By John Callingham
If you're one of the many people who want to jump into the
forex bandwagon, you should be on the lookout for the best forex
currency trading system that can help you start out.
But, before anything else, you should get yourself familiarized
first with the basic concepts of currency trading and how it
works. The most basic item on the list is the definition of
currency trading, also known as foreign exchange or forex.
Forex is the exchange of currencies based on how strong or weak
one currency performance is from the US dollar (USD). The
currencies that are usually paired with the USD for trading are
the Euro, Yen, British Pound, Canadian Dollar, Swiss Franc, and
Australian Dollar.
When an investor speculates that there will be significant
changes or fluctuation in currencies he choose to trade, he can
either buy or sell. This buying or selling will spell out if he
has gained profit or lost.
Forex currency trading system should one follow
All forex currency trading systems have different indicators
and styles in trading but there are a lot of similarities that
helps their user succeed in trading.
Simple is best in any forex currency trading system since it
can easily be adjusted in case of any market changes. Too
complicated systems will be difficult to break down to pieces in
case there are any adjustments needed.
Forex system should be able to logically adapt changes
The forex market is one that may experience drastic changes
every now and then. The currencies' values fluctuate too, from
time to time. A very good forex currency trading system should
be able to adjust to the changes that are happening and be
logically efficient to react accordingly so that losses are kept
to a minimum.
System must allow drawdown and recovery
The natural cycle in forex trading is that one profits and gets
rewarded when he takes the risk or loses as a hurtful
consequence of the risk. Trading systems should be able to
follow this natural cycle by allowing 20 to 30% loss and
allowance of a few weeks or months for drawdown.
System must have firm rules of money management in place
Money management in forex doesn't just mean putting a stop when
about to lose a lot. Money management means having a grand plan
that has been prepared in advance to counter any obstacles while
trading. A trading system should have rules set to protect the
user from losing a lot during trading.
The best trading system is easily operated by anyone
If one knows how to play the forex game, the forex trading
system should be easy for him to use. It should be able to
detect signals and perfect timing to help the user execute a
good trading move.
These are some of the common factors among the many forex
currency trading systems now available. It is up to the user to
choose which one he thinks will best suit his trading style and
his skills.
About the Author: John Callingham is a professional Forex
trader who has been teaching people how to trade the forex
profitly for years. To learn more about John's award winning
course on profiting in trading Forex visit
http://www.ForexReviewInsider.com
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=284056&ca=Finances
Wednesday, November 26, 2008
Forex Currency Trading - How Does it Work?
By John Callingham
Forex currency trading is creating quite a buzz these days.
With the rising cost of living, it's not hard to understand why
so many people are juggling two to three jobs at a time and
turning to the Internet to look for money-making opportunities,
one of the most popular of which is entering the Forex market
and trading currency.
Some people still have this notion that to be successful in the
Forex, one must be an accountant, economist, or a genius at
numbers. Contrary to popular belief, success in the Forex market
is now more attainable than ever, thanks to the many tips you
can find online. But before you jump on the bandwagon and join
the Forex hype, it's best if you first take a moment to find out
what Forex currency trading is and how it works.
Forex is actually short for Foreign Exchange, a currency market
in which one currency is traded for another. It is said to be
the largest market in the world. The market consists mostly of
currency traders who speculate on movements in exchange rates.
In order to earn the profit, which after all is the goal of
every Forex trader, they must take advantage of even small
fluctuations that occur in exchange rates. The market has a
24-hour trading day that operates throughout the week, which
makes it convenient for some traders to work during the day and
trade at night.
In the Forex market, every pair of currencies makes up an
individual product and is normally marked as XXX/YYY, where YYY
refers to the ISO 4217 international three-letter code of the
currency into which one unit of XXX's price is expressed. An
example of this is to note 1 euro as equivalent to 1.2045 dollar
as the amount translation of EUR/USD. This is how Forex currency
trading is determined.
Unlike stock markets and future exchanges, when you engage in
Forex currency trading, you engage in a form of international
bank and an over-the-counter market; this means that in the
Forex market, you can't find any single universal exchange for a
specific currency pair. Throughout its operation, individuals
trade with Forex brokers, Forex brokers with banks or financial
institutions, and financial institutions with financial
institutions. Once the European session end, the Asian session
or the US session will start; this ensuring that all the
currencies of the world can continually trade. Traders, whether
individuals or corporations, can react to the news once it
breaks, instead of incessantly waiting for the market to open,
which is what is required in most other markets out there.
These days, with the proliferation of tutorials on Forex
currency trading, average people are given the chance to trade
currencies as if they are experts on the field. It is easy to
learn once you've set your heart on making money this way. And
you can make money, even while you're doing nothing, thanks to
automated Forex trading bots, which can do the trading for you
while you tend to your family, job, or other things.
About the Author: John Callingham is a professional Forex
trader who has been teaching people how to trade the forex
profitly for years. To learn more about John's award winning
course on profiting in trading Forex visit
http://www.ForexReviewInsider.com
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=284057&ca=Finances
Forex currency trading is creating quite a buzz these days.
With the rising cost of living, it's not hard to understand why
so many people are juggling two to three jobs at a time and
turning to the Internet to look for money-making opportunities,
one of the most popular of which is entering the Forex market
and trading currency.
Some people still have this notion that to be successful in the
Forex, one must be an accountant, economist, or a genius at
numbers. Contrary to popular belief, success in the Forex market
is now more attainable than ever, thanks to the many tips you
can find online. But before you jump on the bandwagon and join
the Forex hype, it's best if you first take a moment to find out
what Forex currency trading is and how it works.
Forex is actually short for Foreign Exchange, a currency market
in which one currency is traded for another. It is said to be
the largest market in the world. The market consists mostly of
currency traders who speculate on movements in exchange rates.
In order to earn the profit, which after all is the goal of
every Forex trader, they must take advantage of even small
fluctuations that occur in exchange rates. The market has a
24-hour trading day that operates throughout the week, which
makes it convenient for some traders to work during the day and
trade at night.
In the Forex market, every pair of currencies makes up an
individual product and is normally marked as XXX/YYY, where YYY
refers to the ISO 4217 international three-letter code of the
currency into which one unit of XXX's price is expressed. An
example of this is to note 1 euro as equivalent to 1.2045 dollar
as the amount translation of EUR/USD. This is how Forex currency
trading is determined.
Unlike stock markets and future exchanges, when you engage in
Forex currency trading, you engage in a form of international
bank and an over-the-counter market; this means that in the
Forex market, you can't find any single universal exchange for a
specific currency pair. Throughout its operation, individuals
trade with Forex brokers, Forex brokers with banks or financial
institutions, and financial institutions with financial
institutions. Once the European session end, the Asian session
or the US session will start; this ensuring that all the
currencies of the world can continually trade. Traders, whether
individuals or corporations, can react to the news once it
breaks, instead of incessantly waiting for the market to open,
which is what is required in most other markets out there.
These days, with the proliferation of tutorials on Forex
currency trading, average people are given the chance to trade
currencies as if they are experts on the field. It is easy to
learn once you've set your heart on making money this way. And
you can make money, even while you're doing nothing, thanks to
automated Forex trading bots, which can do the trading for you
while you tend to your family, job, or other things.
About the Author: John Callingham is a professional Forex
trader who has been teaching people how to trade the forex
profitly for years. To learn more about John's award winning
course on profiting in trading Forex visit
http://www.ForexReviewInsider.com
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=284057&ca=Finances
Forex Autopilot System-Make Money While Doing Nothing!
By John Callingham
Earning money just by sitting? Sound impossible but true. If
you are busy looking for ways on how to earn extra cash to save
yourself with the worsening economic condition of your place
then you must have heard about the Forex Autopilot System. What
makes this system sparkle among the rest is that it offers the
idea of 'trading while you sleep'. Having a system which is
competent enough to create intelligent decision without actually
being babysat the whole day is something which will leave
salivating over with.
Actually, the Forex Autopilot System would automatically do the
trading without any assistance thus you can expect your eyes not
to be glued on the monitor. People who already had traded their
money online would for sure realize the importance of this
system since it can really save their neck from the hassle. In
addition, it does not only give you the opportunity to trade
even if you are far away but most of the time, they prove to
create the right decision than your personal intuition.
Given that you don't want to contest the fact that you make the
best decision in trading at all times, then congratulation since
this extra feature would no longer apply to you but at least to
other who are desperately longing to get the best deal out of
their cash. Let us all face it. There are those who belong among
the average investors who consider themselves as no expert about
all the nuts and bolts of market trading. And without any doubt,
even if you are lucky in this field, you are definitely most of
the time kicking yourself to have a second guess to create the
right pick.
So what are some of the features of Forex Autopilot System that
can leave you on cloud 9?
1. They are being employed by both the professionals and
beginners and even those people with no experience on trading or
whatsoever. No matter if you possess not a single background
about it; you can surely make use of the system with ease.
2. On the real Forex account, you can commence to trade for as
low as $1000 USD or you can even learn about the demo account
without actually paying anything.
3. The Forex Autopilot System is an efficient and tested system
that can give you the chance of earning thousands of dollars in
just a day!
4. The system would work in any country.
5. Since it can work day and night, it is just like having the
real you on guard at all times. It is indeed consistent and very
reliable since you can just watch it work without actually doing
anything.
6. The Forex Autopilot System would run on MetaTrader platform
which anyone would know is one of the most wonderful trading
platforms there is in the Forex arena and which you can download
without any fee.
7. You can test the system without trading capital risks. Thus,
you can begin your test drive this day and see how it works.
About the Author: John Callingham is a professional Forex
trader who has been teaching people how to trade the forex
profitly for years. To learn more about John's award winning
course on profiting in trading Forex visit
http://www.ForexReviewInsider.com
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=284048&ca=Finances
Earning money just by sitting? Sound impossible but true. If
you are busy looking for ways on how to earn extra cash to save
yourself with the worsening economic condition of your place
then you must have heard about the Forex Autopilot System. What
makes this system sparkle among the rest is that it offers the
idea of 'trading while you sleep'. Having a system which is
competent enough to create intelligent decision without actually
being babysat the whole day is something which will leave
salivating over with.
Actually, the Forex Autopilot System would automatically do the
trading without any assistance thus you can expect your eyes not
to be glued on the monitor. People who already had traded their
money online would for sure realize the importance of this
system since it can really save their neck from the hassle. In
addition, it does not only give you the opportunity to trade
even if you are far away but most of the time, they prove to
create the right decision than your personal intuition.
Given that you don't want to contest the fact that you make the
best decision in trading at all times, then congratulation since
this extra feature would no longer apply to you but at least to
other who are desperately longing to get the best deal out of
their cash. Let us all face it. There are those who belong among
the average investors who consider themselves as no expert about
all the nuts and bolts of market trading. And without any doubt,
even if you are lucky in this field, you are definitely most of
the time kicking yourself to have a second guess to create the
right pick.
So what are some of the features of Forex Autopilot System that
can leave you on cloud 9?
1. They are being employed by both the professionals and
beginners and even those people with no experience on trading or
whatsoever. No matter if you possess not a single background
about it; you can surely make use of the system with ease.
2. On the real Forex account, you can commence to trade for as
low as $1000 USD or you can even learn about the demo account
without actually paying anything.
3. The Forex Autopilot System is an efficient and tested system
that can give you the chance of earning thousands of dollars in
just a day!
4. The system would work in any country.
5. Since it can work day and night, it is just like having the
real you on guard at all times. It is indeed consistent and very
reliable since you can just watch it work without actually doing
anything.
6. The Forex Autopilot System would run on MetaTrader platform
which anyone would know is one of the most wonderful trading
platforms there is in the Forex arena and which you can download
without any fee.
7. You can test the system without trading capital risks. Thus,
you can begin your test drive this day and see how it works.
About the Author: John Callingham is a professional Forex
trader who has been teaching people how to trade the forex
profitly for years. To learn more about John's award winning
course on profiting in trading Forex visit
http://www.ForexReviewInsider.com
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=284048&ca=Finances
Forex Signals - Will They Help You Or Hurt You?
By Richard M. Davieess
The Forex market confuses many inexperienced traders. Some
companies take advantage of their confusions by enticing them to
purchase Forex signals. Forex signals are touted as a way to
help the new traders get a better understanding of the market
and how the market works. Thinking these signals will give them
an advantage, many novice traders purchase them. Some traders
benefit from the signals and some don’t. Whether Forex signals
are worth the cost is a matter of dispute.
Each trader must decide for themselves if the benefits of the
signals are worth the cost. New traders in the Forex market
should research the value and usefulness of signals before
deciding if they should purchase them. They should learn more
about Forex signals, find out what precautions to take, and how
to proceed. They should also learn what other options they have
instead of paying for Forex signals.
Novice traders are cautioned against paying for Forex signals
by many experts. Signals may seem appealing to inexperienced
traders, but signals can have disappointing results. The trader
needs to trust the person selling the signals, and that can be a
difficult thing for an inexperienced trader. According to
experts, if the people selling Forex signals were great traders
then they would be making their living from the Forex market
instead of from selling Forex signals. Traders considering
buying the signals should consider this distinction carefully.
There are few things you should consider before buying Forex
signals. Traders should select signals from sellers who give a
free trial. Legitimate businesses are willing to allow you to
test their information before buying it. Traders should get
audited results from the signal provider. Company who are
unwilling to give audited results should not be considered. In
order to ensure that the trader is receiving information that
will benefit them, they should only work with companies who are
willing to provide previous, audited results to the trader.
Companies who validate their information are easier for the
trader to trust than companies who refuse to give traders a
trial of their services and audited results.
Inexperienced traders who want some help getting started should
apply for a trial account from a Forex broker. Trial accounts
allow traders to practice trading without using real money, and
thereby learn about the Forex market. Traders can use trial
accounts to learn the fundamentals of the Forex and gain
experience with trading and research. Many brokers offer trial
accounts with the expectation that traders will gain information
and comfort with the Forex, and will develop a business
relationship with the broker.
Traders who decide to open a traditional Forex account should
start trading with a small deposit until they gain experience.
Traders who start trading with a small account will be less
afraid to trade because they have less to lose. Once traders
move from a trial account to a traditional account they should
keep in mind that the different ramifications from their trades
may cause a psychological impact from using real money. Traders
should be aware of this when they begin traditional trading and
should act accordingly.
About the Author: Effective Forex Trading is your guide to
profiting in the Forex market using leading edge Forex trading
systems, technical analysis, swing trading strategies and much
more! Trade Forex with confidence with our free Forex Signals
nnewsletter. Get your free copy at
http://www.effectiveforextrading.com
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=282104&ca=Finances
The Forex market confuses many inexperienced traders. Some
companies take advantage of their confusions by enticing them to
purchase Forex signals. Forex signals are touted as a way to
help the new traders get a better understanding of the market
and how the market works. Thinking these signals will give them
an advantage, many novice traders purchase them. Some traders
benefit from the signals and some don’t. Whether Forex signals
are worth the cost is a matter of dispute.
Each trader must decide for themselves if the benefits of the
signals are worth the cost. New traders in the Forex market
should research the value and usefulness of signals before
deciding if they should purchase them. They should learn more
about Forex signals, find out what precautions to take, and how
to proceed. They should also learn what other options they have
instead of paying for Forex signals.
Novice traders are cautioned against paying for Forex signals
by many experts. Signals may seem appealing to inexperienced
traders, but signals can have disappointing results. The trader
needs to trust the person selling the signals, and that can be a
difficult thing for an inexperienced trader. According to
experts, if the people selling Forex signals were great traders
then they would be making their living from the Forex market
instead of from selling Forex signals. Traders considering
buying the signals should consider this distinction carefully.
There are few things you should consider before buying Forex
signals. Traders should select signals from sellers who give a
free trial. Legitimate businesses are willing to allow you to
test their information before buying it. Traders should get
audited results from the signal provider. Company who are
unwilling to give audited results should not be considered. In
order to ensure that the trader is receiving information that
will benefit them, they should only work with companies who are
willing to provide previous, audited results to the trader.
Companies who validate their information are easier for the
trader to trust than companies who refuse to give traders a
trial of their services and audited results.
Inexperienced traders who want some help getting started should
apply for a trial account from a Forex broker. Trial accounts
allow traders to practice trading without using real money, and
thereby learn about the Forex market. Traders can use trial
accounts to learn the fundamentals of the Forex and gain
experience with trading and research. Many brokers offer trial
accounts with the expectation that traders will gain information
and comfort with the Forex, and will develop a business
relationship with the broker.
Traders who decide to open a traditional Forex account should
start trading with a small deposit until they gain experience.
Traders who start trading with a small account will be less
afraid to trade because they have less to lose. Once traders
move from a trial account to a traditional account they should
keep in mind that the different ramifications from their trades
may cause a psychological impact from using real money. Traders
should be aware of this when they begin traditional trading and
should act accordingly.
About the Author: Effective Forex Trading is your guide to
profiting in the Forex market using leading edge Forex trading
systems, technical analysis, swing trading strategies and much
more! Trade Forex with confidence with our free Forex Signals
nnewsletter. Get your free copy at
http://www.effectiveforextrading.com
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=282104&ca=Finances
Trading Risk Management - Rule of Three
By Lance Beggs
Would you like to discover a quick and simple risk management
strategy that is easy to apply to any trading plan, and has the
potential to vastly improve results? Excellent!
I’m not talking about the placement of stop losses, which is
what most people consider as ‘risk management’. Rather, this is
a simple tool for managing the risk in your trading business.
Effective trading requires focus and discipline. There are many
external factors that can interrupt your focus, and destroy your
discipline, such as:
- An unreliable internet connection
- Your charting platform losing its signal
- A knock at the door
- The telephone ringing
- A baby crying
- Hunger
- Noticeably too hot or cold
- Fatigue (hopefully from late night trading study, rather than
alcohol and party induced fatigue)
And as if that’s not enough, there are many internal factors
that can also interrupt your focus, and destroy your discipline,
leading you to make decisions and actions based on emotion,
rather than following your documented trading plan. You’ve no
doubt experienced some of these already. The internal factors
would include things such as:
- Hesitation in entering once price triggers an entry
- Hesitation in exiting when price hits your stop loss
- Doubt about your entry after entering the trade
- Fear of exiting at your stop loss
- Worry about how you will explain another loss to your partner
- Any thought about an early exit of this trade, just to make
up for earlier losses
There’s a whole lot more, but hopefully you get the point.
One flaw in many trading plans is the absence of a valid
strategy for managing these risks. So, let’s fix that situation.
The problem is, traders have no guidelines as to:
- When the risk justifies us stopping our trading,
- When to just pause trading and manage the issue, or
- When to ignore it and continue trading.
The way I do this is using a very simple risk management
strategy developed by Shell, a global group of energy and
petrochemical companies. Obviously they didn’t create it for use
in trading – I just find that it works really well in this
environment. (Yes, I know what you’re thinking - I am a risk
management nerd!)
What we need to do is firstly classify your current trading as
being in a GREEN, AMBER or RED condition. Think of a set of
traffic lights. GREEN indicates that everything is fine. This is
the desired trading environment. RED is a compulsory STOP
condition. And AMBER is a warning that you need to be prepared
to stop.
What I’d like you to consider is documenting any RED conditions
within your trading plan. This might include things like:
- An unreliable internet connection
- Your charting platform losing it’s signal (when you have no
alternative)
- Fatigue due to less than six hours sleep the night before, or
more than four consecutive nights with less than eight hours
sleep (customise this for your own requirements)
These are mandatory STOP trading criteria. Alongside each of
these risks you need to define the actions you will take. For
example, how will you manage your charting platform going down?
If you’re a long term trader this might not cause too much
stress and may actually be an AMBER rather than RED – your stops
may be in the market and you probably have alternative charting
options. However if you’re a day-trader operating on small
timeframes, this is clearly a RED criteria. You may choose to
manage this by contacting your broker by phone and closing out
all positions.
So, for each risk we define as a RED, we simply document a
procedure to manage that situation. And when one of these
conditions emerges while trading, we carry out our procedure,
and then stop trading until the condition has gone.
Now, everything else that is not as serious as a RED, but can
still influence our trading, is an AMBER. The problem here is,
as mentioned before, when does it justify stopping, or when
should we just continue with our trading?
The Rule of Three risk management strategy simply states that
if you get three or more AMBER conditions then that is also an
automatic stop. At that point you can either quit for the day
and head for the golf course, or manage your AMBERs back to
GREEN and resume trading.
So, if your baby is teething, and just won’t stop crying
despite your partners attempts to comfort her, and you just
suffered your second loss in a row, and you now find yourself
hesitating at an entry trigger – that’s three AMBERs.
STOP TRADING!
Before you continue, make sure you manage your risk back into
GREEN, or at least less than three AMBERs. Perhaps take a short
break to review your two losses and confirm that the setups were
valid, review your trading statistics to confirm that two losses
in a row is a normal occurrence, and conduct a short relaxation
and visualization session. If you’re braver than I am you might
also ask your partner to take the baby out for a drive (ask
nicely though!)
If you’re satisfied that you’ve now managed the situation back
to less than three AMBERs, or ideally completely back to GREEN,
then you’re right to start trading again. Otherwise, take the
day off. Sometimes a ‘three AMBER’ complete break from trading
is a wise move.
While we all hope that our trading will occur within a
completely GREEN environment, life’s just not like that. The
Rule of Three risk management strategy gives you a simple
guideline for when enough is enough – and you need to either
stop completely, or reduce some of the external or internal
risks. Try it, and see if it helps in your trading as much as it
does in mine.
It’s simple:
- GREEN is GO,
- AMBER is CAUTION and
- RED is STOP, but
- 3 AMBERs are equivalent to a RED. Stop trading, or manage
those AMBERs back to GREEN.
Happy (hopefully GREEN) trading,
Lance Beggs
© Copyright 2008. Lance Beggs. All Rights Reserved.
About the Author: Would you like to learn more about how I
trade the forex and equity index markets? Check out the
articles, videos and trading resources on my website right now
at http://www.YourTradingCoach.com .
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=297164&ca=Finances
Would you like to discover a quick and simple risk management
strategy that is easy to apply to any trading plan, and has the
potential to vastly improve results? Excellent!
I’m not talking about the placement of stop losses, which is
what most people consider as ‘risk management’. Rather, this is
a simple tool for managing the risk in your trading business.
Effective trading requires focus and discipline. There are many
external factors that can interrupt your focus, and destroy your
discipline, such as:
- An unreliable internet connection
- Your charting platform losing its signal
- A knock at the door
- The telephone ringing
- A baby crying
- Hunger
- Noticeably too hot or cold
- Fatigue (hopefully from late night trading study, rather than
alcohol and party induced fatigue)
And as if that’s not enough, there are many internal factors
that can also interrupt your focus, and destroy your discipline,
leading you to make decisions and actions based on emotion,
rather than following your documented trading plan. You’ve no
doubt experienced some of these already. The internal factors
would include things such as:
- Hesitation in entering once price triggers an entry
- Hesitation in exiting when price hits your stop loss
- Doubt about your entry after entering the trade
- Fear of exiting at your stop loss
- Worry about how you will explain another loss to your partner
- Any thought about an early exit of this trade, just to make
up for earlier losses
There’s a whole lot more, but hopefully you get the point.
One flaw in many trading plans is the absence of a valid
strategy for managing these risks. So, let’s fix that situation.
The problem is, traders have no guidelines as to:
- When the risk justifies us stopping our trading,
- When to just pause trading and manage the issue, or
- When to ignore it and continue trading.
The way I do this is using a very simple risk management
strategy developed by Shell, a global group of energy and
petrochemical companies. Obviously they didn’t create it for use
in trading – I just find that it works really well in this
environment. (Yes, I know what you’re thinking - I am a risk
management nerd!)
What we need to do is firstly classify your current trading as
being in a GREEN, AMBER or RED condition. Think of a set of
traffic lights. GREEN indicates that everything is fine. This is
the desired trading environment. RED is a compulsory STOP
condition. And AMBER is a warning that you need to be prepared
to stop.
What I’d like you to consider is documenting any RED conditions
within your trading plan. This might include things like:
- An unreliable internet connection
- Your charting platform losing it’s signal (when you have no
alternative)
- Fatigue due to less than six hours sleep the night before, or
more than four consecutive nights with less than eight hours
sleep (customise this for your own requirements)
These are mandatory STOP trading criteria. Alongside each of
these risks you need to define the actions you will take. For
example, how will you manage your charting platform going down?
If you’re a long term trader this might not cause too much
stress and may actually be an AMBER rather than RED – your stops
may be in the market and you probably have alternative charting
options. However if you’re a day-trader operating on small
timeframes, this is clearly a RED criteria. You may choose to
manage this by contacting your broker by phone and closing out
all positions.
So, for each risk we define as a RED, we simply document a
procedure to manage that situation. And when one of these
conditions emerges while trading, we carry out our procedure,
and then stop trading until the condition has gone.
Now, everything else that is not as serious as a RED, but can
still influence our trading, is an AMBER. The problem here is,
as mentioned before, when does it justify stopping, or when
should we just continue with our trading?
The Rule of Three risk management strategy simply states that
if you get three or more AMBER conditions then that is also an
automatic stop. At that point you can either quit for the day
and head for the golf course, or manage your AMBERs back to
GREEN and resume trading.
So, if your baby is teething, and just won’t stop crying
despite your partners attempts to comfort her, and you just
suffered your second loss in a row, and you now find yourself
hesitating at an entry trigger – that’s three AMBERs.
STOP TRADING!
Before you continue, make sure you manage your risk back into
GREEN, or at least less than three AMBERs. Perhaps take a short
break to review your two losses and confirm that the setups were
valid, review your trading statistics to confirm that two losses
in a row is a normal occurrence, and conduct a short relaxation
and visualization session. If you’re braver than I am you might
also ask your partner to take the baby out for a drive (ask
nicely though!)
If you’re satisfied that you’ve now managed the situation back
to less than three AMBERs, or ideally completely back to GREEN,
then you’re right to start trading again. Otherwise, take the
day off. Sometimes a ‘three AMBER’ complete break from trading
is a wise move.
While we all hope that our trading will occur within a
completely GREEN environment, life’s just not like that. The
Rule of Three risk management strategy gives you a simple
guideline for when enough is enough – and you need to either
stop completely, or reduce some of the external or internal
risks. Try it, and see if it helps in your trading as much as it
does in mine.
It’s simple:
- GREEN is GO,
- AMBER is CAUTION and
- RED is STOP, but
- 3 AMBERs are equivalent to a RED. Stop trading, or manage
those AMBERs back to GREEN.
Happy (hopefully GREEN) trading,
Lance Beggs
© Copyright 2008. Lance Beggs. All Rights Reserved.
About the Author: Would you like to learn more about how I
trade the forex and equity index markets? Check out the
articles, videos and trading resources on my website right now
at http://www.YourTradingCoach.com .
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=297164&ca=Finances
The Keys to Successful Forex Trading
By Julie Landry
The forex market is a nonstop cash market where currencies of
different countries are constantly traded, typically via
brokers, which are known as forex brokers. Foreign currencies
are constantly and simultaneously bought and sold across local
and global markets while traders increase or decrease the value
of an investment upon currency movements. The forex market is
the most volatile market in the world, often creating huge price
swings. You should learn how to ride these trades for maximum
profit before diving into it. It is definitely not a game for a
newbie and you need to brush up on your skills before getting
your hands wet.
The forex market is mostly a network of computers and large
banking institutions that provide a marketplace for the forex
market. It is the largest financial market in the world, with
trading volume that is several times larger than all of the
global equity markets combined. The high liquidity of the FX
market greatly increases its price stability, and market
participants can always trade on a tight spread. The forex
market is difficult to understand for just an average
individual. However, once the market is broken down into simple
terms, the average individual can begin to understand the
foreign exchange market and use it as a financial instrument for
profitable investing and the mitigation of risk.
Currency trading can be performed by a trader online. By
trading directly with your broker, a dealer and a primary market
maker, there are no extra parties between you, the trader, and
the buyer or seller of the currency pair. Currency trading is an
education in and of itself and requires you to follow your
trades very closely in order to understand what is happening and
why it is happening. The exchange rates on currencies fluctuate
on a daily basis, so it's important to keep abreast of them.
Currency trading software is a widely used trading mechanism
that allows you to make more money in the currency trading
market. Currency values are largely determined by government
monetary and fiscal policies, and these do not change from one
day to the next. This means the underlying fundamentals remain
intact for long periods of time. Currencies are an unstable
market where things can change at a moment's notice, so having
your thumb on the pulse of the market is the key to success.
Forex trading is all about the exchange of international
currencies. One currency is sold to purchase another. Many
people believe it is the most lucrative home based business
venture at the moment. It is a business where you can earn an
income without selling anything, without pitching a sale to
people and without running around after clients. Forex trading
is attractive because it offers unparalleled freedoms. A forex
trader can live anywhere as long as he or she is within reach of
the internet.
Trading foreign currencies is not bound to any one trading
floor, since it continuously takes place electronically between
a network of banks over a 24 hour period. Forex trading is easy,
but making money with it is not. You need a plan! Forex trading
is confusing if you do not understand what the numbers are and
why they are significant for you. You have to know what the
market is saying and understand the importance of all the
possible signals.
About the Author: Julie Landry makes a living with forex
trading. For more educational resources about learning how to
trade the forex markets, visit http://www.forexverse.com
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=303215&ca=Finances
The forex market is a nonstop cash market where currencies of
different countries are constantly traded, typically via
brokers, which are known as forex brokers. Foreign currencies
are constantly and simultaneously bought and sold across local
and global markets while traders increase or decrease the value
of an investment upon currency movements. The forex market is
the most volatile market in the world, often creating huge price
swings. You should learn how to ride these trades for maximum
profit before diving into it. It is definitely not a game for a
newbie and you need to brush up on your skills before getting
your hands wet.
The forex market is mostly a network of computers and large
banking institutions that provide a marketplace for the forex
market. It is the largest financial market in the world, with
trading volume that is several times larger than all of the
global equity markets combined. The high liquidity of the FX
market greatly increases its price stability, and market
participants can always trade on a tight spread. The forex
market is difficult to understand for just an average
individual. However, once the market is broken down into simple
terms, the average individual can begin to understand the
foreign exchange market and use it as a financial instrument for
profitable investing and the mitigation of risk.
Currency trading can be performed by a trader online. By
trading directly with your broker, a dealer and a primary market
maker, there are no extra parties between you, the trader, and
the buyer or seller of the currency pair. Currency trading is an
education in and of itself and requires you to follow your
trades very closely in order to understand what is happening and
why it is happening. The exchange rates on currencies fluctuate
on a daily basis, so it's important to keep abreast of them.
Currency trading software is a widely used trading mechanism
that allows you to make more money in the currency trading
market. Currency values are largely determined by government
monetary and fiscal policies, and these do not change from one
day to the next. This means the underlying fundamentals remain
intact for long periods of time. Currencies are an unstable
market where things can change at a moment's notice, so having
your thumb on the pulse of the market is the key to success.
Forex trading is all about the exchange of international
currencies. One currency is sold to purchase another. Many
people believe it is the most lucrative home based business
venture at the moment. It is a business where you can earn an
income without selling anything, without pitching a sale to
people and without running around after clients. Forex trading
is attractive because it offers unparalleled freedoms. A forex
trader can live anywhere as long as he or she is within reach of
the internet.
Trading foreign currencies is not bound to any one trading
floor, since it continuously takes place electronically between
a network of banks over a 24 hour period. Forex trading is easy,
but making money with it is not. You need a plan! Forex trading
is confusing if you do not understand what the numbers are and
why they are significant for you. You have to know what the
market is saying and understand the importance of all the
possible signals.
About the Author: Julie Landry makes a living with forex
trading. For more educational resources about learning how to
trade the forex markets, visit http://www.forexverse.com
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=303215&ca=Finances
Learn Forex Trading
Copyright � 2008 Andrew Daigle
Capitalizing upon the buying and selling of different currencies,
the Forex market is the largest in the world, where trillions of
dollars exchange hands on a daily basis. To profit from this
powerful market, it is important to build your foundation with an
understanding of Forex basics.
Forex Trading Quotes
Before you can develop currency trading strategies, you need to
be able to read Forex quotes. Foreign exchange quotes are always
listed in pairs (i.e. USD/JPY 103.2): the first listed currency
is known as the base currency and has a constant value of 1 unit,
while the second currency is known as the counter. In this
example, USD/JPY 103.2 signifies that one US dollar will obtain
103.2 Japanese yen. When quotes are rising, it means the dollar
is increasing in value, and when they are falling, the dollar is
decreasing in value.
In Forex trading, two-sided quotes are offering encountered (i.e.
EUR/USD 1.4355/1.4360) and represent the bid and the ask price
for the currency involved. The bid is the price at which you can
sell the base currency, and the ask is the price that you can
buy. The difference is commonly referred to as the spread. In the
example above, you can buy one euro at 1.4355 US dollars or sell
one at 1.4360. The difference is how brokers manage to offer
commission-free services, as they always pocket this difference.
Trading Major Currencies
No novice should try to develop any Forex trading techniques
outside of the seven major currencies: the US dollar (USD), Euro
(EUR), Japanese yen (JPY) British pound (GBP), Swiss Franc (CHF)
Canadian dollar (CAD) and Australian dollar (AUD). Don?t attempt
Forex trading with a minor currency, as it could produce
liquidity problems for you, and you may have difficulties
selling. It is always best to trade currencies that you are
familiar with and have high volume, as this further assists in
your understanding of the strengths and weaknesses.
Forex Trading Players
Until 1998, currency trading was essentially limited to banks,
major currency dealers, and major multinational corporations. The
late 90s, the market was broken up into smaller units and became
available to the retail investor. You should be aware,
nonetheless, that if you decide to develop a currency trading
strategy, you will be pitting yourself against the largest
financial institutions in the world.
Why should I do FOREX Trading?
This market is hands down, the largest market in the world. It is
one of the few markets that trades 24 hours a day. This allows
you the opportunity to implement your currency trading strategies
at any time and from any place. The leverage in this market is
unparalleled by any other, offering huge profit potentials with
minimum capital requirements. However, it is not advisable to
partake in Forex trading without first learning currency trading
strategies, for there are no rewards without risks.
============================================================
Andrew Daigle is the creator and author of many successful
websites including ForexBoost at http://www.forexboost.com
a free forex training resource and business partners at Forex
Confidental at http://www.forex-confidential.com for trading
signals and live professional training. ============================================================
Read More Articles From Andrew Daigle:
http://thePhantomWriters.com/free_content/d/index.shtml#Andrew_Daigle
Capitalizing upon the buying and selling of different currencies,
the Forex market is the largest in the world, where trillions of
dollars exchange hands on a daily basis. To profit from this
powerful market, it is important to build your foundation with an
understanding of Forex basics.
Forex Trading Quotes
Before you can develop currency trading strategies, you need to
be able to read Forex quotes. Foreign exchange quotes are always
listed in pairs (i.e. USD/JPY 103.2): the first listed currency
is known as the base currency and has a constant value of 1 unit,
while the second currency is known as the counter. In this
example, USD/JPY 103.2 signifies that one US dollar will obtain
103.2 Japanese yen. When quotes are rising, it means the dollar
is increasing in value, and when they are falling, the dollar is
decreasing in value.
In Forex trading, two-sided quotes are offering encountered (i.e.
EUR/USD 1.4355/1.4360) and represent the bid and the ask price
for the currency involved. The bid is the price at which you can
sell the base currency, and the ask is the price that you can
buy. The difference is commonly referred to as the spread. In the
example above, you can buy one euro at 1.4355 US dollars or sell
one at 1.4360. The difference is how brokers manage to offer
commission-free services, as they always pocket this difference.
Trading Major Currencies
No novice should try to develop any Forex trading techniques
outside of the seven major currencies: the US dollar (USD), Euro
(EUR), Japanese yen (JPY) British pound (GBP), Swiss Franc (CHF)
Canadian dollar (CAD) and Australian dollar (AUD). Don?t attempt
Forex trading with a minor currency, as it could produce
liquidity problems for you, and you may have difficulties
selling. It is always best to trade currencies that you are
familiar with and have high volume, as this further assists in
your understanding of the strengths and weaknesses.
Forex Trading Players
Until 1998, currency trading was essentially limited to banks,
major currency dealers, and major multinational corporations. The
late 90s, the market was broken up into smaller units and became
available to the retail investor. You should be aware,
nonetheless, that if you decide to develop a currency trading
strategy, you will be pitting yourself against the largest
financial institutions in the world.
Why should I do FOREX Trading?
This market is hands down, the largest market in the world. It is
one of the few markets that trades 24 hours a day. This allows
you the opportunity to implement your currency trading strategies
at any time and from any place. The leverage in this market is
unparalleled by any other, offering huge profit potentials with
minimum capital requirements. However, it is not advisable to
partake in Forex trading without first learning currency trading
strategies, for there are no rewards without risks.
============================================================
Andrew Daigle is the creator and author of many successful
websites including ForexBoost at http://www.forexboost.com
a free forex training resource and business partners at Forex
Confidental at http://www.forex-confidential.com for trading
signals and live professional training. ============================================================
Read More Articles From Andrew Daigle:
http://thePhantomWriters.com/free_content/d/index.shtml#Andrew_Daigle
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