market price. A market price or currency pair is expected to trade within this upper and lower limit as each band or line represents the predictable range on either side of the moving average. The lines are plotted at standard deviation levels above and below the moving average. This trading band technique was introduced by John Bollinger in the 1980.Why use them? Bollinger Bands can be very useful trading tools, particularly in determining when to enter and exit a market position. For example: entering a market position when the price is midway between the bands with no apparent trend, is not a good idea. Generally when a price touches one band, it switches direction and moves the whole way across to the price level on the opposing band. If a price breaks out of the trading bands, then generally the directional trend prevails and the bands will widen accordingly... More About: Laine
Forex Trading System, What Is It?
2006-12-03 12:41:00 Forex is a foreign exchange system that allows you to buy in and purchase foreign money or foreign stocks. The forex trading system is fast becoming popular with the use of the Internet. The Internet allows you to find out more about companies, anywhere in the world, so you are making an informed decision about what you are purchasing and what you are investing your money in. Most forex trading systems do allow you to make purchases, withdraws, and inquiries online where you can use your money to build additional wealth for your family.A forex trading system will involve you investing your money, in to a company that is overseas. As you learn more about the companies that are in other countries you will learn about what new processes and programs are available. As you learn about the forex trading systems, you will also learn about how you can double and triple your investments in a very small amount of time. Some forex trading systems will require a small investment such as five do... More About: System , Forex , Trading , Forex Trading , Fore
You Never Know What You Will Benefit from in Forex Forecasts
2006-12-03 12:36:00 Possible risks and profits to be made can always be predicted if traders would only have more accurate forex forecast to base their trade and decisions upon. Fore x forecasts are only one way of keeping up with the volatile forex market. Success will depend the most in knowing what and who will affect the rate changes.The forex market has already been through a lot of ups and downs that even fortune tellers would have difficulty guessing what will be its next movement. Making a forex forecast can be helpful but can also be too risky. Besides, doing it is not that easy also.In forex forecasts, nothing specific is given. The traders are not made to hope high and expect more. If you have seen or heard a forex forecast, be sure to check on some projected rate fluctuations whenever and wherever possible so you would have an idea it the forex forecast shows a likely possibility to be true or not.Staying in touch and up-to-date with the latest news and happenings around the globe and inform... More About: Benefit , Casts , Forecasts
Why Successful Traders Use Fibonacci and the Golden Ratio
2006-12-03 11:13:00 Support and resistance levels on bar charts are a major component in the study of technical analysis. Many traders, including myself, use support and resistance levels to identify entry and exit points when trading markets. When determining support and resistance levels on charts, one should not overlook the key Fibonacci percentage "retracement" levels. I will detail specific Fibonacci percentages in this feature, but first I think it's important to examine how those numbers were derived, and by whom.Leonardo Fibonacci da Pisa was a famous 13th century mathematician. He helped introduce European countries to the decimal system, including the positioning of zero as the first digit in the number scale. Fibonacci also discovered a number sequence called "the Fibonacci sequence." That sequence is as follows: 1,1,2,3,5,8,13,21,34 and so on to infinity. Adding the two previous numbers in the sequence comes up with the next number.Importantly, after the first several numbers in the Fibon... More About: Traders , Golden , The Go , The G
What’s the .382 Fibonacci Ratio in Forex Trading?
2006-12-03 11:00:00 It was mentioned in a past article that Fibonacci forex trading is the basis of many forex trading systems used around the world by profitable forex traders. These systems are all based on the famous Fibonacci ratios (.236, .50, .382, .618, etc.) and each of them can specialize in a particular ratio along with other minor indicators in order to make the pinpointing of the entry and exit levels as accurate and profitable as possible.One of the widely used Fibonacci ratios is the 0.382 ratio. As it can be easily seen on any forex chart, currency prices are continually changing and they follow an oscillatory pattern with peaks and valleys. The limit of the peak is usually called a resistance level while the valley is usually called a support.In order to find the 0.382 ratio level what you do is, first; measure the size of the drop or rise over your time of interest. Once you have that value you multiply this by 0.382. Now depending on what you are looking at, a rise or a drop on the pr... More About: Forex , Trading , Forex Trading , Fore
What’s Fibonacci Forex Trading?
2006-12-03 10:46:00 Fibonacci sequence and specially the ratios derived from it are present in many natural phenomena and human designs, giving the specific proportions derived from them close resemblance to a natural law.Fibonacci forex trading is the basis of many forex trading systems used by a great number of professional forex brokers around the globe, and many billions of dollars are profitable traded every year based on these trading techniques.Fibonacci was an Italian mathematician and he is best remembered by his world famous Fibonacci sequence, the definition of this sequence is that it’s formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13 ...But in the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc.These ratios are mathematical proportions prevalent in many places and structures in nature, as well as in many man made ... More About: Forex , Trading , Forex Trading , Fore , Fibonacci |
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