FREE FOREX COURSES

15 LESSON OF FOREX

2007-11-28T03:04:00.000-08:00

LESSON #1:
What Is FOREX and How to Take Part in the World's Largest, Most Liquid Trading Market

"If you think what you do is great, you ain't seen nothing yet. I'm an FX Trader".

Those were the words I heard over three years ago, and since then, regardless of how confrontational, competitive, or in- your-face they may have seemed at the time, I'm glad I heard them. I was just introduced to what we will affectionately call, throughout this mini-course (seriously), "The World's Most Powerful Home-based Business"

Even though you, and I, have had the opportunity to take part in trading foreign currencies for profit (in the same way banks and large corporations do) since 1998, it is just now becoming the cool, hip, new "thing" to talk about at parties, business events, and other social gatherings. Even though it HAS been somewhat of a loosely guarded secret, more and more investors are turning to the all-electronic world of FOREX trading for income and profit because of its numerous benefits & advantages over traditional trading vehicles, like stocks, bonds and commodities.

But, still, whenever something SEEMS new or is just becoming a part of social conversation, news articles, and water cooler gossip, misconceptions have to be overcome, the mind has to be open and the slate has to be clear for starting out fresh with the CORRECT information. So, in this first Lesson, it is our attempt to give you some solid, but not over-detailed, information on just what the heck "FX" (FOREX) means, what it is, and why it exists. Plus, we wouldn't want you to be the one giving the blank stare, at the parties, when someone brings it up :-)

If you'd like to make $200 to $3,000 for as little as ten minutes of work -- work that involves minimal risk, but plenty of upside potential -- then this ongoing email mini- course if for you. As a friend of mine said, “Trading FOREX is like picking money up off the floor. NOT trading FOREX is like leaving it there for someone else to pick up." Others in the industry have also said, “It’s like having an ATM machine on your own computer.”

In this 20-part e-Course series, we will show you what they mean.

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Here's the all-steak, no-sizzle explanation (one we feel you'll appreciate) of what FOREX is and how traders, like us, profit from it:

The Foreign Exchange Market, also referred to the "FOREX" or "FX" market, is the spot (cash) market for currency.

But, don't mistake what we're doing as trading the futures market, where you buy a contract to purchase a particular currency at a future price in time. What we do is much less risky than trading currencies on the futures market, much more profitable, and a lot easier, than trading stocks.

So, you're probably wondering where it's at ... or ... how to access the FX market? The answer is: FX Trading is not bound to any one trading floor and is not centralized on an exchange, as with the stock and futures markets. The FX market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.

Yes, if that's the first time you've heard about an all- electronic market, we know this may sound somewhat intriguing to you. And, it should be, because it certainly is.

Here's what you are actually trading when you participate in the Foreign Exchange (FOREX) market: Essentially, like the large banks who use the FX market to protect themselves from the fluctuating exchange rate of different currencies, as an investor, what we're doing is simultaneously exchanging one countries currency for another. So, in actuality, we're electronically trading a currency-pair and the price that is quoted to us is the exchange rate between the two currencies.

If you just said, "Huh?" ...no worries, we've got ya covered with an explanation. In other words, simply the quoted price is how many of the one currency is worth 1 of the other currency.

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Example:

EUR/USD last trade 1.2850 - One Euro is worth $1.2850 US dollars.

The first currency (in this example, the EURO) is referred to as the base currency and the second (/USD) as the counter or quote currency.

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Okay, okay ... let me STOP myself before I get too deep into Currency Pair education (we'll cover that with you in Lesson #3)

Yes, this is a lot to share with you about this relatively new, exciting market of unlimited profit possibilities -- a market that has so many more advantages over other investments, and even over other businesses, that it will blow your socks off. And, being the curious, ambitious guy that you are, I know you'd like to dive in. So, stay tuned for tomorrow's email where we'll tell you why FOREX Trading is the ideal business and what its benefits are over other investing vehicles.

But ..... WAIT !!! I'll at least give you something to chew on overnight.

We get a lot of questions about FOREX - from folks who've never heard of it to advanced, highly-skilled traders.

The one question that keeps popping-up from the former group of people is this: "If people, like you, are making so much money by trading the FOREX, why would you share this information with anyone?" Here's the answer...

The FOREX has a DAILY trading volume of around $1.5 trillion dollars - 30 times larger than the combined volume of all U.S. equity markets. This means that 1,498,574 skilled traders could each take 1 million dollars out of the FOREX market every day and the FOREX would still have more money left than the New York Stock exchange every day!

Wow !

Yes, wow indeed. The FOREX plays a vital role in the world economy and there will always be a tremendous need for the FOREX. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Japan can sell products in the United States and be able to receive Japanese Yen in exchange for US Dollar.

So, before tomorrow arrives, just keep this in mind: There's plenty of money for plenty of traders to use the same trading techniques / tactics and profit immensely. And, with only 5% of the daily turnover of volume coming from banks, government and large corporations who need to hedge, imagine what the other 95% is for -- bingo, for speculation and profit.

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SIDENOTE: a lot of courses will spend several pages introducing the FOREX by giving a historical perspective. In our opinion, for a trader, this is a waste of time. Yes, it could be interesting to learn about the details on Who, What, When, Where and Why but, just know that historical knowledge will not help you to become a FOREX Trader.

15 LESSON OF FOREX

2007-11-28T03:03:00.000-08:00

LESSON #2:
Why FOREX trading is quickly becoming one of the investing world's hottest, most rewarding opportunities. And, why it's our chosen 'Ideal Business.'

As ambitious, hungry, time freedom-driven entrepreneurs ourselves, before we were introduced to the concept of Trading-For-a-Living, we had the pleasure of reviewing and seeing IN ACTION hundreds of home business plans, profit-making ideas, and ways to earn a decent income outside of a J-O-B.

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SIDENOTE: while we realize the majority of you reading this know J-O-B stands for "Just Over Broke" and that you'll never become wealthy working one forever; and while we understand you're already determined to live your dreams and reach a level of REAL financial independence and Freedom, we still want you to know that it's NOT just all about money -- it's about quality of life. It's about time freedom and self-reliance. It's about families. It's about being able to life a live where you can achieve your recurring daydreams.

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We feel FOREX Trading allows you to live the life you've always wanted more so than any other income vehicle. It, in our opinion, is indeed "The World's Most Powerful Home-based Business". But, more than just analyzing them, we've been a part of quite a few (i.e., Direct Sales, delivery business, Real Estate, marketing consulting, risky investments, etc.). And from meeting with, interviewing, hearing about others in business, studying industries with intensity and/or reading about all the different "gurus of the moment", we have come to find a few SIMPLE truths:

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Business Truth #1:

Quite often people who have money don't have the time to enjoy it, and those that have the time don't have the money!

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Well, here's some compelling news for you ... You don't have to sacrifice a LIFE to earn an incredibly above-average income! This isn't a pipe dream. It's purely realistic and completely optimistic to say that, yes, if you FOCUS on FOREX trading for several months, you CAN bring your life into balance.

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Business Truth #2:

Before money is earned...something, somewhere, somehow has to be SOLD. And, if it's not a repeat type (consumable) product or service, as soon as you stop whipping up the sales force your income comes to a screeching halt!

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Listen: "money" is a medium of exchange, nothing more and nothing less. There's no magic way to acquire it. The way to build wealth is to exchange a value-oriented product or service for it. But what if, rather than hiring sales reps (or being one yourself), a full-time accountant, an attorney, administrative staff, customer service / human resource personnel (in other words, "employees"), you could work by yourself and have access to multiple thousands of "customers" (no need to advertise for them either) who are ready and able to BUY from you (or SELL to you) at the drop of a hat? And, wouldn't it be incredibly cool if your business could just laugh-off such traditional hindrances as competition, collection problems, changing fads, bad publicity, political or social events, etc?

Yes, all that and, oops, we almost forgot -- it gets even better... Trade from anywhere. If you like to travel, this is a dream business. Take your laptop with you and you can trade the FOREX and make money anywhere in the world where you have an internet connection. You have total freedom of location. Can you now see why we call this "The World's Most Powerful Home_based Business?"

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Business Truth #3:

A classic dilemma: for most, you can't get a job (or start a business) without experience (expertise) and you can't get experience (expertise) without a job (or being involved in business)

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When attempting to make more profit than losses on the fluctuation of exchange rates between major currencies (i.e., Trading the FOREX), nobody is going to ask you for a diploma, a formal license or verify the amount of hours you've spent studying the Foreign exchange market and banking industry. Nope, it just ain’t gonna happen! All the training you'll need to get going smoothly is included IN and WITH our Rapid Forex Training Courses (and, of course, the rest of this email mini-course series will give you more solid info than even some books do).

Now that we've talked some about how FOREX Trading Obliterates, like a nuclear explosion, the 3 main disadvantageous business TRUTHS above .....

Let's discuss the many benefits and advantages of FOREX Trading over Stocks & Commodities
Here are the highlights on why FOREX is becoming the go-to market for private and institutional traders alike: The Main Benefits of Trading the FX Spot Market: (we'll get into some of the details after this)

· Never a 'Bear' Market!

· No Separate commissions!

· Low to Zero Transaction Costs / Narrow Dealer Spreads!

· A 24-hour Market with Superior Market Liquidity!

· It has up to 200:1 Leverage for Margin Trading!

· Streaming Executable Prices!

· Price Movements Are Highly Predictable!

· FOREX Trading is Economical and Start-up Costs are Low!

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Before we get into the details on the benefits listed above, student, trader, and all- around well-educated investor, it is important to know the differences between cash FOREX (SPOT FX) and currency futures.

In currency futures, the contract size is predetermined. With FOREX (SPOT FX), you may trade any desired amount, typically up to $100,000 USD. The futures market closes at the end of the business day (similar to the stock market). If important data is released overseas while the U.S. futures markets is closed, the next day's opening might sustain large gaps with potential for large losses if the direction of the move is against your position.

The Spot FOREX market runs continuously on a 24-hour basis from 7:00 am New Zealand time Monday morning to 5:00 pm New York Time Friday evening. Dealers in every major FX trading center (Sydney, Tokyo, Hong Kong/Singapore, London, Geneva and New York/Toronto) ensure a smooth transition as liquidity migrates from one time zone to the next.

Furthermore, currency futures trade in non-USD denominated currency amounts only whereas in spot FOREX, an investor can trade either in currency denominations, or in the more conventionally quoted USD amounts. The currency futures pit, even during Regular IMM (International Money Market) hours suffers from sporadic lulls in liquidity and constant price gaps. The spot FOREX market offers constant liquidity and market depth much more consistently than Futures. With IMM futures one is limited in the currency pairs he can trade - Most currency futures are traded only versus the USD - With spot FOREX, you may trade foreign currencies vs. USD or vs. each other on a 'cross' basis as well - ex: EUR/JPY, GBP/JPY, CHF/JPY, EUR/GBP and AUD/NZD (more on what these mean in Lesson #3 tomorrow)

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More and more savvy investor and entrepreneurs are shunning traditional financial markets, like stocks, bonds & commodities and building their fortunes in the foreign exchange (FOREX) marketplace.

Here are 7 important reasons why:

1): FOREX is the largest financial market in the world.

With a daily trading volume of over $1.5 trillion, the spot FOREX market can absorb trading sizes that dwarf the capacity of any other market. In fact, when compared with the $50 billion daily market for equities or the $30 billion futures market, it becomes quickly apparent this gives you, and millions of other FOREX traders, almost infinite trading liquidity and flexibility.

2): FOREX is a TRUE 24-hour market.

The FOREX Market never sleeps. Trading positions can be entered and exited at any moment - around the globe, around the clock, six days a week. There is no waiting for an opening bell as in the case of trading stocks. It is a 24- hour, continuous electronic (ONLINE) currency exchange that never closes. This is very desirable for you if you want to trade on a part-time basis, because you can choose when you want to trade: morning, noon or night.

3): There is never a Bear Market in FOREX.

You can have access to a seamless, mutually-inclusive (two- way) exchange of currencies. Meaning, because currencies trade in "pairs" (for example, US dollar vs. yen or US dollar vs. Swiss franc), one side of every currency pair (for example, USD/JPY - JPY = YEN) is constantly moving in relation to the other. Thus, when you buy a particular currency, you are actually simultaneously selling the other currency in that particular pair. As the market moves, one of the currencies will increase in value versus the other. Of course, it is up to you to choose the correct currency to be long or short. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. This means you have equal potential to profit in both a rising or falling market.

4): High Leverage - up to 200:1 Leverage.

You are permitted to trade foreign currencies on a highly leveraged basis - up to 200 times your investment with some brokers. This is primarily attributed to the higher levels of liquidity within the currency markets. Standard 100,000- unit currency lots can be traded with as little as 1% margin, or $1,000. Mini FX accounts are permitted to trade with just 0.5% margin -- in other words, just $50 allows you to control a 10,000-unit currency position. Futures traders, who are accustomed to margin requirements generally equal to 5%-8% of the contract value, will immediately recognize that the FOREX market provides much greater leverage, and for stock traders, who must post at least 50% margin, there’s no comparison. If you’re looking for an efficient use of trading capital, this is it!

5): Price Movements Are Highly Predictable.

Although currency prices in the FX market may be volatile, they generally repeat themselves in relatively predictable cycles, creating trends. The strong trends that foreign currencies develop are a significant advantage for traders who use the "technical" methods and strategies we teach at RapidForex.com.

Unlike stocks, currencies rarely spend much time in tight trading ranges and have the tendency to develop strong trends. Over 80% of volume is speculative in nature and, as a result, the market frequently overshoots and then corrects itself. As a technically-trained trader, you can easily identify new trends and breakouts, which provide for multiple opportunities to enter and exit positions.

6:) Commission-free Trading and Low Transaction Cost

When you trade FOREX, through one of our recommended brokers (this info is in our private resources section), you'll do it totally commission-free! These brokers don't charge commissions to trade or to maintain an account, and that goes for all clients trading the FOREX through them, regardless of your account balance or trading volume. Even Mini FX traders can buy and sell currencies online, commission-free.

This is worth repeating: No FX commissions!

What about trading fees? There are none of the usual fees to which futures and equity traders are accustomed -- no exchange or clearing fees, no N_F_A or S_E_C fees. Because currencies trade over-the-counter (OTC), via a global electronic network -- in FOREX, what you see is what you get, allowing you to make quick decisions on your trades without having to worry or account for fees that may affect your profit/loss or slippage.

In the equities markets, you must pay both a commission and exchange fees. The over-the-counter structure of the FX market eliminates exchange and clearing fees, which in turn lowers transaction costs.

So, if FOREX broker don't charge commissions, how do they make money? Like all traded financial products, over-the- counter currency trading involves a bid/ask spread, which represents the prices at which your counterparty is willing to trade. Because the currency market offers round-the-clock liquidity, you receive tight, competitive spreads both intra-day and night. Stock traders can be more vulnerable to liquidity risk and typically receive wider trading spreads, especially during after-hours trading.

7): Instantaneous Order Execution and Market Transparency.

Market transparency is highly desired in any trading environment. The greater the market transparency, the more efficient the market becomes. Unlike other markets where transparency is compromised (like in the Enron scandal), FOREX markets are highly transparent (i.e., analyzing countries, and having access to real-time research / news, is easier than companies).

The FX market offers the highest level of market transparency out of all the financial markets. Because of this, order execution and fill confirmation usually occur in just 1-2 seconds. Markets that do not offer executable prices and force traders to absorb slippage obviously compromise the trader's profit potential considerably.

In the forex world, order execution is all-electronic and because you'll be trading via an Internet-based platform, instantaneous execution is routine. There are no exchanges, no traditional open-outcry pits, no floor brokers, and consequently, no delays.

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So, by now, if you haven't caught our FOREX fever -- our belief and interest in this market of unlimited profit- making opportunities -- well ... we're just not too sure what else we can do with you :-)

FOREX trading truly is the "World's Most Powerful Home-based Business" and we invite you to stay-tuned for tomorrow's lesson on *Currency Pairs* - how to read them, calculate profits, recommended pairs to trade, etc.

15 LESSON OF FOREX

2007-11-28T03:02:00.002-08:00

LESSON #3:
How Currencies Are Traded, Understanding FOREX Quotes, Market Structure and How to Love a *pip* -- soon to be your best friend!

Before I get into how currencies are traded, quoted and structured, let me tell you about one of the best advantages of FOREX Trading. The amount of money you need to place a trade (known as "margin") is all that can be lost!

I state it like this (in a glass-is-half-empty, negatively- presumptive kind of way) because, even though I know with proper self-taught education you're NOT going to lose as much as you win anyway, I want you to know that despite the super-high leverage associated with FOREX trading (400:1 is possible; meaning if you put up $1 the trading vendor will allow you to trade like you really have $400), it's still arguably less risky than futures (commodities) trading.

(And, forget stocks, you'll never get this type of LEVERAGE in the equities market)

Futures markets are often prone to sudden and dramatic moves, against which you can’t protect yourself, even by trading with protective stops. Your position may be liquidated at a loss, and you’ll be liable for any resulting deficit in the account. But because of the FX market’s deep liquidity and 24-hour, continuous trading, dangerous trading gaps and limit moves are eliminated. Orders are executed quickly, without slippage or partial fills. And finally, there are no margin calls -- for your protection, ALL our recommended brokers will automatically close out some or all of your open positions if your account equity falls below the level required to hold the positions. Think of this as a final, automatic stop, always working on your behalf to prevent a debit balance. In fact, if you pick from our list of recommended brokers, we guarantee that you’ll never lose more than you have in your FOREX account!

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Currencies are traded in dollar amounts called lots -- One lot is equal to $1,000, which controls $100,000 in currency. This is the "margin" I talked about above. Control $100,000 worth of currency for only 1,000 dollars. Good stuff, right?

Okay, let's move on....

Currencies are always traded in pairs in the FOREX. The pairs have a unique notation that expresses what currencies are being traded. The symbol for a currency pair will always be in the form ABC/DEF. ABC/DEF is not a real currency pair, it is an example of a symbol for a currency pair. In this example ABC is the symbol for one countries currency and DEF is the symbol for another countries currency.

Here are some of the common symbols used in the Forex:

USD - The US Dollar

EUR - The currency of the European Union "EURO"

GBP - The British Pound

JPY - The Japanese Yen

CHF - The Swiss Franc

AUD - The Australian Dollar

CAD - The Canadian Dollar

There are symbols for other currencies as well, but these are the most commonly traded ones.

A currency can never be traded by itself. So you can not ever trade a EUR by itself. You always need to compare one currency with another currency to make a trade possible.

Some of the common PAIRS are:

EUR/USD Euro / US Dollar "Euro"

USD/JPY US Dollar / Japanese Yen "Dollar Yen"

GBP/USD British Pound / US Dollar "Cable"

USD/CAD US Dollar / Canadian Dollar "Dollar Canada"

AUD/USD Australian Dollar/US Dollar "Aussie Dollar"

USD/CHF US Dollar / Swiss Franc "Swissy"

EUR/JPY Euro / Japanese Yen "Euro Yen"

The listed currency pairs above look like a fraction. The numerator (top of the fraction or "left" of the / however you want to SEE it) is called the base currency. The denominator (bottom of the fraction or "right" of the /however you want to SEE it) is called the counter currency. When you place an order to buy the EUR/USD, for instance, you are actually buying the EUR and selling the USD. If you were to sell the pair, you would be selling the EUR and buying the USD. So if you buy or sell a currency PAIR, you are buying/selling the base currency. You are always doing the opposite of what you did with to base currency with the counter currency.

If this seems confusing then you're in luck. You can always get by with just thinking of the entire pair as one item. Then you are just buying or selling that one item. Thinking like this will still enable you to place trades. You only need to be aware of the base/counter concept for Fundamental Analysis issues.

So why is it important to know about the base/counter currency now? The base/counter currency concept illustrates what is actually taking place in a Forex transaction. Some of you reading this, know that short-selling was restricted in the stock market (Short-selling is where you sell a stock/currency/option/commodity first and then try to buy it back at a lower price later). But in the FOREX you are always buying one currency (base) and selling another (counter). If you sell the pair you are simply flipping which one you buy and which one you sell. The transaction is essentially the same. This allows you to short-sell with no restrictions!

You want to be able to short-sell with no restrictions so you can make money when the market drops as well as when it rises. The problem with traditional stock market trading is that the market has to go up for you to make money. With FOREX trading you can make money in all directions.

Love Your *pips*
Currencies are traded on a price interest point (pip) system. Each currency pair has its own pip value.

Since we have a listed currency PAIR (i.e., EUR/USD, EUR/AUD), we need a way to talk about its associated number or price. When you see a FOREX price quote, you'll see something listed like this:

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The first component (before the slash) refers to the bid price (what you obtain in JPY when you sell USD). In this example, the bid price is 118.46. The second component (after the slash) is used to obtain the ask price (what you have to pay in JPY if you buy USD). In this example, the ask price is 118.51. The difference between the bid and the ask price is referred to as the spread (how brokers REALLY allow you to trade commission-free). In the example above, the spread is .05 or 5 pips.

Sometimes you won't see a two-sided quote, consisting of a 'bid' and 'offer'. But, rather, you'll see something like...

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When you see a Forex currency pair price quote, like the one above, just remember that that last digit of the price is referred to as the *pip*. So if you see a quote (123.50) and then a qu.ote in one min (123.51), the price rose 1 pip. Similarly, if you see a price quote of 187.50 and then after 5 min (187.58), the price rose 8 pips. The pip is always the last decimal place of the currency price quote.

YOUR GOAL IS TO CAPTURE AS MANY PROFITABLE pips AS POSSIBLE!

Since the US dollar is the centerpiece of the FOREX market, it is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair.

In the example above, a quote of USD/JPY 123.50 means that one U.S. dollar is equal to 123.50 Japanese yen.

When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote above increases to 124.01, the dollar is stronger because it will now buy more yen than before.

The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.4366, meaning that one British pound equals 1.4366 U.S. dollars.

In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.

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So, now that you're fully indoctrinated into how to read currency quotes, let us remind you one on thing:

YOUR GOAL IS TO CAPTURE AS MANY PROFITABLE pips AS POSSIBLE!

Oh yeaaaaah ... that was already mentioned, wasn't it? :-)

The point: never lose sight of your objective. While the above lesson could go on and on for pages, it still wouldn't make you a world-class FOREX trader.

But, the combined power of our remaining lessons, just might.

15 LESSON OF FOREX

2007-11-28T03:02:00.001-08:00

LESSON #4:
Buying (going "long") and selling (going "short") in the FOREX market. How to do it and calculate your profit or loss (you won't win ALL the time, but most of the time, YES, if you've got a good trading method).

Here's TWO timeless rules of Investing as they relate to today's lesson:

RULE #1) ~ Cut your losers; let your winners ride.

Let's be frank (we never promised any rose-colored glasses here did we? Well, at least not the ones you can wear ALL the time): YOU WILL HAVE LOSING TRADES.

We do. Every FOREX trader does. The key to being a consistent, predictable, reliable trader is to, at the end of the day, add up more wins than losses. And, when you KNOW (based off your trading rules), without a doubt, that YES, indeed you are, in a losing trade, don't keep losing money (lowering your stop loss) just to *prove you are right* or your rules are wrong (however you want to look at it).

Let's face it - you can't turn a sow's ear into a silk purse. You can't change the spots of a leopard and you can't turn chicken poop into chicken salad. The best trades are usually "right" immediately (the techniques, rules, methods and strategies we teach at RapidForex.com will be your best indicator for just what a "right" trade really is).

Remember, people have been trading the markets for a hundred and sixty years. The smart traders know there's going to be another trade. Cut your loses short and compound those winning positions.

RULE #2) ~ Thou Shalt Not Trade the FOREX Without the Placing of a Stop Loss Order.

When you place a STOP order, right along with your ENTRY order, via your online trade station, you've just automatically prevented a potential loss from "running" too far.

Before initiating any trade, if you haven't already figured out at what point you would be wrong and would want to cut your loses or, at the very least, reevaluate your position from the sidelines, then you shouldn't be putting on the trade in the first place.

Show us a FOREX trader who doesn't use stop loss orders and we'll show you someone who loses a lot of money.

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To make a profit, in the FOREX, a trader (possibly YOU soon?) can enter the market as a *buy position* (known as going "long") or a *sell position* (known as going "short").

For discussion, let's assume you've been studying the EURO (which, if you remember from yesterday's lesson, is paired first with the U.S. dollar or USD. Since it is paired first, it is the base currency).

Your trading methods, rules, strategies, etc., tell you that prices will rise during a particular timeframe. So you buy the EUR/USD pair (or, technically, you will simultaneously buy euros, the base currency, and sell dollars).

You open up your handy trading station software (provided to you for free by the online broker), which resides on your desktop, and you see that the EUR/USD pair is trading at:

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REMEMBER: the quote to the left of the / (1.3242) refers to the bid or "sell" price (what you obtain in USD when you sell EUR). The quote to the right of the / (1.3245) is used to obtain the ask or "buy" price (what you have to pay in USD if you buy EUR).

So, since you believe that the market price for the EUR/USD pair will go higher, you will enter a *buy position* in the market. For simplicities sake, let's say you bought one lot at 1.3245. As long as you sell back the pair at a higher price, then you make money.

But, no worries. This seemingly elaborate process is handled, and even calculated for you, via the broker's software mentioned above. The chart software and the quote board are in agreement with all sides of the currencies.

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To illustrate a typical FX SELL trade, consider this scenario involving the USD/JPY currency pair:

REMEMBER ~ Selling ("going short") the currency pair implies selling the first, base currency, and buying the second, quote currency. You sell the currency pair if you believe the base currency (USD) will go down relative to the quote currency (JPY), or equivalently, that the quote currency (JPY) will go up relative to the base currency (USD).

NOTE: while the Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you've never been in the FOREX market before, trust us when we say, "this process is nearly seemless through your broker trade station (software). We're just showing you this thought- process below so you can SEE how a PROFIT occurs even when SELLING a currency pair.

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The current bid/ask price for USD/JPY is 105.26/105.30, meaning you can buy $1 US for 105.30 Japanese YEN or sell $1 US for 105.26 YEN.

Suppose you decide that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise.

So you make the trade: selling US $100,000 and purchasing 10,526,000 YEN. (Remember, at 1% margin, your initial margin deposit would be $1,000.)

As you expected, USD/JPY falls to 104.26/104.30, meaning you can now buy $1 US for $104.30 Japanese YEN or sell $1 US for 104.26

Since you're short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit.

You buy US $100,000 at the current USD/JPY rate of 104.30, and receive 10,430,000 YEN. Since you originally bought (paid for) 10,526,000 YEN, your profit is 96,000 YEN.

To calculate your P&L in terms of US dollars, simply divide 96,000 by the current USD/JPY rate of 104.30.

Total profit = US $920.42

15 LESSON OF FOREX

2007-11-28T03:00:00.002-08:00

LESSON #5:
Charting Your Way to Success: FOREX Price Charts, What They Mean and How to Use Them "What's the difference between the speculative winner and the ignorant loser in FOREX?" my silver-tongue friend asked.

When I thought about it, numerous things came to mind - such as discipline, trading rules, not being greedy etc., but what came out of my mouth was really no big surprise:

"Understanding the charts... they represent so, so much. Ya gotta know they represent the lifeblood of the market. Know them well and you'll be head-and-shoulders above the rest."

We at RapidForex.com will be the first to admit that reading charts, and interpreting patterns, are more an art form than a skill; however, knowing you'll have to be personally in- tune and subjectively-creative with the charts (basing your entry and exit decisions on YOUR OWN combined methods of technical analysis) doesn't mean you should run-for-the- hills.

Nope, don't be scared...

The beauty of FOREX charts, as opposed to charts used for, say, daytrading stocks, is that they are pretty easy to interpret and use. They're a reflection of a slower-moving, stable economy (the one of a country) compared to the future and daily drama of company reports, Wall street analysts and shareholder demands.

And, don't forget...unlike stocks, currency charts rarely spend much time in tight trading ranges and have the tendency to develop strong trends (even though the FX market may be volatile, it's more predictable). And, rather than tens of thousands of stocks to analyze, you only have a few mayor currencies to trade.

===================

The complimentary charting software provided by any one of our recommended brokers will be absolutely sufficient for you to put your finger (eye) on the pulse of the market for any one currency pair.

Understanding just a few basic points, below, of the technical analysis of currency chart reading can lead to increased profit potential that far exceed the hazards of other markets.

===============

Pricing - Price reflects the perceptions and action taken by the market participants. It is the urgency between buyers and sellers in the Over-The-Counter (OTC) or 'interbank' market that creates price movement. Thus, all fundamental factors are quickly discounted in price. Therefore, by studying the price charts, you are indirectly seeing the fundamental and market psychology all at once - after all the market is fed by two emotions - Greed and Fear - and once you understand that, then you begin to understand the psychology of the market and how it relates to the chart patterns.

Data Window - Most FX online charting stations ,when you click on a price bar or candlestick, will display a small box of data usually called a display window which will contain the following items:

H = Highest_Price

L = Lowest_Price

O = Opening_Price

C = Close_Price (or Last_Price)

The most common types of price bars, used in FOREX trading, are the Bar Chart and the Candlestick chart:

Bars Charts - Price bars are a linear representation (a line) of a period of time. This enables the viewer to see a graphic representation summarizing the activity of a specific time frame. As an example, we use one minute and five-minute time intervals for our system. Each bar has similar characteristics and tells the viewer several important pieces of information. First, the highest point of the bar represents the highest price that was achieved during that time period. The lowest point of the bar represents the lowest price during the same period. Regular bars display a small dot on the left side of the bar which represents the opening price of the period and the small dot on the right side represents the closing price of the period.

Candlesticks - Japanese Candlesticks, or simply Candlesticks as they are now known, are used to represent the same information as Price bars. The only difference is that the difference between the open and close form the body of a box which is displayed with a color inside. A red color means that the close was lower than the open, and the blue color represents that the close was higher than the open. If the box has a line going up from the box it represents the high and is called the wick. If the box has a line going down from the box, it represents the low and is called the tail. Many interpretations can be made from these "candlesticks" and many books have been written on the art of interpreting these bars (you'll find a few links in our Resources Section).

So, the main thing to keep in mind between the two types of price charts is this:

Candlestick charts are similar to bar charts in that the top tip of a vertical line represents the high and bottom tip represents the low. However, market activity between the OPEN and the CLOSE is represented differently by the use of candlestick bodies.

Because of their colored bodies, candles provide greater visual detail in their chart patterns than bar charts. Which is why we recommend you become intimately familiar with Candlestick charts or, as we like to call them, "bar charts on steroids."

Chart Intervals & Time Frames:
A chart Time Scale & Period, or timeframe, basically refers to the duration of time that passes between the OPEN and the CLOSE of a bar or candlestick.

While most of our trading methods, outlined in our course packages, will have you viewing the 5-min and 1-min candle charts, it is often useful to look at larger time frames (like the 1-hour or Daily chart).

For instance, with your broker software, you will be able to view a currency pair, in a 1-hour timeframe over a 2-day period, 5-day period, 10-day period, 20-day period and 30- day period.

Most of the short-term time intervals (5-min and 1-min charts) are used for entry and exit points and the longer- term time intervals (1-hour and daily charts) are used to gauge where the CORRECT trend is (we teach this extensively in our course titled "Rapid Forex Surfing").

15 LESSON OF FOREX

2007-11-28T03:00:00.001-08:00

LESSON #6:
Economic Fundamentals: Or, What influences Prices In the FOREX market

Before we tell you a little about what this form of market analysis is and why you should, at least, know about it, use it some (but not necessarily focus on it), let us give you a few excerpts from two Traders being interviewed by Jack Schwager in the now-famous book MARKET WIZARDS.

Once you're through reading these beliefs, from two legendary market wizards, you'll have a good understanding on where our ideas lie when it comes to using one (fundamental analysis) or the other (technical analysis) or both to predict future currency pair price movement.

===================

[From page 161 - interview with Ed Seykota]:

QUESTION: What are your thoughts about using fundamental analysis as an input in trading?

ED'S RESPONSE: Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them "funny-mentals." However, if you catch on early, before others believe, then you might have valuable "surprise-a-mentals."

QUESTION: You answer is a bit facetious. Does it imply that you only use technical analysis?

ED'S RESPONSE: I am primarily a trend trader with touches of hunches based on about twenty years of experience. In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary components of my trading.

=================================================

Now, let's look at Bruce Kovner, who has a less pronounced one-sided belief on this issue:

=================================================

[From page 60 - interview with Bruce Kovner]:

QUESTION: Do you always use fundamental analysis in forming your trading decisions?

BRUCE'S RESPONSE: I almost always trade on a market view; I don't trade simply on technical information. I use technical analysis a great deal and it is terrific, but I can't hold a position unless I understand why the market should move.

There is a great deal of hype attached to technical analysis by some technicians who claim that it predicts the future. Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders say about the future activity of other traders.

For me, technical analysis is like a thermometer. Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he's not going to take a patient's temperature. But, of course, that would be sheer folly. If you are a responsible participant in the market, you always want to know where the market is-- whether it is hot and excitable, or cold and stagnant. You want to know everything you can about the market to give you an edge.

Technical analysis reflects the vote of the entire marketplace and, therefore, does pick up unusual behavior. By definition, anything that creates a new chart pattern is something unusual. It is very important for me to study the details of price action to see if I can observe something about what everybody is voting for. Studying the charts is absolutely crucial and alerts me to existing disequilibria and potential changes.

==========================

So, by now, you've probably figured out one of the unspoken truths of trading: there is a tendency to pigeonhole traders into two distinct schools of market analysis - fundamental and technical.

For forex traders, the fundamentals are everything that makes a country tick. The release of economic & inflation indicators (i.e., consumer spending, employment cost index, government spending, producer price index, etc.), political factors, government policy or an individual event can set the market in a frenzy. These have to be considered when making the decision weather to trade or not.

Technical analysis, which we will cover more in tomorrow's lesson, simply put is a way of using historical price data (via the charts) in different ways to predict the future price of a currency pair.

Charts are needed, but the reality is...

Fundamental analysis is a very effective way to forecast economic conditions, but not necessarily exact market prices. Or, said another way: as a general rule, while you DO need to have a handle on the most influential contributors for the cause of a currencies price to move up or down, you MUST trade in agreement with the supporting technical indicators.

The reason foreign exchange traders put the most emphasis on technical analysis is because traders around the world use similar charts and tools in predicting market trends. The reason the FOREX market can be so predictable some times is that if the majority are using the same graph for determining patterns and trends, then it is highly likely that they will act in a similar manner. So several thousand traders who have all charted the same resistance line, for example, will most likely either set their trades and direction to conform to that line.

=======================

Since we'll be teaching you, via our courses, to become sound TECHNICAL TRADERS, we'll cover it more in detail tomorrow; however, we still wanted you to know what FUNDAMENTAL analysis is and what it does.

Here's a little more background.

When fundamental data is made available to the public there is a reaction from investors and speculators. Information in the form of news and economic indicators is more vague than that of technical indicators. There is a lot of gray area in this type of analysis. The market will ultimately react to how people think the economic data compares to the current market situation.

Economic indicators usually reveal information that "Should cause a currency to go up in price" or "May cause a currency to go down". The words 'should' & 'may' in the quotes above reveal the ambiguity of the fundamental data.

Here is an example of what analyzing fundamental data is like. Let's suppose there are six economic indicators (there are a lot more). Let's call our six indicators A,B,C,D,E, & F. Now we wait for the data from our indicators to be published in a financial magazine or at an online source. We manage to get the readings for our economic data for the EURO:

Indicator A: is in a range where the Euro may go up Indicator B: is in a range where the Euro should go up Indicator C: is in a range where the Euro could go down Indicator D: is in a range where the Euro usually goes down Indicator E: is in a range where the Euro could go up Indicator F: is in a range where the Euro may go down.

By looking at the above indicators, you don't know what the Euro is going to do. Furthermore, currencies are always traded in pairs (as was explained in Lesson #3). So you would have to get the fundamental data for another currency pair and compare it with the EURO. We think you can appreciate that this is no simple task.

We do not want to discourage you away from fundamental data. The best way to learn is to learn about one piece of economic data at a time. Eventually you will build a puzzle from all of the fundamental and technical data and make more informed trading decisions.

15 LESSON OF FOREX

2007-11-28T02:59:00.000-08:00

LESSON #7:
Technical Analysis: Or, How to Predict the Future by Studying the Past (even if the "past" was 15 minutes ago).

As you've probably guessed by now, the reason we touched upon TECHNICAL analysis in yesterday's lesson, but saved its DETAILED discussion for today (last, behind the discussion of FUNDAMENTAL analysis), is twofold:

#1) to ensure you know they're mutually-inclusive. The best traders don't discount one or the other but understand that having a grasp on how the fundamentals influence market sentiment gives him/her an edge over those traders who don't.

#2) to ensure you know that TECHNICAL analysis is the easiest and most precise way of trading the FOREX market.

Before we tell you more about technical analysis, understanding the philosophical assumptions on which technical analysis is based, and why it's ideally-suited for the FOREX market, would be a good start:

#1) "The numbers don't lie" - all available information and its impact on traders, and the market, are already reflected in a currency's price.

#2) Prices move in trends - the foreign exchange market is mostly composed of trends and is, therefore, a place where technical analysis can be very effective.

#3) History repeats itself - over time, certain chart patterns become consistent, predictable and very reliable. The catch is SEEING them. There's always more than meets the eye at first glance.

The Magic Bullet, the Holy Grail, the Secret Sauce:

While we're not claiming that you'll become wealthy by diving deep and hard into FOREX technical analysis, techniques, methods, etc., we WILL go on the record and say that all wealthy FOREX traders DO perform technical analysis.

Why ?

Because, like us, they have unyielding B-E-L-I-E-F in one simple TRUTH:

*** PRICES MOVE IN TRENDS ***

The traders who don't believe this obviously have no need to implement a trading methodology on technical analysis. But, over 100 years of research has shown that those who trade "with the trend", more often than not, greatly improve their changes of winning (i.e., making a profitable trade).

Many times finding the prevailing trend will help you become aware of the overall market direction and offer you better visibility--especially when shorter-term movements tend to clutter the picture. And many times following the trend will bail you out of an initially less than great entry point.

So, how does technical analysis help you to determine what the trend is and HOW to trade *with it* versus against it?

Okay good question Rapidforex and, yes, we'll answer that, but before we do, let us first make sure you understand one very IMPORTANT POINT:

Even though, through our courses, we teach you how to use and read various technical indicators to identify a long- term trend, spot predictable chart patters and use certain rules to enter and exit a high-probability trade -- and even though all this involves sound logic, parameters, proven methods, processes, formulas, data, and research, these technical indicators, by themselves, are not the Holy Grail of FOREX trading. But, they're not some passing fad or hyped-up secret black box either. Beyond the mere rules, the human element is core to the strategy. It takes discipline and emotional control to stick with trading Following through the inevitable market ups and downs. Keep in mind though, good technical traders expect ups and downs. They are planned for in advance.

Okay, so now that you know that we're not claiming technical analysis is the Magic Bullet of trading (we often get asked, "Of the indicators you teach us how to use, which ones are better?" and we reply: NONE - technical indicators should simply be components of your overall customized / personalized trading system and not systems in and of themselves. They are like tools in a tool kit, not the kit itself!) let's talk about what technical analysis helps you look for:

The objectives - As a FOREX Technical Trader, your goals are:

#1) To figure out the price action of the currency pair. Price is the main concern. If the EUR/USD is at 1.3224 and goes to 1.3220, 1.3114, 1.3010 - the market is in a down trend. Despite what every technical indicator might predict, if the trend is down, stay with the trend. Indicators showing where price will go next or what it should be doing are useless. A trader need only be concerned with what the market is doing, not what the market might do. The price tells you what the market is doing.

#2) To always remember that technical indicators are only giving you confirmations based on what the market is telling you. So listen to the market and let it dictate which method you will use and which tool you will pull out of your bag of strategies and techniques. For only by listening to the markets will you ever be able to conquer it successfully!

Indicators: Their Uses
Here are just a few of the most popular indicators and their purposes as they relate to the Currency Markets.

<<<>>>

If you believe in the "trend-in-your-friend" tenet of technical analysis, moving averages are very helpful. Moving averages tell the average price in a given point of time over a defined period of time. They are called moving because they reflect the latest average, while adhering to the same time measure.

A weakness of moving averages is that they lag the market, so they do not necessarily signal a change in trends. To address this issue, using a shorter period, such as 5 or 10 day moving average, would be more reflective of the recent price action than the 40 or 200-day moving averages.

Alternatively, moving averages may be used by combining two averages of distinct time- frames. Whether using 5 and 20- day MA, or 40 and 200-day MA, buy signals are usually detected when the shorter-term average crosses above the longer-term average. Conversely, sell signals are suggested when the shorter average falls below the longer one.

There are three kind of mathematically distinct moving averages: Simple MA; Linearly Weighted MA; and Exponentially Smoothed. The latter choice is the preferred one because it assigns greater weight for the most recent data, and considers data in the entire life of the instrument.

<<<>>>

Moving Average Convergence Divergence: MACD is a more detailed method of using moving averages to find trading signals from price charts. Developed by Gerald Appel, the MACD plots the difference between a 26-day exponential moving average and a 12-day exponential moving average. A 9- day moving average is generally used as a trigger line, meaning when the MACD crosses below this trigger it is a bearish signal and when it crosses above it, it's a bullish signal.

As with other studies, traders will look to MACD studies to provide early signals or divergences between market prices and a technical indicator. If the MACD turns positive and makes higher lows while prices are still tanking, this could be a strong_buy signal. Conversely, if the MACD makes lower highs while prices are making new highs, this could be a strong bearish divergence and a sell signal.

<<<>>>

The basic interpretation of Bollinger Bands is that prices tend to stay within the upper and lower bands. The distinctive characteristic of Bollinger Bands is that the spacing between the bands varies based on the volatility of the prices. During periods of extreme currency price changes (i.e., high volatility), the bands widen to become more forgiving. During periods of low volatility, the bands narrow to contain currency prices. The bands are plotted two standard deviations above and below a simple moving average. They indicate a "sell" when above the moving average (or close to the upper band) and a "buy" when below it (or close to the lower band). The bands are used by some forex traders in conjunction with other analyses, including RSI, MACD, CCI, and Rate of Change.

<<<>>>

Fibonacci retracement levels are a sequence of numbers discovered by the noted mathematician Leonardo da Pisa during the twelfth century. These numbers describe cycles found throughout nature and when applied to technical analysis can be used to find pullbacks in the currency market.

Fibonacci retracement involves anticipating changes in trends as prices near the lines created by the Fibonacci studies. After a significant price move (either up or down), prices will often retrace a significant portion (if not all) of the original move. As prices retrace, support and resistance levels often occur at or near the Fibonacci Retracement levels.

In the currency markets, the commonly used sequence of ratios is 23.6 %, 38.2%, 50% and 61.8%. Fibonacci retracement levels can easily be displayed by connecting a trend line from a perceived high point to a perceived low point. By taking the difference between the high and low, the user can apply the % ratios to achieve the desired pullbacks.

<<<>>>

RSI stands for Relative Strength Index. The RSI measures the markets activity as to whether it is over bought or over sold. It gives a trader an indication as to which way the Market is moving. It is important to note, that this is a leading indicator and thus allows one to see what the market is ABOUT to do and then act accordingly. The higher the RSI number, the more over bought it is and conversely the lower the RSI number, the more over sold it is. It is a great leading indicator for the micro and macro reversals in the market. By using an RSI on the 1 minute chart set at a period of 18 and overlaid on the bottom of your charts tend to give the best entry signals. This can also be applied to the 5-minute chart as well. The two significant entry numbers are 25 and 75.

===================

Technical Traders use some of these indicators, all of them, or a combination of them (our course packages tell you HOW we use various indicators to trade successfully) to confirm that they really do have a high-probability trade signal. A consistently winning FOREX trader will use 3 or 4 indicators to provide a DEFINITIVE signal to get in a trade.

Always remember: missed money is always better than lost money !

The GOLDEN RULE is this: Technical trading should be primarily systematic with a touch of "gut check" (see Ed Seykota's interview excerpt from yesterday's lesson).

Price and time are pivotal at all times. Technical methods are not based on an analysis of fundamental supply or demand factors, political news, or a countries economic profile.

Rather, to our pleasure, Technical Trading, gives us a good handle on how to answer these critical questions:

- How and when to enter the market.

- How many lots to trade at any time.

- How much money to risk on each trade.

- How to exit the trade if it becomes unprofitable.

- How to exit the trade if it becomes profitable.

15 LESSON OF FOREX

2007-11-28T02:58:00.000-08:00

LESSON #8:
"A rising tide raises all ships" ... Or ...
How To Determine if the Trend is truly your friend.

As we explained yesterday, the basis behind using technical analysis is to find trends when they first develop so you can ride the trend until it ends. The foreign exchange market is a very STRONG trending market and is, therefore, a place where technical analysis can be very effective.

But, as sure as the day is blue, we still know and meet traders every week who still end up buying (being "long") while the currency pair is in a basic downtrend, or selling short when a market is in a uptrend.

The key here is this: (it's so simple, some want to overlook it or "argue" with it).

Use as many technical indicators as you want, or create a personalized trading strategy based off a combination of indicators, to RECOGNIZE THE TREND. In other words, professional FOREX traders try to identify the major trend, the intermediate trend, and the short-term trend and then construct their trades in that direction, based off how long their rules allow them to hold a position.

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"We know that prices move up and down. They always have and they always will. My theory is that behind these major movements is an irresistible force. That is all one needs to know. It is not well to be too curious about all the reasons behind price movements. You risk the danger of clouding your mind with non-essentials. Just recognize that the movement is there and take advantage of it by steering your speculative ship along with the tide. Do not argue with the condition, and most of all, do not try to combat it."

-- Jesse Livermore

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So, what is Mr. Livermore - one of the most colorful, flamboyant and respected market speculators of all time - telling us?

In our terms, he's saying: If the action of the market shows your judgment to be correct, the successful trader 'stays with the market' and endeavors to make the maximum profit on each trade, according to his/her risk-to-reward / equity management rules. If and when the market goes against him/her, the smart trader will take profits and get out. In a narrow market (see definition below), when prices are not going anywhere to speak of, but move within a narrow range, there is no sense in trying to anticipate when the next BIG movement is going to be - up or down.

What Mr. Livermore is saying is to watch the market and see what the market is telling you about upcoming trends. Never argue with the market, or ask it for reasons or explanations.

=========================

The market often display's some very familiar patterns of price movement. Once a pattern is established, it becomes the most probable course of future price action until the market changes.

There are two types of markets which will become important for you to identify; trending and trend-less. Each market type has two specific patterns which you will also notice over time.

These market types and patterns are defined as follows:

>>> Trending - Steady elongated price movements with less than a 45-degree angel with occasional pauses, profit taking, or resting periods.

In a Trending market, you have:

- Uptrends - A pattern of higher highs and higher lows.

- Downtrends - A pattern of lower lows and lower highs.

>>> Trend-less - Erratic price movements which are often steep ( greater than 45 -degree angle ) and cannot sustain and thereefore must reverse. Although the movements can move many points in a short period of time, they often result in very little net price movement over time.

In a Trend-less market, you have:

- Choppy - An erratic pattern of higher highs and lower lows.

- Sideways - A narrow pattern of lower highs and higher lows.

While up-trend and down-trend days can offer excellent trading results, choppy markets often create stop outs, while sideways markets produce for little in either direction.

Your trading objective is to get into a trending market and ride until you make our target objective.

We cover many Trend Trading Strategies in our book, "Rapid Forex Surfing" -- you will learn how to identify and draw your own channel trendlines, support and resistance lines, triangle patterns, chart key top and bottom formations, etc. (just head on over to http://www.RapidForec.com to learn all about this amazing course).

15 LESSON OF FOREX

2007-11-28T02:57:00.000-08:00

LESSON #9:
FOREX Order Types and How to Use Them

When you open your trading station software (provided to you for free by any one of our recommended brokers), you will find there are TWO main ways to ENTER a market or, said in another way, there are two ways to place an initial order to buy or sell any currency pair.

(AFTER we discuss the MARKET and ENTRY order, we'll cover how to protect your profits and limit any potential or realized losses with the STOP and LIMIT order).

=====================

MARKET ORDER - an order to buy or sell a currency pair at the market price the instant that the order is received and processed (within seconds of hitting the "OK" button on your screen). When a market order is placed, you are simply saying "I'll buy or sell the currency pair at whatever price it is at when my order gets processed."

Example: If you are looking to place an order for JPY (YEN) when the dealing price is 104.00/05, a market order will request to buy JPY at 104.00 or will request to sell JPY at 104.05 (of course, whether you BUY it or SELL it is up to you and is chosen on the software drop down box. And, again, once you've made your selection, this order is placed with a single click and is executed almost instantly).

Within the courses we have for sale at RapidForex.com, 99% of the time, we will have you avoiding MARKET orders. The reason? They tend to compel the trader to act on impulse instead of according to a trading plan.

ENTRY ORDER - an order to buy or sell a currency pair when it reaches a certain price target. This can be any price in theory. You could set an entry order for the low price of a time period, or the high price of a time period. For instance, in one of our courses (Rapid Forex Education Manual 9.0) we teach you to always set an ENTRY order to be the same price as the *open price* of the time period. When you place an ENTRY order to BUY, for example, you are simply saying "I want to buy this currency pair at a certain price, if it never reaches that price, I don't want to purchase the pair."

Example: the current "real-time" quote for the EUR/USD is 1.3317. Your analysis shows that IF the pair hits 1.3329 (a key resistance point) that there's a high-probability the pair will turnaround (retrace down) so you decide to place an ENTRY order to sell the EUR/USD at 1.3327.

The ENTRY order above shows you how you are fully-empowered to pick a price and place an order to sell at that price. If the market hits 1.3327 ... great, you now have an OPEN position and, as long as the EUR/USD pair keeps dropping and you close out (exit) your trade at a price lower than 1.3327, you make money.

And, if you don't get in the trade, via your ENTRY order, don't worry. New trades are constantly developing and if your order entry doesn't get filled you can't lose any money. Learn not to be upset when an ENTRY order isn't filled. You are saved most of the time anyway because the currency pair did the opposite of what you thought and you would have lost money, most likely, if it did get filled. Remember, when orders are not filled, it means you never risked any money!

======================

After your ENTRY order is placed, you can set a STOP and/or LIMIT order if you desire. STOP and LIMIT orders are both ways to exit a trade, automatically (i.e., without closing out your position via the click of your mouse - manually), after the trade is entered.

A STOP order (something we always recommend) is used to stop losses. A LIMIT order (recommended if you can't monitor your open trade) is used to redeem profits. Where these orders are placed, in relation to your open trade, depends on the direction of the entry order.

Example STOP order: If you have an open buy position on USD/JPY, which you bought at 104.20, and you want to set a stop order in case the U.S. Dollar starts to depreciate against the YEN, to stop your loss (or limit your loss - however you want to look at it), you could set a stop order at 104.00, thus closing your position at a 20-pip loss.

Tip: a STOP order is always placed BELOW the current market value of that currency pair (if you are in a long trade).

Example LIMIT order: Assume you placed an ENTRY order to BUY EUR/USD for 1.6100. You might place the STOP order at 1.6081 (limiting your loss to 19 pips) but, at the same time, you could place a LIMIT order for somewhere around 1.6171. If the currency pair reaches that price level, the LIMIT order becomes a market order to sell, or close out, the BUY position for a 71-pip profit.

Tip: a LIMIT order is always placed ABOVE the current market value of that currency pair (if you are in a long trade).

=============================

This is all you really need to know in terms of placing orders. It's really not that complicated and, of course, our courses will walk you through the finer points of calculating your entry and exit points and ensuring you know how to scale in and out of trades with ease and precision.

If you've ever traded ONLINE before, maybe using e-Trade or a stock brokers online software package, you will be pleasantly surprised at just how intuitive, fun, and easy it is to use the desktop-based online software that a reputable FX broker can provide you.

15 LESSON OF FOREX

2007-11-28T02:56:00.000-08:00

LESSON #10:
Account Size, Lots, Margins, and the Allure of 200:1 Leverage

As you first learned in Lesson #2, no other market in the world allows the LEVERAGE that the exciting world of currency-trading does.

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Sidenote: LEVERAGE refers to margin trading. In the FOREX market, it is essentially the ratio of the amount used in a trade to the required security deposit needed, by the broker, for that trade.

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Normally, for most brokerages (at least the ones we recommend), a margin deposit of just $1,000 allows you to control a $100,000 position in the FOREX market. That's 100:1 leverage, or 1%. Or, said another way, a *regular full-sized account* -- sometimes referred to as a 100k account -- allows you to trade with lot sizes equal to $100,000. Each lot is worth $100,000 in currency. It will only_require_$1,000 to trade one lot (aka, "contract")

Think about this for a moment (it is what makes this market the hottest market to trade in right now): The FX broker has loaned you $99,000 dollars secured only_by_your $1,000. This is HUGE and, as you know by now, is what allows traders to make extraordinary incomes in this market. And, as you also are probably used to hearing - "leverage is two-edged sword" - it is what can cause you to lose a lot of money if you trade without rules or Stop-loss orders.

But, for argument's sake (and to keep the continued tone of this course on encouraging you to become a FOREX trader), let's just say you WERE the person to trade with reckless abandon -- with no common sense, no strategy, no money- management principles, etc. While we don't recommend that ... still, consider this:

Unlike Futures (Commodity Trading), the market that most people associate with HIGH leverage, you can never have a debit balance when trading FOREX!

So, despite the greater leverage associated with FX trading, it's still arguably less risky than futures trading. Futures markets are often prone to sudden and dramatic moves, against which you can't protect yourself, even by trading with protective stops. Your position may be liquidated at a loss, and you'll be liable for any resulting deficit in the account. But because of the FX market's deep liquidity and 24-hour, continuous trading, dangerous trading gaps and limit moves are eliminated. Orders are executed quickly, without slippage or partial fills.

And finally, there are no margin calls -- for your protection, the FX broker's trading platform will automatically close out some or all of your open positions if your account equity -- meaning the total floating value of the account -- falls below the level required to hold the positions. Think of this as a final, automatic stop, always working on your behalf to prevent a debit balance.

=============================

A Quick NOTE about Margin:

=============================

Besides being generous with their margin requirements (LEVERAGE), FX brokers also are very flexible with you. In other words, you are able to select the degree of leverage, or "gearing" as they call it, that you feel works best for you. The default margin for most brokers is set at 1% (and, of course, most traders prefer the lowest possible margin requirement), but if you prefer to trade with less leverage, some brokers allow you to trade with a 2% margin.

For instance, if you start with a 2% margin, then it will cost you $2000 to place a one-lot trade on a 100K (full) account. Your leverage is now 50:1 versus 100:1. As discussed in Lesson #3, currency moves in price-interest- points (pips), and in a regular (100K) account, each pip is worth about $8 to $10.

Mini Lots VS. Full-sized Lots
and How to Achieve up to 200:1 Leverage:

The Mini Account (explained more below) uses a different leverage calculation than a regular (100k) account. Instead of trading full-size currency lots (100,000 units), you'll trade in lots that are just 1/10 the size (10,000 currency units), which greatly reduces your risk. Pips in a Mini Account are worth, on average, $1 instead of the $8 to $10 mentioned above. The Mini FX account offers up to 200:1 leverage -- just a $50 margin deposit allows you to trade lots worth roughly $10,000 -- but the smaller lot sizes, with correspondingly smaller pip values, means that you'll be assuming less total risk. For example, while a 20-pip loss on a 100,000 EUR/USD position would be $200, the same loss on a 10,000 EUR/USD position in a Mini account would amount to $20.

So, here's the OVERVIEW of LEVERAGE (Margin, Account Size) on each of the two accounts discussed above:

100K (Regular Full-sized Account) - Minimum required account deposit = $2,000 - Recommended required account deposit = $5,000 to $10,000 - Traded in 100,000-unit currency lots - Default Margin: set at 1% ($1,000 per lot) - Leverage = 100:1 or 50:1 (if margin is set at 2%)

MINI Account - Minimum required account deposit = $300 - Recommended required account deposit = $2,000 - Traded in 10,000-unit currency lots - Default Margin: set at 0.5% ($50 per mini-lot) - Leverage = 200:1

Because there is no downside to trading a MINI Account (i.e., you're still entitled to all the benefits that full- size FX account holders enjoy - same state-of-the art trading software, charts, resources, and tools, etc.), and it is ideal for a new FOREX trader to develop a disciplined, rational forex trading strategy without excessively focusing on profits and losses (note: with less than $5,000 starting capital, you can't be WRONG too many times when trading with a regular account). . . we've developed an extensive complimentary course on how to use a MINI account.

If you haven't already read "Forex Freedom", just follow these instructions:

START SMALL, BUILD UP CONFIDENCE !!

There is NO MAXIMUM trade volume on the Mini account. Although the standard trade size is 10,000 units – you are not limited to trading one lot! For instance, you can trade 10,000 units, 50,000 units or 150,000 units. This means as you become more seasoned and build up confidence you can slowly increase the size of your positions to maximize profits (and losses). In fact the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade. The ability to customize the size of the trade enables better risk management.

DEVELOP YOUR TRADING SKILLS WITHOUT FOCUSING ON P&L !!

When trading 100,000 currency unit lots in a regular, full- size account, if you have a relatively small balance, you may tend to fixate on your equity fluctuations and sometimes base trading decisions on emmotional reactions to these fluctuations. Many traders, for example, resist closing-out unsuccessful trades at a loss, because they hope that the market will turn in their favor. Conversely, many tend to immediately take profits when the market moves in the desired direction, rather than maximizing their gains by allowing profits to run. With less capital at stake in a Mini FX account, however, you can develop a disciplined trading methodology -- as well as the confidence needed to be a successful currency trader -- without the anxiety and distractions that come with large P&L swings.

How to capitalize on these two advantages of the MINI account is exactly what we teach you in "Forex Freedom" -- we hope you enjoy it as much as Robert enjoyed writing it.

It is our goal to serve you with the best FOREX trading content on the planet. We have been labeled "the premier go- to website for value-packed, self-taught FOREX education & training." If you're not into forking out hundreds, or even thousands of dollars for seminars, DVD's and conference calls, we think you'll thoroughly enjoy what we have to offer.

Until tomorrow's lesson, just remember, "Life is Short, Eat Desert First."

15 LESSON OF FOREX

2007-11-28T02:55:00.001-08:00

LESSON #11:
DEMO Your Way to Forex Trading Success ...
or, How To Trade the FOREX for Free !

Hey, here's a tongue-in-cheek, rhetorical question for you:

WANT TO TRADE THE FOREX MARKET FOR FREE?

Who doesn't, right?

What if we told you can get your ambitious, ever-ready little hands on the same state-of-the-art software package that professional FOREX traders, throughout the world, are currently using to make real-time, LIVE currency trades?

What if we told you could experience the same dynamic market action and go through the same process of making decisions, based on breaking news, reacting to charting patterns, and tracking ones performance the same way full-time FOREX traders do?

And, what if, even if you don't put REAL MONEY into your account, you still really can't see any difference in how the market reacts to you and how you react to the market (well, okay, okay ... with imaginary money, we know ya just may be a tad more liberal with your trades, but we hope you aren't).

Okay, so here's the deal...

When we started writing this 20-part e-course, we realized these lessons could literally go on forever and, still, you won't know everything. At some point, every new FOREX trader needs to start DEMO-trading.

Once you begin to place demo trades, you will learn a lot about how Forex transactions are placed. This is an important step for you to be able to learn how to become a trader. A Demo Account allows one to become familiar with trading procedures, such as placing Market, Stop, Limit, OCO Orders without any risk. All dollar losses or gains on a Demo Account are imaginary but, as mentioned above, the EXPERIENCE is not!

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SIDENOTE: Although racking up big gains in a DEMO account does not insure profits in live trading, those who are NOT successful trading on paper (DEMO account) rarely are successful when money is on the line. So, yes, just playing around and getting familiar with a demo account can be a great learning experience; however, you will not learn how to become a trader this way. You need to have a trading strategy, like the ones we teach at www.RapidForex.com ==========================================

Here's how to get started with your own demo account.

Go to http://www.marketiva.com/?gid=7261

There you can sign up for a free mini-demo account. A mini account is just like a real demo account, except the trade sizes are smaller. In a real account the smallest trade size is $100,000, in a mini account the smallest trade size is $10,000 (this can be done with a $50 margin, the power of leverage!).

There are several other places online to sign up for a free demo account, but we recommend FXCM, because they have the best overall reputation online. FXCM has built itself to the premier Forex trading platform. We don't get paid anything to endorse them, but they are currently the best.

Once you sign up for your mini-demo account, you will need to try out one of the trial charting packages. Any of these will do because they all have the necessary indicator tools that we teach you to use in our course packages. You can then set up your demo account and start drawing trendlines, marking support & resistance levels, monitoring moving averages, etc. This is a good way to get used to how orders are placed. Once you have a real trading system, you will already know how to place orders properly.

Everyone makes mistakes placing orders. You need to experiment in a demo account to make your mistakes without losing money.

At this point you have to make a decision about how fast you would like to learn how to become a trader. The truth is Rapidforex, that the longer you wait to get in on this market, the more potential money you are missing out on. You need to decide what time frame is right for you to begin trading.

You need to decide if:

1. You want to place real trades within the next 3 months (or sooner, depending on your desire)

2. You want to build your knowledge for several months before placing real trades.

The choice is entirely yours. No-one else can make that decision for you. You need to make a plan and stick to it. It is important not to put off your success. Success requires action.

If you want to place real trades within the next 3 months, you should check out www.RapidForex.com. There are some great resources there at extremely affordable prices that can get you trading in a very short amount of time.

If you want to build your knowledge base, then continue to be on the lookout for these daily email lessons. You are already subscribed to it, all you need to do is read each article attentively as they are released.

15 LESSON OF FOREX

2007-11-28T02:54:00.000-08:00

LESSON #12:
When to LOOK for Trades in the Market That Never Sleeps

The key here is this: (it's so simple, some want to overlook it or "argue" with it).

=====================================================

-- Jesse Livermore

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So, what is Mr. Livermore - one of the most colorful, flamboyant and respected market speculators of all time - telling us?

What Mr. Livermore is saying is to watch the market and see what the market is telling you about upcoming trends. Never argue with the market, or ask it for reasons or explanations.

=========================

The market often display's some very familiar patterns of price movement. Once a pattern is established, it becomes the most probable course of future price action until the market changes.

There are two types of markets which will become important for you to identify; trending and trend-less. Each market type has two specific patterns which you will also notice over time.

These market types and patterns are defined as follows:

>>> Trending - Steady elongated price movements with less than a 45-degree angel with occasional pauses, profit taking, or resting periods.

In a Trending market, you have:

- Uptrends - A pattern of higher highs and higher lows.

- Downtrends - A pattern of lower lows and lower highs.

In a Trend-less market, you have:

- Choppy - An erratic pattern of higher highs and lower lows.

- Sideways - A narrow pattern of lower highs and higher lows.

While up-trend and down-trend days can offer excellent trading results, choppy markets often create stop outs, while sideways markets produce for little in either direction.

Your trading objective is to get into a trending market and ride until you make our target objective.

15 LESSON OF FOREX

2007-11-28T02:53:00.000-08:00

LESSON #13:
Equity Management & Margin Control

Because we're readily admitting that YOU will pre-judge this Lesson, based off its title above, as boring and quickly dismiss it as "something I've heard before" (hey, didn't we tell ya we KNOW human nature), we're going to go ahead and make a....

A VERY BLUNT IN-YOUR-FACE KINDA STATEMENT (not to offend you, just to keep you paying attention) and then TELL YOU A GRUESOME STORY. First the straightforward comment:

>>> 95% of the successful (full-time, well-paid) FOREX Traders we know feel that money-management is more important than the trading. And, it's so, so important to us that we believe if you don't grasp, and follow, the basic rules below, YOU WILL FAIL! (Hey, don't take this personally. It is what it is).

Okay, on to the story.

Bloody Tale of Vicious, Senseless Animal Slayings Guides FOREX Traders to True Wisdom.
A donkey, a lion, and a fox decide to go out hunting for rabbits. After a pretty good day of hunting, they had collected a large pile of rabbits. The lion says to Mr. Donkey, "I'd like for you to divide the rabbits fairly among the three of us."

So, the donkey took the rabbits and made them into three equal piles and said, "How's that?" The lion immediately pounced on the donkey and killed him.

Then the lion threw all the rabbits on top of the donkey and made one big pile. The lion turned to Mr. Fox and said, "I'd like for you to divide the rabbits evenly between the two of us." The fox walked over to the pile of rabbits and took one little scrawny rabbit for himself and put it in his pile. He left the rest of the rabbits in the large pile and said, "That pile of rabbits if for you, Mr. Lion."

The lion said, "Mr. Fox, where did you learn to divide so evenly?"

And the fox replied, "The donkey taught me."

===========================

The Moral of the Story ?

Well .... it seems quite clear it is this: if you can learn from your own mistakes, you are smart. However, if you can learn from others mistakes, then you are wise.

Yup, we agree with this. And, by reading the listed rules we have below to share with you, you will accelerate your profit-making potential in your own FOREX trading business.

You're about to read the combined wisdom of various traders who have "been there, done that." Traders who have experienced setbacks, challenges, and turned those temporary failures into successes. We've paraphrased these timeless rules (do's and don'ts) into our own words.

WELCOME ABOARD Rapidforex .... you're about to experience the thrill of hunting rabbits with a FOREX Lion. However, in this case, you won't get killed :-)

======================================

Equity management and properly handling leveraged margin accounts is the most significant part of any trading system. Again, most traders just don't understand how important this aspect of running a FOREX business is. The ones who DO ... know it's the critical point that separates the winners from the losers.

It was proved that if 100 traders start trading using a system with 60% winning odds, only 5 traders will be in profit at the end of the year. In spite of the 60% winning odds 95% of traders will lose because of their poor management of account equity.

But, the good news is, you don't have to be a mathematician or understand portfolio theory to manage risk. This can be easy as following these rules.

>>> RapidForex.com RULE #1: Thou shalt not risk more money than thou can afford to lose (Also known as "if you can't afford to lose, you can't afford to win."

Let's face it - this ain't bean ball. You will lose money. ALL traders loose money. Stop right here, delete this email, forget about trading currencies, do something else with the rest of your life if losing a portion of whatever money you might trade with would take food off your table, keep your kids from going to college or change your lifestyle. Repeat: there is no system or approach available that doesn't sustain losses sometimes. The trick is containing those losses.

>>> RapidForex.com RULE #2: Thou shalt never risk more than 2% of your margin account on any SINGLE trade (if you have a Mini Account, you may bend this to 5%).

For example, if you have $300 in your account, 2% is $6, equal to a 6 pip move. 5% is $15 or a 15 pip move. With a Mini-account, realistically your risk-per-trade has to be a bit higher than those who trade a 100K (regular) account. Once you get your account equity to $1000 or more then definitely limit your risk to only 2% of your margin account on any SINGLE trade.

>>> RapidForex.com RULE #3: Thou shalt always, Always, Always Use a STOP-loss order.

When you place a STOP order, right along with your ENTRY order, via your online trade station, you've just automatically prevented a potential loss from "running" too far.

Show us a FOREX trader who doesn't use stop loss orders and we'll show you someone who loses a lot of money.

>>> RapidForex.com RULE #4: Thou shalt predetermine your exit point BEFORE you get into a trade.

To use a football analogy, if you don't know where the End Zone is what's the point in walking up to the scrimmage line to make a play? In other words, when you place a LIMIT order (or, at least mentally place it), you're telling yourself, and the rest of the market, that you understand the game plan, the big picture, the reason for being on the trade (the football field) in the first place. It is prudent to let profits run and follow a market with stop orders in an uptrending market. But it's the wisest of traders who put such a limit on their selling (profit-taking). Because of Greed, it is always more difficult to make a decision to sell (take profits) than buy. We don't want you to be the one who says, "If only I had sold when...." Know your exit strategy / game plan and this won't be you.

>>> RapidForex.com RULE #5: Thou shalt paper-trade first.

First open a DEMO account and get to learn how to place orders with it (we cover this in detail in Lesson #11). You shouldn't invest real money until you have shown a profit in a DEMO account. Many people have losing DEMO accounts and still believe that it will be different with real money. Wrong! As mentioned in Lesson #11, the only thing different between a DEMO account and a LIVE account is, with a DEMO account, you'll tend to be less-conservative and lacksadaisical with the rules. If you lose paper-trading, what makes you think you'll win with real money?

>>> RapidForex.com RULE #6: Thou shalt take a Breather when your Core Equity is significantly down.

First of all, you should understand the following term "Core equity." Core equity = Starting balance - Amount in open positions. If you have a balance of $10,000 and you enter a trade with $1,000 then your core equity is $9,000. If you enter another $1,000 trade, your core equity will be $8,000. Assuming you lost money on each trade, your core equity certainly won't be where you started it with. If you lose a certain predetermined amount of your starting capital (e.g., 10 percent to 20 percent), take a breather, analyze what went wrong, and wait until you feel confident you have a high probability trading idea/method/system before entering the market again.

>>> RapidForex.com RULE #7: Thou shalt not let thy emotions rule.

This is probably the hardest rule to keep. Yet, we have never seen a successful trader over the long haul who didn't follow it. Most people want to be winners. Most people want to make the big score and have the accompanying bragging rights. We all tend to get greedy, traders usually more so. But trading is a business. It's hard work. You must be cool, calm and always ready for the next opportunity. You can't have emotionally high highs or emotionally low lows because you'll make too many mistakes, and mistakes mean losses. If you start winning and get "too high," the tendency is to over-trade. By that, I mean starting to make marginal trades or "seat-of-the-pants" trades just for the sake of making trades, instead of waiting patiently for the right opportunity. If you get too low (this is usually after some losses), you are liable to skip the trades you should be making, or you might try to "cherry-pick" a system or an advisor's recommendations for fear of more losses, inevitably making the wrong choices. To win this game you must remain patient and clear-headed.

=========================

Finally, to finish this lesson up, we have TWO basic rules about winning in the FOREX as well as in life:

(1) If you don't bet (trade), you can't win.

(2) If you lose all your chips, you can't bet (trade).

Think about it. Hard once. Then softly twice if you have too.

15 LESSON OF FOREX

2007-11-28T02:52:00.000-08:00

LESSON #14:
20 pips to 200 pips: Small Trades to Big Trades and Somewhere in Between.

There are FOUR different classifications of FOREX traders in the market. Each one employing one of three different pip- trading (profit-taking) styles.

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Sidenote: remember what a "pip" is? We talked about this in Lesson #3, but for a refresher: A pip is the last number to the right in a currency quote For example: If the EUR/USD traded at 1.3335 this morning. The "5" is the pip. If it moves to 1.3435, that would be a 100-pip move.

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There are the novice traders – the rookies, the ones who don't learn from the "donkey" (see yesterday's lesson; Lesson #13).

In addition to the novice traders, there are three other levels of participation in the FOREX market: the dealers, the institutional traders, and the advanced traders.

The DEALERS are the most powerful and they make the market, setting prices and putting together deals.

The INSTITUTIONAL traders work in banks, wire firms, or government agencies. They trade huge amounts of money at a time, and the size of their trades gives them enormous power.

Next, there are the ADVANCED traders. This group is comprised of people from all across the world, sitting in smaller investment firms, offices, or even their homes. You can be a part of this group. In some cases, the ADVANCED traders are the smartest group – trade for trade – than any other group. Because they don't move a lot of money on each trade, they don't have as much power as the institutional players. Because their trades are brokered by the dealers, they'll never have absolute trading power. But, because there are so many novice traders – the advanced traders have plenty of people that they can outrun.

==========================

Each of these different traders have different philosophies about how many pips to go after.

(1) Some traders go after large pip targets -- from 50 to 500 (or more). They are often position traders, leaving trades overnight - often for days. Usually they trade one or two lots and use stops of around 50 to 100 pips.

(2) You have other traders that focus on daytrading (getting in and out of a trade within one day, usually though within hours) to get 10 to 20 pips trading one to a few lots.

(3) You also have another breed of trader that will trade multiple lots to catch just 5 to 10 pips, usually within minutes. For instance, trading 10 lots for 10 pips is an equal profit to someone trading 1 lot for 100 pips. Both would equal $1,000 profit, depending on which currency pair was traded and assuming they were on a standard 100K account (i.e., using 100:1 margin or putting up $1,000 to trade $100,000 worth of currency). Traders who attempt to trim off profits, within minutes, are usually called "Scalpers."

There is nothing wrong with trading with any of these objectives in mind. In fact, it is good to be versatile in your trading. They each have their pros and cons but, if somebody gets consistent profits (more winners than losers) with one or the other, then that one strategy should be considered GOOD.

As you progress from ROOKIE to ADVANCED trader you will figure out your personal preference and tolerance for risk.

Most of the courses we have for sale at RapidForex.com (especially the "Forex Surfing" course) teach you to shoot for 10 to 20 pips PER TRADE. It's as simple as this: We don't try to make a ton of money on each trade (excessive GREED), we never try to get revenge (a lot of traders get creamed in the market and then want to strike back. So they double their last order and go for broke) and we're not scalpers (someone who sits and makes 20-second trades for a few pips at a time).

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Yes, You can Replace Your Full-time Income and Make Over 5-figures a Month On Just 10 to 20 pips Per Trade

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Generally, the larger the pip target you are shooting for the greater will be the chance that the market will turn around on you before it reaches your target. Conversely, the smaller the pip target you are shooting for the greater will be the chance of the market reaching your target.

All things considered equal, there is a greater chance that you'll successfully pull 10-20 pips out of the market than 50 pips, or even 30 pips. The further out you go the more likely it becomes that the market will change its mind.

In our "Forex Surfing" course we give you many ideas and trading techniques to consistently capture 10 to 20 pips per trade, per day. And, once you get good at doing that, then the sky's the limit. We teach you how to compound your gains, scale in and out of trades and a lot of other ways to trade like the Traders who shoot for 40 pips per trade, but without all the risk

15 LESSON OF FOREX

2007-11-28T02:50:00.000-08:00

LESSON #15:
Discipline, Mental Skills and the Psychology of Trading.

There is a common belief that only 10% of people who set out to become traders actually achieve their initial desire for consistent high returns over the long haul. Objective data to verify this belief would be extremely difficult to obtain in practical terms. In fact, we haven't seen any hard data on it, but an application of the Pareto Principle: 20% of the traders take 80% of the money seems to confirm the belief.

Then the question arises, "why a few win and most don't?"

First, think about this. Every trader has access to the same tools, the same research, the same charts, the same quotes, the same proven trading methods, etc. So, just like the Real Estate broker who has 20% of his agents bringing in 80% of the income for the office (yep, The Pareto Principle again), why is it that, with everybody having access to the same stuff, only a few make consistent profits over time?

Well, its clear that the common denominator is the PERSON. Yes, YOU!

So, if somebody asked us to list the BIG THREE mental / emmotional characteristics that define the majority of successful FOREX traders, we'd list:

- Discipline & Passion

- Confidence & Courage

- Patience & Persistence

And, yes, being the currency-pair traders that we are, we have to list these attributes together in PAIRS ! Ya wouldn't expect anything different, would ya ? :-)

DISCIPLINE & PASSION:
We realize most people hate hearing the word "discipline" (it conjures up visions of either a Marine Drill Sergeant or a well-meaning Basketball Coach, doesn't it?). As Jack Schwager points out in his second famous book, 'The New Market Wizards', "Discipline was probably the most frequent word used by the exceptional traders that I interviewed. Often it was mentioned in an almost apologetic tone: 'I know you've heard this a million times before, but believe me, it's really important'."

So why is this mental skillset so very, very important to get a hold of?

Well, because proper trading discipline basically goes against human nature. We all want to be right. We all want to hang on to something that didn't work out for us...to vindicate our beliefs and our ego, and when we ARE "right", and a position goes our way, we want to get out of it -- to make sure we stay right, to hold onto our power, our pride, and our security.

In short, Discipline allows you to more effectively plan your work (trades) and work (trade) your plan. NOTE: always be sure that you have a plan in place BEFORE you start to trade. The plan must include stop and limit levels for the trade, as your analysis should encompass the expected downside as well as the expected upside.

"Okay guys," you say, "I understand the whole Discipline thing ... but passion? What's that all about?"

Well, in short, how can you be naturally successful at something, continue to fine-tune your trading skills (be willing to purchase courses, like ours, from experienced traders who can get you up and running quicker than if you didn't have our info.), and stomach the ups and downs of the business if you don't know WHY you're doing it? As Michael Jordan once said, "If you have a love for the game, your talent will eventually catch up to you."

But, don't mistake the "passion" for what you do - or will be doing - as a career Currency Trader for the "emotion" that will be generated when trying to pick a trade without using entry/exit indicators/rules. The former feeling is good. The latter bad. As some traders say, "What feels good is often the wrong thing to do." So, with the business of currency trading, have fun, learn, grow / develop and love what you do but, when it comes to actually getting in and out of a trade, remain as emotionally indifferent as possible! If you do Rapidforex, you'll go far!

>>> To sum-up this Mental skillset PAIR (Discipline / Passion): You must be disciplined AND remain emotionally detached from the market.

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CONFIDENCE & COURAGE:
On of the basic traits of successful traders is that they believe in themselves first. They have the confidence and courage to stick with their plan, not stray from their rules, go against the crowd if need be, and see the end result (the Big Picture) in their mind.

As one of the wealthiest traders in the country said on a conference call once:

"Your perception is your reality folks. You see, it's what you EXPECT in your life to happen *for you* or to you. Well, get rid of the 'to you' crap so it will start happening for you."

Or, to say it another way:

"What you hold in your mind with energy and focus will tend to be created in your reality." -- from the book, Spiritual Marketing

***** Interesting Story *****

Joe Girard was once asked how he sells more automobiles than anyone else in the world. His reply: "I simply sell the world's best product, that's all. I sell Joe Girard!"

Joe's objective was to make every customer *want to* do business with him. He obviously did a good job at it. For eleven consecutive years, he sold more automobiles and trucks than any other retail automotive salesman anywhere.

WOW ... But, here's the rub ...

They were ALL Chevrolets - certainly a good make representing a good value - but certainly not a product that couldn't be purchased somewhere else.

Bottomline. Joe certainly had a good product line that he believed in; however, his posture and attitude towards himself and his ability to be liked is really what won over each customer.

An Ultimate TRUTH: you will never convince anybody (including your opponents in the market) to believe in you until you FIRST believe in YOU. Think about it. Twice if you have too.

So, how does ALL this apply to ensuring success in the FOREX market?

It's this: when focusing your search for commonalities in the market don't forget to look for what every successful TRADER has in common. From the book, 'Poker, Sex and Dying': "Poker is an explosive game combining money, ego, and emmotions. It is not enough to know, have information, and insight regarding your opponent (the markets), you must know of yourself."

We can't begin to tell you how many times, in the beginning, that we faced a situation where we "knew" exactly where a currency pair was going, had a trading plan, but failed to follow it. Of course, greed, fear, and our other emotions stood in our way. When you let this happen to you...all your knowledge, planning and information quickly becomes useless.

In other words, no matter how good you are at analyzing the market, if you don't have confidence, all you're really doing is repeatedly creating experiences to which you will respond with similar frustration and anxiety.

How do you achieve confidence? You gather knowledge, practice discipline, and grow as a person. The more you learn about the markets, your approach to trading the markets and, more importantly, yourself...the more effective you become as a trader. The more effective you become, the less fearful you are. Confidence is the lack of fear. That's it. Lack of fear. When you are confident, you can win.

Ask yourself:

- How do you handle your emotions? Is there a process? - What is your perception of the world? How did you arrive there? Is it accurate? - Are you able to have the same emotion whether you win or lose? - Do past mistakes make you hesitant to pull the trigger today? - Do you have the belief system of a winner or loser? - Do think in terms of probabilities? - Is the way you attach meaning to things too wrapped up in personal emotion?

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PATIENCE & PERSISTENCE:
In this day and age of instant gratification and vicariousness, people want thrills without risks, wine without alcohol, more money without effort, beer without calories and, yes, a profitable currency trade as soon as they can get it.

Look, if we could give you one QUICK piece of advice, in regards to this necessary mental skillset, it's this: The market knows better than you and I when the time is ripe. Don't rush it.

The successful trader realizes that patience pays! Every successful trader has a special talent for 'watching and waiting' and waits until trading behavior has dictated when to enter the market. The prudent FOREX trader specifically applies patience to his/her advantage by:

- Listening To The Market

The market is continually donating valuable trading information, and you must get into the proper frame of mind where you are in reality taking your orders from the action of the market itself or the signals your trading system is sending you. Your judgment will become poorer from the very time that you decide you know more about the market than the market itself is telling you, and you throw patience aside and give in to fear or hope.

- Sitting On The Sidelines While Waiting For a Trend to Develop

It has often been said that looking at one's screen during the trading day is like sitting in front of a slot machine and trying to resist gambling. It's hard. Just as the one armed bandit tempts recreational gamblers, the constant stream of quotes on a computer screen tempt seasoned and novice traders alike to make hasty trading decisions.

Successful traders in the FOREX have learned that they cannot buck the major price trend of the individual currency-pair they are trading. Or, even if you're not a long-term or position/swing trader, but daytrade like we usually do, you still don't want to let impatience cause you to trade against the short-term trend -- buy on a micro- downtrend or sell on a micro-uptrend.

The successful FOREX trader will enter his/her trades in the direction of the prevailing trend or wait until a new trend is established. Several hours, or perhaps days/weeks, may elapse before this trend becomes apparent.

While patience is important not only in waiting for the right trades, it's also important in staying with the trades that are working. Although trades are held for much shorter windows, as a daytrader you must know how to wait patiently for the optimal time to sell. Selling a winner too early is not going to allow your account balance to increase exponentially at an ideal rate. So, this is where a the 'persistence' mental factor comes in as well. You can be 'patient' until the cows come home but if you don't persistently control your impulses and don't persistently follow your exit rules, then your profits won't balance out losses overt time. As a famous trader (William Eckhardt) once said, "while amateurs go broke by taking large losses, professionals go broke by taking small profits."

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"Be patient with winning trades; be enormously impatient with losing trades. Remember, it is quite possible to make large sums trading/investing if we are "right" only 30% of the time, as long as our losses are small and our profits are large."

- Dennis Gartman

45 WAYS TO AVOID LOSING MONEY ON FOREX

2007-11-28T02:44:00.002-08:00

1. Knowledge Deficiency – Most new FOREX traders don’t take the time to learn what drives currency rates (primarily fundamentals). When news or a statement is due out they must close out their positions and sit out the best trading opportunities. They are taught to only trade after the market calms down. So essentially they miss the whole move and then trade the random noise that follows a fundamental price move. Just think for a moment about technically trading the aftermath of a price move; there is no potential.

2. Overtrading - Trading often with tight stops and tiny profit targets will only make the broker rich. The desire to “just” make a few hundred dollars a day by locking in tiny profits whenever possible is a losing strategy.

3. Over leveraged - Leverage is a two way street. The brokers want you to use high leverage because that means more spread income because your position size determines the amount of spread income; the bigger the position the more spread income the broker earns.

4. Relying on Others – Real traders play a lone hand; they make their own decisions and don’t rely on others to make their trading decisions for them; there is no halfway; either trade for yourself or have someone else trade for you.

5. Stop Losses – Putting tight stop losses with retail brokers is a recipe for disaster. When you put on a trade commit to a reasonable stop loss limit that allows your trade a fair chance to develop.

6. Demo Accounts – Broker demo accounts are a shill game of sorts; they’re not as time sensitive as real accounts and therefore give the impression that time sensitive trading systems, such as short-term moving average crossovers can be consistently profitably traded; once you start dealing with real money reality is quick to set in.

7. Trading During Off Hours – Bank FX traders, option traders, and hedge funds have a huge advantage during off hours; they can push the currencies around when no volume is going through and the end game is new traders get fleeced trying to trade signals. There is only one signal during off hours – stay out.

8. Trading a Currency, Not a Pair – Being right about a currency is half a trade; success or failure depends upon being right about the second currency that makes up the pair.

9. No Trading Plan - Make money is not a trading plan. A trading plan is a blueprint for trading success; it spells out what you see your edge as being; if you don’t have an edge, you don’t have a plan, and likely you’ll wind up a statistic (part of the 95% of new traders that lose and quit).

10. Trading Against Prevailing Trend – There is a huge difference between buying cheaply on the way down and buying cheaply. What was a low price quickly becomes a high price when you’re trading against the trend.

11. Exiting Trades Poorly – If you put on a trade and it’s not working make sure you exit properly; don’t compound the damage. If you’re in a winning trade don’t talk yourself out of the position because you’re bored or want to relieve stress; stress is a natural part of trading; get use to it.

12. Trading Too Short-term – If you’re profit target is less than 10 points don’t do the trade; the spread you pay to enter the trade makes the odds way against you when you go for these tiny profits.

13. Picking Tops and Bottoms - Looking for bargains works well at the supermarket but not trading foreign exchange; try to trade in the direction the price is going and you’re results will improve.

14. Being Too Smart – The most successful traders I know are high school graduates. They keep it simple and don’t look beyond the obvious; their results are excellent.

15. Not Trading Around News Time – Most of the big moves occur around news time. The volume is high and the moves are real; there is no better time to trade fundamentally or technically than when news is released; this is when the real money adjusts their positions and as a result the prices changes reflect serious currency flow (compared to quiet times when Bank traders rule the market with their customer order flow.

16. Ignore Technical Condition – Determining whether the market is over-extended long or over-extended short is a key determinant of near time price action. Spike moves often occur when the market is all one way.

17. Emotional Trading – When you don’t pre-plan you’re trades essentially it’s a thought and not an idea; thoughts are emotions and a very poor basis for doing trades. Do people generally say intelligent things when they are upset and emotional; I don’t think so.

18. Lack of Confidence – Confidence only comes from successful trading. If you lose money early in your trading career it’s very difficult to gain true confidence; the trick is don’t go off half-cocked; learn the business before you trade.

19. Lack of Courage to Take a Loss – There is nothing macho or gutsy about riding a loss, just stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Getting married to a bad position ruins lots of traders. The thing to remember is the market does crazy things often so don’t get married to any one trade; it’s just a trade. One good trade will not make you a trading success; rather it’s monthly and annual performance that defines a good trader.

20. Not Focusing on the Trade at Hand – There is no room for fantasizing in successful trading. Counting up and mentally spending profits you haven’t made yet is mental masturbation and does you no good. Same with worrying about a loss that hasn’t happened yet. Focus on your position and have a reasonable stop loss in place at the time you do the trade. Then be like an astronaut – sit back and enjoy the ride; no sense worrying because you have no real control; the market will do what it wants to do.

21. Interpreting FOREX News Incorrectly – Fact is the press only has a very superficial understanding of the news they are reporting and tend to focus on one element and miss the point. Learn to read the source documents and understand it for real.

22. Lucky or Good – Your account balance changes don’t tell you the whole story about your trading; fact is if your taking a lot of risk and making money you will eventually crash and burn. Look at the individual trade details; focus on your big loses and losing streaks. Ask yourself this; if I had a couple of consecutive losing streaks or a couple of consecutive big loses, how would my account balance look. Generally, traders making money without big daily loses have the best chance of sustaining positive performance. The others are accidents waiting to happen.

23. Too Many Charity Trades – When you make money on a well thought out trade don’t give back half on a whim; invest your profits from good trades on the next good trade.

24. Courage Under Fire – When a policeman breaks down the door to a drug dealers apartment he is scared but he does it anyway. When a fireman climbs onto the roof of a burning building he is scared but does it anyway; and gets the job done. Same with trading; it’s ok to be scared but you have to pull the trigger; no trigger – no trades – no profits – no trader.

25. Quality Trading Time – I suggest 3 hours a day of quality, focused trading time; that’s about all your brain allows. When your trading being 100% focused; half way is bullshit’ it doesn’t work. Don’t even think that time spent in front of the computer watching the rates has any correlation to profitability; it doesn’t. Spend less time but when your trading be 100% focused on trading.

26. Rationalizing – Killer. Absolute Killer. Put your trade on and let it run. If it hits your reasonable pre-determined stop your out. Think of yourself as a prizefighter; you just got knocked out. Moving your stop is like getting up after being crushed with a knockout blow; it’s pointless; things will only get worse. Don’t ignore the obvious; your wrong – get out. Come back the next day and try again. A small loss will not hurt you; a catastrophic loss will.

27. Mixing Apples and Oranges – Have you ever done this; you see the EURUSD trading higher so you buy GBPUSD because it “hasn’t moved yet”. That’s a mistake. Most of the time the reason the GBPUSD hasn’t moved yet is because its already overbought or some 4:30am UK news was bearish. Don’t mix apples and oranges; if EURUSD looks bid buy EURUSD.

28. Avoiding the Hard Trades – Bank FX traders have an axiom; the harder the trade is to do the better the trade. This I learned from experience; when I needed to buy EURUSD and it was hard to get them that’s when it’s necessary to pay up and get the business done. When it’s easy to get them then sit back and wait for better levels. So if your trying to get into a trade or more importantly get out of a trade don’t putz around for a few points; get your business done.

29. Too Much Detail – If your trading more than 2 indicators then you need to clean house. Having many indicators stifles trading and finds reasons not to trade. A setup and a trigger is all you need.

30. Giving Up Too Easy – Your first trade of the day may not be your best but certainly it’s no reason to quit. I have a preset daily trading limit and I use it; you can’t make money by making excuses; getting trades wrong is natural and should be expected.

31. Jumping the Gun – Don’t be penny wise and dollar foolish; wait for your trade signal to be clear; put on your trade and give it a decent size stop loss so that you don’t get knocked out by random noise. Do trades don’t’ buy lottery tickets (extremely tight stops).

32. Afraid to Take a Loss - trading is not personal; it’s business. Don’t think that a poor trade is a reflection on you. It could be your just ahead of your time or a commercial order hits the market and temporarily creates a small unexpected move. Again, place your stop beforehand and NEVER increase your pre-determined risk; if it’s going bad it will probably get worse; I think that’s Einstein “in motion stays in motion…”

33. Over-Relying on Risk Reward – There is zero advantage in risk reward; if you put a 20 point stop and a 60 point profit your chances are probably 3-1 that you will lose; actually with the spread its more like 4 to 1 (from entry point if it goes down 17 points you lose or up 63 you win; 17/63 is close to 4-1).

34. Trading for Wrong Reasons – Because the EURUSD is going up is not in itself a reason to buy. Buying EURUSD because its not moving so little risk is even worse; you’re paying the toll (spread) without even a hint that you will get a directional move. If your bored don’t trade; the reason your bored is there is no trade to do in the first place.

35. Rumors – Rumors are rumors almost 100% of the time; think about where in the motion you heard the rumor; if EURUSD is up 50 points in last 15 minutes and the rumor is dollar negative, well then you missed it. Whenever you trades determine where in the motion you are entering.

36. Trading Short-term Moving Average Crossovers – This is the money sucker of the century. When the shorter term moving average cross the longer term moving average it only means that the average price in the short run is equal to the average price in the longer run. For the life of me I cannot understand why this is bullish or bearish. Easy to set up on software, complete with lights, bells and whistles, and good for the seller getting thousands for the software but in terms of creating profit it’s a zero.

37. Stochastic – Another money sucker. Personally I think this indicator is used backwards; when it first signals an overdone condition that’s when I think the big spike in the “overdone” currency pair occurs. To be overbought means strong and oversold means weak. Try buying on the first sign of overbought and selling on the first sign of oversold; you’ll be with the trend and likely have identified a move with plenty of juice left. So if %k and %d are both crossing 80; buy! (Same on sell side; sell at 20)

38. Wrong Broker – A lot of FOREX brokers are horrible; get a good one. Read forums and chats in several different places to get an unbiased opinion.

39. Simulated Results – Watch out for “black box” systems; these are trading systems that don’t divulge how the trade signals are generated. Great majority of them are absolute garbage. They show you a track record of extraordinary results but think about it; if you could build a trading system with half a dozen filters using the benefit of hindsight, couldn’t you too come up with a great system. Of course going forward is an entirely different story. High-speed number crunching capabilities allows for building great hindsight trading systems; BEWARE.

40. Inconsistency – Every business (FOREX trading included) requires a business plan (trading plan). Unless you have taken the time to write down a set of rules that you can and will follow, it’s likely your trading will remain unfocused and directionless. Make a plan, have rules, follow them set goals that are realistic and you will achieve them.
41. Master of None – Focus on one currency for technical trading; each currency has a unique way of trading and unless you get intimate with it you will never truly understand its underlying idiosyncrasies. Don’t spread yourself too thin – focus – master one currency at a time.

42. Thinking Long Term – Don’t do it. Stay in the moment. Especially if you’re a day trader. It doesn’t matter what happens next week or next month, if your trading with 30 to 50 point stops restrict your thought process to what’s happening right now. That is not to stay the long-term trend is not important; it is to say the long-term trend will not always help you when your trading a significantly shorter time frame.

43. Overconfidence – Trading is not easy; statistics show 95% failure rate. If your doing well don’t take your success for granted; always be on the lookout for ways to improve what you’re doing.

44. Getting Pumped Up – The trick is to maintain an even keel; when you are in a trade you want to think exactly as you would if you didn’t have a trade on. To do this requires a relaxed disposition; this is not a football game; don’t get psyched up; relax and try to enjoy it.

45. Staying in the Game – I don’t recommend demo trading because traders learn bad habits when trading with play money. I also don’t think “letting it all hang out” right away is wise either. Start off doing trades and taking risk that is relatively small but still makes a difference to you if you win or lose; about a quarter to a third of what you expect to reach as your trading matures is reasonable.

Buying Pullbacks - The Fatal Error Most Traders Make

2007-11-28T02:44:00.001-08:00

You have heard it often buy dips in bull markets and wait for the market to rise but buying dips is not as easy as it first seems and most traders lose.

Let’s look at how to buy them correctly, avoid losing trades and pile up some good profits.

Ask yourself this question

If you see a level of support and prices are moving down towards it – price momentum and the trend is against you.

So why do you want to buy?

Most traders will say support “should” hold, so get in just above at support and you’re in with good risk reward.

No your not – The markets are not as easy as that.

The fact is that levels of support that “should” hold more often than not don’t hold.

Trader gets stopped out as support is taken out.

Doing this in leveraged markets will soon see your equity wiped out.

The better alternative

Is to look at price momentum and get confirmation that the support level HAS held and prices are moving up again after TESTING support.

You’re not predicting – you’re acting on CONFIRMATION and trading with the trend.

The Best Indicator

The way do this is top use an indicator that measures price momentum and near term strength and the stochastic is ideal and is explained in our other articles.

The way to do this is watch the market move to support and wait for the price momentum to reverse.

This is done by watching for a cross in the stochastic lines with bullish divergence – then you trade.

This way you have higher odds that the support has held and the chances of prices resuming the up trend are greater.

This effectively puts you in with price momentum after a test of pullback support.

Be a savvy trader

If you buy pullbacks this is the way you are getting the odds in your favor and that’s what trading is all about.

The professional traders are not interested in being clever or predicting - they want to trade with price momentum and the trend and get high odds trades and this way will ensure you do to.

There’s an old saying:

“A bottom picker becomes a cotton picker”

So don’t predict get confirmation.

You will then find not only does this method keep you out of a lot of losing trades but will also create some high odds trades and make some great profits to.

Is Forex Too Good To Be True?

2007-11-28T02:43:00.001-08:00

The foreign exchange market accounts for about 1.8 trillion dollars in trading a day. Only individual investors do a very small part of this. Banks, Corporations and Governments do most of the trading. The retail Forex market, a market aimed at the individual investor, has only been around since the mid 1990s. This article will look at the retail forex market, as well as describe the risks that individual investors may face in the forex market.

Forex currencies are traded in pairs; one currency is contrasted with another. For example, the British pound and the American dollar. The stronger currency at the time goes first in the listing scheme. In this case it would listed as GBP/USD. When you invest in this particular pair, you would be anticipating that either the British pound would become stronger than the U.S. dollar and go up, or the alternative; that the GBP would become weaker than the USD and go down.

Risk and your particular risk tolerance are both factors to consider when deciding to enter the forex market. The risk in forex arises from two sources. The first is that as in any other market, no one knows what will happen in the future.

The two major approaches to predicting the possible moves of the forex market are Fundamental and Technical analysis. Fundamental analysis is based on issues like the state of a country's economy, it's government fiscal policy and it's political stability. Technical analysis is based on past movement of the market and the likely hood of those movements repeating themselves.

The second source of risk in the forex market is the availability of leverage to a degree that is not seen in any other markets. Although leverage of 1:100 or 1:200 is normal, there are brokers offering 1:400 leverage. With this kind of leverage, sizable profits are possible if you predict the market's movements correctly and large losses if you're wrong.

What your broker will likely do is to allow you to risk only part of your account. Stops will be placed in the opposing direction to the direction that you expect the currency to go in, at the point where your account will cover the losses if the market goes the other way. This way if you're wrong, your gamble will be covered by your account. Of course it will probably use up your entire account.

Some people might advise taking positions going in both directions, however this undermines the idea of trying to learn to predict the likely moves of the market. Furthermore, if the forex market swings up and then down, one position may not necessarily cancel out the other. Your account may be wiped out anyway. Generally speaking, the more positions you take, the greater the risk.

So how do you manage risk in forex trading? Some advisors suggest setting stops in the opposite direction that you're betting the market will go in. These stops will hopefully close out your trade before the market wipes out your entire account. Stops can also be used to capture and hold profits if the market is going up and down again, assuming that you've chosen up as your prediction. Other advisors add the caution that placing stops too close can limit profits when the market does go strongly in the direction you want it to go in.

Another way of managing risk is to risk money that you can afford to lose. If you're using your rent money, then don't invest in forex. Yet another useful concept is money management. Money management is based on the idea that you will lose sometimes and if you control the amount that you invest in each position, you will be able to weather the storm of losses. To make money management work, both fear and greed need to be kept in check.

For the individual whose temperament will allow them to tolerate ups and downs in the market, forex may be a worthwhile opportunity. Just remember to manage your risk and your money. That way, you'll be around to trade long after others have walked away.

Forex Trend Following - The Basics for Making Big Profits

2007-11-28T02:42:00.000-08:00

If you look at any currency charts you will see long term trends that last for months or even years and these can be worth $10 - 20,000 or more.

Many traders pick the direction correctly get stopped out and then see the trend make huge profits and there not in!

So how do you catch and hold these trends? Let’s take a look.

Entering the trend

You see an important level of resistance about to be broken and you want to get in so you buy a break and prices accelerate – Now you’re in profit and looking forward to a much bigger one.

Now it is here that most traders fail to act correctly to hold the trend and it is routed deep in human nature.

Human emotions and trend following

You have a profit and the bigger it gets, the more the temptation is to take it before it gets away.

Most traders know this is wrong they need to hang on to capture a bigger profit but they want to limit risk.

So what do they do?

The Fatal Mistake

They make the fatal error of trailing their stops up quickly and most do it under the first level of resistance - after the trend has broken to the upside.

If you want to catch the big trends you cannot do this as you will simply get stopped out.

90% of traders lose money in forex trend following and this is due to the fact they try to restrict risk so much they never make any meaningful profits.

By trying to restrict risk they actually create it.

In the brutal world of currency trading volatility is the enemy unless you handle it correctly and even in the best trends you will see huge swings within the trend.

Trail your stop to close and volatility will take you out.

Risk

If you want to catch big trends you have to take a calculated risk.

This means holding your original stop and letting the trend go WITHOUT trailing your stop to close.

Sure, you are going to see periods where dips eat into your open equity by thousands of dollars, but if you believe you are in a big trend, you need to leave the market room to breathe.

If you don’t do this, you will NEVER hold the really big trends that can pile up huge profits.

Get used to taking dips in open equity when forex trend following and keep your eye on the bigger picture.

Forex trend following over several weeks or months holding a big trending move is mentally tough, but do it and you will catch some stunning profits.

Forex Trading - Tips On Buying Courses & Systems

2007-11-28T02:41:00.000-08:00

Many traders are daunted by the thought of forex trading so they decide to get help from an expert mentor or guru.

Let’s look at some tips on how to choose one.

Firstly, the vast majority of advice sold on the net is either available free anyway, or simply does not work.

Think about it:

If you do trades with 70% accuracy, you would be to busy trading your way to millionaire status than bothering to crow about how good you are on the net, for $100 or so.

The Day trading myth

You have seen them guys promising you 10 – 100 pips a day in profit, or systems that are so accurate and consistent they can’t possibly be true.

Day trading is where the bulk of the courses are sold.

The myth is you can make money consistently and long term – Absolute rubbish.

Day trading is done in short time spans and all short term moves are random, so kiss goodbye to your equity.

Ask for a track record and see if you get one.

I never have! And by track record I mean a real not hypothetical one.

And don't fall for the testimonial from a friend, or guy with lucky trade.

The More Expensive advice is the better it is.

Some advice costs a lot more than $100 or so, you can pay thousands for it.

The novice trader thinks it must be good as its expensive - not so.

Judge A vendor simply by if they have made money – that’s the only criteria that counts.

Then decide if you understand the logic (if you don’t you wont be able to follow it with discipline) and without discipline you have no method in the first place.

Really want to succeed?

Go to your local bookstore and pick up some classic trading books, by traders who have walked the walk rather than are all talk.

Get these three great books

Market Wizards & The New Market Wizards – Jack Schwager

These are interviews with some of the top traders of all time and are great insight into what makes a great trader.

Trader Vic – Vic Sperandeo

This is a fantastic book - giving you everything you need to help you trade from money management to ideas on systems.

The above will cost you around $50.00 and will be money well spent.

There are other books but these are my favorites.

And if you read them:

They make clear that for success you rely on yourself and no one else.

Devise your own system (we have done loads of articles on this ) keep it simple, trade with discipline, show patience and perseverance and you can make it all on your own.

If you must buy advice get a track record and find one you understand and have confidence in but the best way to make money ( or the only way) is to do it on your own.

Forex Trading – Getting In On Long Term Trends a Live Example

2007-11-28T02:40:00.000-08:00

When a trend has started how do you get in? There are always plenty of opportunities as trends can last for months or years.

Here we will outline a simple method on a live example.

Let’s look at it

If you read our recent article you will know that we wanted to get into US Dollar and Canadian Dollar and this set up has just come to fruition.

Here it is:

You can see it on any many chart services but the one we are using here is futuresource.com and were writing this on 06 03 PM CET.

Pull up the weekly chart and you will see the long term trend in US Dollar is down and you want to be in on the longer term trend

Now pull up the daily chart.

You will see the US Dollar is having a counter trend rally.

Last week we said that resistance and nearby highs would probably hold.

Check out the strong resistance and the top of the Bollinger band.

This is the line the US Dollar had to cross and it hasn’t and is faltering just below this level.

Get Confirmation

Rather than just jump in and trade, we look for a test and a fall off in near term price momentum.

If you want to time trade entries the stochastic momentum indicator is simply one of the best timing tools you will find.

It measures short term velocity of price and is a great timing tool and confirms weakening momentum.

The key here is to watch resistance and then wait for prices momentum to the upside to stall.

All you do is simply watch for the stochastic lines to cross and point downwards with bearish divergence which has just occurred.

It really is that simple.

Identify strong resistance look for a strong rally into it and WAIT for confirmation of weakening of momentum. Don’t jump too soon

The real key is to get confirmation of weakening momentum in the counter trend rally and that’s where the stochastic is so useful.

Many traders simply jump in near resistance and expect it to hold but this means you reduce the odds of being successful and support and resistance levels are broken all the time.

Right or wrong

This is a trade with low risk and good rewards and you can run it or simply wait for a quick blast to the middle of the Bollinger band.

Learn Forex Trading - The 4 Fundamentals Of A Good Trading Market

2007-11-28T02:39:00.002-08:00

Whether you are trading stocks, bonds, futures, foreign exchange or just about anything else you care to mention the conditions that make a market suitable as a trading ground for the investor remain the same. In essence, there are four characteristics which are always present in a good investment market - liquidity, transparency, low trading costs and the existence of trends in the market.

Liquidity

All trading consists of two elements, a purchase and a sale, and liquidity in its simplest form refers to the ease with which traders can buy and sell. I say 'in its simplest form' because for a market to be truly liquid traders must also be able to buy and sell in substantial volume without any marked effect on prices.

The problem with a market that is not liquid is that traders will often find that there are delays in filling orders to buy, resulting in often substantial differences between the price at the time the order is placed and when it is actually executed. In addition, it can often be difficult to sell in a market that lacks liquidity.

The Forex market is an extremely liquid market with a huge number of trades being conducted daily and with a trading volume that is second to none.

Transparency

The transparency of a market is best defined as the ability of traders to access accurate information at all stages of the trading process.

Information is the key to most things in life and this is certainly true in many of the world markets. Indeed there are many examples, especially across the world stock markets, of companies and individuals running into difficulty because all of the parties involved in a trade did not have access to accurate information, or were given inaccurate information.

The Forex market is without doubt the most transparent of all of the world trading markets and this is especially true when it comes to pricing.

Low Trading Costs

All markets carry trading costs and the higher these costs the lower the trader's profit or the greater his loss. Any market therefore that can keep its trading costs low will be attractive to traders and will encourage greater trading volume.

The lack of commission and similar trading costs and the tight spread of prices in foreign exchange trading mean that trading costs in the Forex market are kept very low compared to other markets.

Trends in the market

One of the most difficult things in many markets is knowing just when to enter the market, or buy, and when to exit the market, or sell. For this reason it is important to have some mechanism which traders can use to assess the current state of the market and to predict its future course.

In the case of the Forex market this essentially means employing various different forms of technical analysis which rely on studying the past performance of the market and identifying trends which can then be used to predict the future.

Most markets will display some form of trend, but some markets have far more clearly defined and marked trends than others, making it far easier for traders to enter and exit trading positions. Fortunately, the Forex market is one market with a particularly strong trending characteristic.

LEARN FOREX TRADING - A GUIDE FOR BEGINNERS

2007-11-28T02:39:00.001-08:00

One can learn forex trading as easily as one would like to learn other subjects or train in other professions. The criteria for learning forex trading is an analytical / logical bent of mind and some number crunching abilities. Reading specialized books on the subject matter, enrolling for college and other programs, which specifically teach one to do forex dealing, one can understand Forex trading. Still other ways are through the Internet and training under a forex dealer / professional. Essentially the forex market comprises of currencies, which are bought and sold according to certain parameters.

There are major currencies in the market, which are trade and are the most liquid. These are US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. Then there are other currencies, which are not so liquid. However currency trade is done in almost all currencies across the world. The forex market is truly a twenty-four market with only a minor break during the weekend. It opens in Sydney, then in Tokyo and then in London and New York in that order according to the way that the Earth rotates and the sun rises. Therefore forex brokers and investors can choose their time of operation.

Essentially it's a matter of selling and buying the currencies. The goal is very simple, that of making a profit in the currency transactions that you participate in. The currency market operates like most other markets and therefore for many traders 'migrating ' form other trades such as stock market can be quite simple.

Essentially one can learn forex transactions by creating a virtual account. The first lesson is that currency trade is done in pairs only like Euros / US$, Japanese Yen/ Canadian Dollars etc. When you have set up a virtual account with the amount of initial investment, keep the following pointers in mind

· According to your investment strategy and time frame, choose the currency pair best suited to your needs. Some currency pairs can be very aggressive and the changes can be quite volatile. While others may not show any movement. Therefore choose the currency pair with care.

· Decide the time frame. Do you want to spend a few minutes on the forex trade or you want to go the whole hog and devote the entire week to the forex trade (swing trade)

· Have an exit plan ready before you start the currency transactions. Know when to place your 'stops' and do so accordingly.

· No risk no gain. Be willing to take risk. You can take calculated risks in order to earn good profits. Know whether you want to be an aggressive trader or are you happy being a safe trader.

· Read and analyze the news and the technical data that is generated on the currencies that you deal in to understand the market conditions better.

Of course you can grasp the modus operandi of the forex trade. But for doing the real thing, you need to be in the forex transaction market for real.

6 CRITICAL FACTORS FOR SUCCESSFUL TRADING

2007-11-28T02:38:00.001-08:00

Success in any profession can be broken down into a number of critical factors. Trading is no different. Does your trading tick all 6 boxes or are there any areas you need to work on:

1. Do you have an edge? Trading futures is a zero sum game - you must have an identifiable edge over the other market participants. Have you identified a high probability pattern that can be exploited time after time? Remember though, the only constant in trading is change - you will have to constantly evolve your trading edge to stay ahead of the crowd.

2. Disciplined Execution. There is no point in identifying an edge if you can't execute the trade. Measure your trading success against your trading plan not the actual outcome of the trade. If you make a loss but you executed your trade exactly according to your plan than pat yourself on the back, don't beat yourself up over it.

3. Money Management. If your risk per trade is too aggressive then you run too high a risk of blowing your account, too conservative and you will not optimize returns from your system. It is essential to establish the maximum expected draw down of any system and set money management rules accordingly.

4. Have a Trading Plan. A trading plan will dictate what you will do in any given situation during the trading day. When the market is open you do not want to have to think - just concentrate on executing your plan. When the market is closed you need to be preparing for the next session to ensure you have a clear plan prepared.

5. Accountability. You are responsible for every trade. Ultimately the decision to put on a trade is yours. If your stop is hit and the market immediately reverses then you are responsible, not the 'big boys' gunning for stops - it happens, move on. If you get huge slippage on your trades then does your trading plan account for it or is your plan unrealistic for the market you are trading?

6. Commitment. Trading is not like a regular job, you don't pick up a pay check at the end of the month even though you did no work and spent the whole month surfing the web and emailing your friends. You must be committed to placing every trade according to your plan, even through the losing periods where every trade seems to end up a loser. Trading seems to throw up extremes of good times and bad times, you must not get over confident during the good times and you must not give up in the bad times - remember it is all part of the plan. You must set aside adequate time every day to compare your actual performance against your trading plan. You must be committed to continuous testing of new ideas and regular monitoring of your existing plan. Research into future ideas is essential - remember the only constant in trading is change.

FOREX TRADING ONLINE - 7 REASONS WHY YOU SHOULD!

2007-11-28T02:37:00.001-08:00

Forex trading online is a fast way to use your investment capital to it's fullest. The Forex markets offer distinct advantages to the small and large traders alike, making Forex currency trading in many ways preferable to other markets such as stocks, options or traditional futures. Here are seven reasons why you'll want to look into Forex Trading online.

1 - Forex is the largest market.

Forex trading volume of more than 1.9 billion, more than 3 times larger than the equities market and more than 5 times bigger than futures, give Forex traders nearly unlimited liquidity and flexibility.

2 - Forex never sleeps!

You can execute forex trading online 24/7, from 7AM New Zealand time on Monday morning, to 5PM New York time on Friday evening. No waiting for markets to open: they're open all night! This makes Forex trading online a very attractive component that fits easily into your day (or night!)

3 - No Bulls or Bears!

Because Forex trading online involves the buying of one currency while simultaneously selling another, you have an equal opportunity for profit no matter which direction the currency is headed. Another advantage is that there are only around 14 pairs of currencies to trade, as opposed to many thousands of stocks, options and futures.

4 - Forex Trading online offers great leverage!

You can make the most of your investment resources with Forex trading online. Some brokers offer 200:1 margin ratios in your trading accounts. Mini-FX accounts, which can typically be opened with only $200-300, offer 0.5% margin, meaning that $50 in trading capital can control a 10,000 unit currency position. This is why people are flocking to Forex trading online as a way to highly leverage their investments.

5 - Forex prices are predictable.

Currency prices, though volatile, tend to create and follow trends, allowing the technically trained Forex trader to spot and take advantage of many entry and exit points.

6 - Forex trading online is commission free!

That's right! No commissions, no exchange fees or any other hidden fees. This is a very transparent market, and you'll find it very easy to research the currencies and the countries involved. Forex brokers make a small percentage of the bid/ask spread, and that's it. No longer any need to compute commissions and fees when executing a trade.

7 - Forex trading online is instant!

The FX market is astoundingly fast! Your orders are executed, filled and confirmed usually within 1-2 seconds. Since this is all done electronically with no humans involved, there is little to slow it down!

Forex trading online can get you where you want to go quicker and more profitably than any other form of trading. Check it out and see what Forex trading online can do for you!

Avoiding mistakes in forex trading

2007-11-28T02:36:00.001-08:00

By Abe Cofnas
Adifficult challenge facing a trader, and particularly those trading e-forex, is finding perspective. Achieving that in markets with regular hours is hard enough, but with forex, where prices are moving 24 hours a day, seven days a week, it is exceptionally laborious. When inundated with constantly shifting market information, it is hard to separate yourself from the action and avoid personal responses to the market. The market doesn’t care about your feelings. Traders have heard it in many different ways — the only thing you can control is when you buy and when you sell. In response to that, it is easier to know how not to trade then how to trade. Along those lines, here are some tips on avoiding common pitfalls when trading forex.

1) Don’t read the news — analyze the news.

Many times, seemingly straightforward news releases from government agencies are really public relation vehicles to advance a particular point of view or policy. Such “news,” in the forex markets more than any other, is used as a tool to affect the investment psychology of the crowd. Such media manipulation is not inherently a negative. Governments and traders try to do that all the time. The new forex trader must realize that it is important to read the news to assess the message behind the drums.
For example, Japan’s Prime Minister Masajuro Shiokowa was quoted in a news report on Dec. 13 that “an excessive depreciation of the yen should be avoided. But we should make efforts and give consideration to guide the yen lower if it is relatively overvalued.” When a government official is asking, in effect, if traders would please slow down the weakening of his currency, then we must wonder whether there is fear the opposite will happen. In this case, that was the outcome as on Dec. 14 the dollar vs. the yen surged to a three-year high. The Prime Minister’s statement acted as a contrarian indicator. This is what “fade the news” means. Often, a bank analyst or trader will be quoted with a public statement on a bank forecast of a currency’s move.When this occurs, they are signaling they hope it will go that way. Why put your reputation on the line, saying the currency is going to break out, if you don’t benefit by that move? A cynical position, yes, but traders in the forex markets always need to be on guard. Read the news with the perspective that, in forex, how the event is reported can be as important as the event itself.

2) Don’t trade surges.

A price surge is a signature of panic or surprise. In these events, professional traders take cover and see what happens. The retail trader also should let the market digest such shocks. Trading during an announcement or right before, or amid some turmoil, minimizes the odds of predicting the probable direction. Technical indicators during surge periods will be distorted. You should wait for a confirmation of the new direction and remember that price action will tend to revert to pre-surge ranges providing nothing fundamental has occurred. An example is the Nov. 12 crash of the airplane in Queens, N.Y. Instantly, all currencies reacted. But within a short period of time, the surge that reflected the tendency to panic retraced.

3) Simple is better.

The desire to achieve great gains in forex trading can drive us to keep adding indicators in a never-ending quest for the impossible dream. Similarly, trading with a dozen indicators is not necessary. Many indicators just add redundant information. Indicators should be used that give clues to:
1) trend direction, 2) resistance, 3) support and 4 ) buying and selling pressure. One tool helpful with all of these factors is the point-and-figure chart (see “Getting the point”). Point-and-figure charts are one of the earliest forms of technical analysis. Now, with technology, they are easier for traders to use than ever before. While point-andfigure analysis is available on several stand-alone programs, most online platforms do not offer these charts. A few that do are www.quotespeed. com, www.chartanalytics.com and www.dorseywright.com.

Forex Money Management

2007-11-28T02:35:00.000-08:00

Written by FX Master

Money management is a critical point that shows difference between winners and losers. It was proved that if 100 traders start trading using a system with 60% winning odds, only 5 traders will be in profit at the end of the year. In spite of the 60% winning odds 95% of traders will lose because of their poor money management. Money management is the most significant part of any trading system. Most of traders don't understand how important it is.
It's important to understand the concept of money management and understand the difference between it and trading decisions. Money management represents the amount of money you are going to put on one trade and the risk your going to accept for this trade.

There are different money management strategies. They all aim at preserving your balance from high risk exposure.
First of all, you should understand the following term Core equity Core equity = Starting balance - Amount in open positions.

If you have a balance of 10,000$ and you enter a trade with 1,000$ then your core equity is 9,000$. If you enter another 1,000$ trade, your core equity will be 8,000$

It's important to understand what's meant by core equity since your money management will depend on this equity.
We will explain here one model of money management that has proved high annual return and limited risk. The standard account that we will be discussing is 100,000$ account with 20:1 leverage . Anyway, you can adapt this strategy to fit smaller or bigger trading accounts.

Money management strategy
Your risk per a trade should never exceed 3% per trade. It's better to adjust your risk to 1% or 2% We prefer a risk of 1% but if you are confident in your trading system then you can lever your risk up to 3%
1% risk of a 100,000$ account = 1,000$

You should adjust your stop loss so that you never lose more than 1,000$ per a single trade.
If you are a short term trader and you place your stop loss 50 pips below/above your entry point . 50 pips = 1,000$ 1 pips = 20$
The size of your trade should be adjusted so that you risk 20$/pip. With 20:1 leverage, your trade size will be 200,000$
If the trade is stopped, you will lose 1,000$ which is 1% of your balance.
This trade will require 10,000$ = 10% of your balance.
If you are a long term trader and you place your stop loss 200 pips below/above your entry point. 200 pips = 1,000$ 1 pip = 5$

The size of your trade should be adjusted so that you risk 5$/pip. With 20:1 leverage, your trade size will be 50,000$
If the trade is stopped, you will lose 1,000$ which is 1% of your balance.
This trade will require 2,500$ = 2.5% of your balance

This is just an example. Your trading balance and leverage provided by your broker may differ from this formula. The most important is to stick to the 1% risk rule. Never risk too much in one trade. It's a fatal mistake when a trader lose 2 or 3 trades in a row, then he will be confident that his next trade will be winning and he may add more money to this trade. This is how you can blow up your account in a short time! A disciplined trader should never let his emotions and greed control his decisions.

Diversification
Trading one currency pair will generate few entry signals. It would be better to diversify your trades between several currencies. If you have 100,000$ balance and you have open position with 10,000$ then your core equity is 90,000$. If you want to enter a second position then you should calculate 1% risk of your core equity not of your starting balance!. It means that the second trade risk should never be more than 900$. If you want to enter a 3rd position and your core equity is 80,000$ then the risk per 3rd trade should not exceed 800$
It's important that you diversify your orders between currencies that have low correlation.
For example, If you have long EUR/USD then you shouldn't long GBP/USD since they have high correlation. If you have long EUR/USD and GBP/USD positions and risking 3% per trade then your risk is 6% since the trades will tend to end in same direction.

If you want to trade both EUR/USD and GBP/USD and your standard position size from your money management is 10,000$ (1% risk rule) then you can trade 5,000$ EUR/USD and 5,000$ GBP/USD. In this way, you will be risking 0.5% on each position.

The Martingale and anti-martingale strategyIt's very important to understand these 2 strategies.
-Martingale rule = increasing your risk when losing !
This's a startegy adopted by gamblers which claims that you should increase the size of you trades when losing. It's applied in gambling in the following way Bet 10$,if you lose bet 20$,if you lose bet 40$,if you lose bet 80$,if you lose bet 160$..etc

This strategy assumes that after 4 or 5 losing trades, your chance to win is bigger so you should add more money to recover your loss! The truth is that the odds are same in spite of your previous loss! If you have 5 losses in a row ,still your odds for 6th bet 50:50! The same fatal mistake can be made by some novice traders. For example, if a trader started with a a balance of 10,000$ and after 4 losing trades (each is 1,000$) his balance is 6000$. The trader will think that he has higher chances of winning the 5th trade then he will increase the size of his position 4 times to recover his loss. If he lose, his balance will be 2,000$!! He will never recover from 2,000$ to his starting balance 10,000$. A disciplined trader should never use such gambling method unless he wants to lose his money in a short time.
-Anti-martingale rule = increase your risk when winning& decrease your risk when losing
It means that the trader should adjust the size of his positions according to his new gains or losses. Example: Trader A starts with a balance of 10,000$. His standard trade size is 1,000$ After 6 months,his balance is 15,000$. He should adjust his trade size to 1,500$

Trader B starts with 10,000$.His standard trade size is 1,000$ After 6 months his balance is 8,000$. He should adjust his trade size to 800$

High return strategy
This strategy is for traders looking for higher return and still preserving their starting balance.
According to your money management rules, you should be risking 1% of you balance. If you start with 10,000$ and your trade size is 1,000$ (Risk 1%) After 1 year, your balance is 15,000$. Now you have your initial balance + 5,000$ profit. You can increase your potential profit by risking more from this profit while restricting your initial balance risk to 1%. For example, you can calculate your trade in the following pattern:
1% risk 10,000$ (initial balance)+ 5% of 5,000$ (profit)

In this way, you will have more potential for higher returns and on the same time you are still risking 1% of your initial deposit.
Disclaimer: Trading any financial market involves risk. This course and the website www.fxmaster.net and its contents is neither a solicitation nor an offer to Buy/Sell any financial market. The contents of this course are for general information purposes only. The information provided in this course is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country. We reserve the right to change these terms and conditions without notice.

Professional Trader Still Day Trade

2007-11-28T02:34:00.000-08:00

Day trading. Swing trading. Momentum, technical and position trading. In the past five years, these terms have virtually shed their meanings as they were liberally and loosely used in the unique high-volatility environment we saw in the late nineties. I say unique because we only see back-to-back returns of +30 percent a year in the market once every 50 to100 years! Can traders expect to make a living day trading as the trend in historical volatility turns back down? How have things changed near the turn of the 21st century? Or have they really changed at all? First, it?s time to clarify the above terminology and get rid of the misconception that one style of trading is exclusive from another.

In fact, the great majority of professional traders have always made?day trades.? For some, a day trade may mean that the trade entered was a losing one and, thus, was exited instead of holding overnight. For others, day trading profits may supplement those made from holding longer-term positions. Sometimes, if the market serves up a windfall in one day, it is best to take profits at the end of the day because there is 50-50 chance the market will open up or down the next day. And many professional traders make small day trades to ?probe? the market?s strength or weakness. In the ?80s and early ?90s, the bulk of professional traders were exchange members, floor traders or specialists. There was not the advantageous commission structure available to the retail client, nor was there inexpensive access to data or the ease and speed of execution that has come about in the past seven years. Most professionals who day traded in the ?80s for a living often?scalped? ? buying on bid, selling on offer, and constantly turning their inventory over.

The specialists and equity option floor traders held longer-term positions, but constantly traded around their positions and made ?small adjustments? every day. In the futures markets, the majority of pit traders did not hold positions overnight but, instead, were pure scalpers. So, historically, the ?professional trader? has tended t o make a high number of short-term trades. Interestingly, a study done by one of the major clearing firms analyzed what percentage of their retail accounts were profitable in the mid-?80s to mid-?90s, and that number came in at around 8 percent. The most profitable accounts were those with the highest activity levels. But, overall, the floor traders and specialists have always been the most profitable group of traders in history. As you can see, then, day trading is not singular in definition. It means many things to many people..

Swing Trading the Markets from Both Sides

Swing trading is a term that was made popular in the early 1900s. It described a methodology that was purely technical and in which the length and duration of the previous market?s swing relative to its overall technical structure was used to forecast the next swing. A swing on the daily charts could last several weeks in duration. One of the main appeals of swing trading was that it encouraged the active speculator to take advantage of the market?s movement in both directions. The principles of classic swing trading can be applied equally well to a one-minute S&P chart or a weekly bond yield chart. Swing trading, in fact, can include both very short-term day trades and position trading off of the weekly swings.

Momentum Trading Favors Strong, Trending Markets

Momentum trading is a style that came back into vogue in the late?90s, when the markets were awash with excess liquidity and crowd behavior was rising to a frenzy. Most momentum traders try to?jump on board? a rapidly moving market, and the proficient ones understand the power of holding winning positions overnight, playing for the next morning?s follow-through. Any market that shows accelerating price gains, (starting to go parabolic), is best traded using a ?momentum? style. This brand of trading became popular when the commodity markets were lively in the late ?70s and is a form of trend following that works well only in the strongest trending markets.

It is quite a different game than pure scalping ? buying on bid/selling on offer, or applying the classic finesse used in swing trading. With momentum trading, a trader who does not pay up to take the offer will most likely miss the trade. And since the risk on losing trades can be high, (as the trader has already paid a ?retail price?), it is a losing game to play if the objective is a short-term scalp at best. With momentum trading, one must know how to capitalize on milking the “juice” out of trade, and that means truly letting profits run while trailing a tight stop or exiting at the first sign of the market stalling out. As liquidity started to contract, equities have stopped favoring a momentum style of trading (traders may easily recall that after the buying climax three years ago, there were some good initial momentum plays to the downside). A momentum style of trading can be applied equally as well to the short side as to the long side as long as there is a strong trend in place. We are starting to see a favorable momentum environment in other futures markets now, as demand is starting to overcome supply in many of the cash commodities.

Waiting for the Trade to Ripen

We often have a trending market that is not a momentum type of environment, yet offers favorable opportunity for those who are disciplined enough to methodically manage a position. The best position trades often come when the market just starts to break out of an extended accumulation or distribution period. Thus, a position trader must have the patience to monitor the markets on a daily basis, waiting for the trade opportunity to ripen. Yet, there may only be two to three worthwhile opportunities a year to put on a longer-term position in any given market.

Position Trading – A Season or a Reason

Position trading was a favored method in the mid-1900s for market speculators who were not exchange members. Charting techniques that required posting by hand on a nightly basis kept the trader in tune with the market. A position trade most often has a definite technical, seasonal, or fundamental reason as to why the trade is entered, and usually has an objective level that is being played for or a time window during which that trade is being held. In this, it differs from outright long-term investing. Many professionals will often have positions working in one or two markets, while trading other markets on a shorter time frame.

So, Where Do We Go from Here?

Now that we have explored the backgrounds and perceptions of a few trading styles in the past and the types of environments in which they are best suited, let?s address our original question as to what type of environment should we expect in the future and figure out if anything has really changed over the past decade. Recently we looked back over the past 20 years of data to assess the actual volatility in stocks, indexes, cash commodities, bonds and currencies. Historical volatility in equities jumped up at the beginning of 1997 and has remained at elevated levels.

It is just starting to trend down and still has a long way to go before it regresses to its historical mean, let alone the dull levels we saw from 1991 to 1995. It would have been very difficult for a professional upstairs trader to make a decent living day trading stocks in the early ?90s, and the downtrend in volatility suggests that it will be difficult to do so in the future, too. This is not bad news for traders, though. It merely suggests that a trader needs to either lengthen his time horizon and holding period or
look to other trading vehicles. Many traders who looked solely at equities over the past six years have been gravitating towards index futures. We are also seeing the volatility in currencies and cash commodities starting to turn back up after a period of flat ranges in the late ?90s.

Volatility Makes for Good Short-Term Trading

Here is a good rule of thumb: The more volatility an individual market has, the better suited it is for short-term trading. To assess which stocks are better day trading vehicles, one way to calculate volatility is simply to divide its price by its average daily range. The lower this number, the more important it is for a trader to hold positions for longer periods of time in order to rise above the noise and overcome the vig (spread between the bid/ask, plus commissions). In the commodity markets, it would be silly to try to day trade corn. This market is best suited toward establishing a position either on a seasonal play or, perhaps, a technical breakout from a chart formation.

However, in the S&P futures, for example, there are both sufficient volatility and enough intra-day swings for a trader to actually make a living day trading. The big money is made on capturing the larger swings in any market. However, these types of opportunities only come along a few times a year. A good trader will make smaller scalp trades, constantly probing the market until the technicals line up for a play where bigger leverage can be used. For newer traders, the best advice is to forget about the longer-term trades, place less emphasis on playing for higher-percentage returns and, instead, learn to trade on the shortest of time frames ? perhaps small scalps only while foregoing carrying positions home overnight. The smaller the account size, the less risk a trader should assume.

The more time a trader has a position on, the more exposure they have to the markets and, thus, the greater the risk. Also, execution skills will ultimately play a large role in a trader?s overall profitability. Constant practice getting in and out of the market, even if it means scratching many trades, is key. Only with practice will a trader learn to get the ?feel? of placing his orders at just the right time. And, frankly, it is only after a trader has made numerous trades that there is a lessening of the emotions and anxieties that invariably go along with pulling the trigger.

Perhaps this is why most of the more profitable traders have been on the trading floor at one time or another. Apit trader can make more than 500 trades a day, and quickly learns to ditch the losers for a small loss or scratch the trades that do not show an immediate gain. The best professionals are exceptionally good at playing defense.

How We Look at the Markets — Daily

Perhaps the way that we approach the markets each day will give potential day traders some food for thought. The night before, we analyze the daily charts to see if we are in an overall trending environment or a trading environment, and note if there are any chart formations indicating distribution or accumulation. Breakouts from chart formations tend to lead to the better position trades. We want to be right on top of any impending breakouts, because a late entry on these can substantially increase the risk.

It does not take very long to go through the individual futures markets, the major market indexes and sectors. Next, we analyze what type of individual day we are expecting. Is there potential for a trend day ? the easiest type of day on which to make big profits ? or is a consolidation day expected, where we can look to make small scalps in either direction? We also make notes for each individual market if there is a key pivot about to come into play ? perhaps a 20-day high or low, or a gap area. We usually have anywhere from 10 to 15 different setups among assorted markets for the next day?s trading, and we will also have a list of 8 ? 12 interesting stock plays that bear watching.

The next day, we may only make one to three trades that will be held overnight. It is not possible to trade every market or every setup, but if we have done the necessary ?homework? and preparation, we find that a few of these may ?fall into our lap? each day. We also will be ready to take advantage of any opportunities to put on longer-term position trades, but these conditions may only happen once every two to four weeks. We then tend to make anywhere from one to five day trades or scalps in the index futures, or higher beta stocks.

Most often, we find that there is a main trend for the day, and in this case, the market can be worked most efficiently when trading with a bias to the long or short side for the day. There is no question that it also requires a hefty chunk of work to manage existing positions. Traders hear this over and over again, but it bears repeating ? one of the hardest things for a trader to learn is to stay with a trade that is working! Lots of patience and preparation goes into finding the choicer long-term trades. This can sometimes be where the big money is made, but only if a trader is not tempted to take

profits too soon! And for a position that is not working as expected, the trader must be quick to let go of the investment in time and energy that went into initiating the trade in the first place and cut bait! We find that we can do that best if we have already noted the ?danger levels? at night.

So, regardless of whether we are simply making short-term day trades or monitoring longer-term positions, much time and preparation is still done when the markets are closed for all types of trading. Day trading can be a great deal of work, since a trader must constantly be looking for new ideas and trade setups.

Serious concentration is also necessary each time a trade is about to be entered. Something to be considered, however, is that for a newer trader, there may be less stress in not having to worry about overnight exposure. We find that for optimal profitability, traders should not limit themselves to one style of trading, nor should they draw too sharp of a line between time frames. At certain times of the year, there may be choice opportunities for establishing positions at key market turning points. These trades can lead to substantial profits.

However, until these occasions come along, a trader still needs to pay the rent. The ability to consistently take small profits out of the market on a majority of the days is even more important than playing for the longer-term positions. Perhaps nobody does a better job of comparing short-term trading to playing for the broader swing than Richard Schabacker: “If a trader is willing to give a large share of his time and energy to study of the markets and of technical considerations, and if he has the proper ability and proper personal makeup, then it seems quite certain that he will make greater profits on the shorter time frame as opposed to position trading.

Certainly, the possibility for such profit is much greater in short-term trading.??On the other hand, the individual who is unable or unwilling to give up a good portion of his time and energy to the study of technical considerations, who knows or finds himself erratic in his trading success or unfitted psychologically for short-term trading, will, of course,? he adds, ?find greater profit, slower but more certain, by confining his operations to those for the long-swing.

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Linda Raschke has been a full-time, professional trader SFO since 1981. She began as a floor trader and later started LBRGroup, a professional money management firm. In addition to running successful programs as a CTA, she has been principal trader for several hedge funds and has run commercial hedging programs. Raschke was recognized in Jack Schwager?s book, The New Market Wizards, and is well known for her book, Street Smarts. Raschke can be reached at www.lbrcapital.com.

Christopher Terry, a full-time stock and index futures trader, is Raschke?s partner. He has spoken at a number of derivative conferences and written articles for SFO and Active Trader, among others. Along with Raschke, he provides a real-time online trading service that provides entry and exit signals for stock traders.

FOREIGN EXCHANGE MARKET IS DIFFERENT FROM THE STOCK MARKET

2007-11-28T02:33:00.002-08:00

The best course of action to take sometimes isn't clear until you've listed and considered your alternatives. The following paragraphs should help clue you in to what the experts think is significant.

The foreign exchange market is further confessed as the FX market, and the forex market. Trading that takes place between two counties with different currencies is the installation for the fx market and the background of the trading in this market. The forex market is seeing thirty agedness aged, established in the initial 1970's. The forex market is one that is not based on branch one business or investing in any one metier, but the trading and selling of currencies.

The difference between the stock market and the forex market is the vast trading that occurs on the forex market. There is millions and millions that are traded run-of-the-mill on the forex market, nearly two trillion dollars is traded current. The amount is much higher than the money traded on the daily stock market of any country. The forex market is one that involves governments, banks, cash institutions again those similar types of institutions from other countries. The

What is traded, bought and sold on the forex market is something that duty succulent impersonate liquidated, meaning it burden be turned back to cash fast, or often times it is actually going to be cash. From solo currency to another, the availability of moolah in the forex market is signal that can happen fast for any capitalist from any country.

You may not consider everything you just read to be crucial information about forex trading, forex course. But don't be surprised if you find yourself recalling and using this very information in the next few days.

The difference between the stock market and the forex market is that the forex market is universal, worldwide. The stock market is necessary that takes joint isolated within a realm. The stock market is based on businesses and products that are within a country, and the forex market takes that a step further to include any country.

The stock market has set vocation hours. Repeatedly, this is going to follow the business day, and will mean closed on banking holidays and weekends. The forex market is apart that is unbolted regularly twenty four hours a day because the vast digit of countries that are motley in forex trading, buying and selling are located in therefrom many different times zones. As one market is opening, another countries market is closing. This is the continual method of how the forex market trading occurs.

The stock market in any country is bit to be based on one shot that countries currency, say through example the Japanese longing, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, you are involved shelter many types of countries, also many currencies. You commit find references to a variety of currencies, and this is a ample difference between the stock market and the forex market.

The day will come when you can use something you read about here to have a beneficial impact. Then you'll be glad you took the time to learn more about forex trading, forex course.

FOREX ( Foreign Exchange Market )

2007-11-28T02:33:00.001-08:00

The following paragraphs summarize the work of forex trading, forex course experts who are completely familiar with all the aspects of forex trading, forex course. Heed their advice to avoid any forex trading, forex course surprises.

The foreign exchange market is further admitted as FX or corporeal is also establish to be referred to as the FOREX. All three of these have the same meaning, which is the trade of trading between different companies, banks, businesses, again governments that are located in different countries. The cash market is one that is always changing leaving transactions principal to be completed through brokers, again banks. Many scams have been emerging in the FOREX business, as foreign companies also people are direction up online to take advantage of people who don't recognize that foreign trade must take place through a broker or a company with direct participation involved in foreign exchanges.

Fund, stocks, and currency is traded fini the foreign exchange markets. The FOREX market will serve going on and exist when onliest currency is traded for another. Think about a trip you may take to a foreign country. Where are you going to correspond to able to 'trade your money' through the value of the gravy that is in that other country? This is FOREX trading basis, also it is not available in all banks, and veritable is not available in all financial centers. FOREX is a specialized trading circumstance.

Small business and individuals usually times looking to make jumbo finances, are the victims of scams when it comes to learning about FOREX besides the foreign craft markets. As FOREX is seen as how to knock off a quick upspring or two, people don't question their participation in identical an event, but if you are not investing money wound up a broker in the FOREX market, you could easily boundary up losing everything that you have invested in the transaction.

Knowledge can give you a real advantage. To make sure you're fully informed about forex trading, forex course, keep reading.

Scams to be wary of
A FOREX scam is one that involves trading but commit turn independent to be a impostor; you have no chance of acceptance your money back once you have invested incarnate. If you were to invest dinero with a thing stating they are mosaic in FOREX trading you want read closely to become versed if they are permitted to do business in your country. Multifold companies are not permitted in the FOREX market, because they have defrauded investors before.

In the last five senescence, with the help of the Internet, FOREX trading and the awareness of FOREX trading has become all the rage. Banks are the number one source whereas FOREX trading to booty point, where a trained and licensed broker is going to complete transactions again requirements you set forth. Commissions are paid on the transaction further this is the daily.

Another type of scam that is casual in the FOREX markets is software that leave assistance you in making trades, in learning about the foreign markets and in practicing so you can prepare yourself for subsequent and creation trades. You want to be telling to rely on a disposition or software that is really alacrity to make a difference. Favor keep secret your financial broker or your bank to learn more about FOREX trading, the FX markets and how you can avoid being the casualty while investing in these markets.
Sometimes it's tough to sort out all the details related to this subject, but I'm positive you'll have no trouble making sense of the information presented above.

FOREX MARKETS - TRADING INTERNATIONALLY

2007-11-28T02:32:00.001-08:00

The following article includes pertinent information that may cause you to reconsider what you thought you understood. The most important thing is to study with an open mind and be willing to revise your understanding if necessary.

Forex market trading is trading money, currencies worldwide. Incomparably all countries around the world are involved in the forex trading market, where money is bought and sold, based on the value of that currency at the time. As some currencies are not worth much, it is not going to be traded heavily, as the currency is worth more, additional brokers and bankers are plan to choose to invest in that market at that time.

Forex trading does take place daily, where almost two trillion dollars are enthusiastic every day - that is a huge amount of money. Think about how many millions it does take to bring about a total of a trillion besides then see about that this is done on a daily basis - if you necessity to get involved in where the money is, forex trading is one 'setting' where money is exchanging hands daily.

The currencies that are traded on the forex markets are going to be those from every country around the world. Every currency has it own three - letter precedent that will represent that scepter and the currency that is being traded. For example, the Japanese thirst is the JPY and the United Stated dollar is USD. The British pound is the GBP and the Euro is the EUR. You can field within many currencies in matchless day, or you can racket to a different currency every day.

Knowledge can give you a real advantage. To make sure you're fully informed about forex trading, forex course, keep reading.

Most all trades through a broker, or those any company are going to require some type of fee so you want to stand for sure about the function you are making before making too innumerable trades which are going to involve many fees.

Trades between markets and countries are going to happen every ticks. Some of the most heavily trades eventuate between the Euro and the US dollar, and then the US dollar and the Japanese yen, and then of the other most often seen trades is between the British pound and the US dollar. The trades happen all stage, all night, and thought out various markets. As one country opens trading for the day another is ending. The time zones across the world affect how the trading takes latitude and when the markets are open.

When you are forging a transaction from one market to another, involving alone currency to more you will notice the symbols are used to explain the transactions. All transactions are going to look something conforming this EURzzz / USDzzz the zzz is to represent the percentages of trading since the percentage of the transaction. Poles apart instances could look like this AUSzzz / USD and so on. When declaiming and reviewing your forex statements and online information you will understand it all much bigger if you are to remember these notation of the currencies that are involved.
That's the latest from the forex trading, forex course authorities. Once you're familiar with these ideas, you'll be ready to move to the next level.

FOREX TRADING - SHOULD YOU INVEST?

2007-11-28T02:31:00.001-08:00

When most people think of forex trading, forex course, what comes to mind is usually basic information that's not particularly interesting or beneficial. But there's a lot more to forex trading, forex course than just the basics.

Forex trading is all about putting your money into other currencies, so you can gain the interest in that the night, for stage term or the difference in trading money all around. Forex trading does involve contradistinct assets along with money, but because you are investing in other countries and in contradistinctive businesses that are dealing in other currencies the basis in that the money you knock out or lose entrust buy for based on the trading of money.

Constant trading is done in the forex markets as time zones will vary and the markets commit open in one country while another is impending check. What happens in one market leave have an effect on the other countries forex markets, but corporeal is not always bad or satisfactory, sometimes the margins of trading are near each variant.

A forex market will enact present when two countries are involved in trading, and when money is traded for dope, services or a club of these things. Currency is the money that trades hands, from one to greater. Recurrently times, a bank is going to equate the source of forex trading, as millions of dollars are traded undistinguished. There is nearly two trillion dollars traded daily on the forex market. Should you get involved in forex trading? If you are already mosaic in the stock market, you have some idea of what forex trading really is all about.

The stock market involves buying shares of a task, and you chronometer how that company does, waiting due to a bigger return. In the forex markets, you are purchasing items or products, or judgment, also you are paying money for them. In that you do this, you are gaining or losing as the currency exchange differs general from commonwealth to country.

Is everything making sense so far? If not, I'm sure that with just a little more reading, all the facts will fall into place.

To better introduce you for the forex markets you can learn about trading and purchasing online using free 'game' like software.

You bequeath log on and create an account. Entering information about what you are interested in and what you want to do. The 'game' will allow you to make purchases and trades, involving different currencies, forasmuch as you can then see front hand what a gain or loss commit correspond to like. As you continue on shadow this mock account you leave see first hand how to make decisions based on what you know, which means you will have to read about the market changes or you will posses to take a brokers information at value besides play from there.

If you, as an individual want to show involved in forex trading, you requisite get involved fini broker, or a financial organism. Individuals are besides admitted as spectators, even if you are investing money owing to the equivalent of money you are investing is scant compared to the millions of dollars that are invested by governments again by banks at any given time. This does not parsimonious you can't stir involved. Your broker or peril advisor will be able to tell you more about how you can be involved in forex trading. In the US, there are many regulations and laws in regards to who can handle forex trading for US proletariat then if you are searching the internet for a broker, appear as sure you scan the print, and the information about where the company is located and if it is go for you to do business plant that enterprise.
You can't predict when knowing something extra about forex trading, forex course will come in handy. If you learned anything new about forex trading, forex course in this article, you should file the article where you can find it again.

FOREX TRADING, WHAT THE HYPE ALL ABOUT

2007-11-28T02:30:00.001-08:00

Are you looking for some inside information on forex trading, forex course? Here's an up-to-date report from forex trading, forex course experts who should know.

Forex trading is all about making big money. Some investors have launch absolute quite easy to lead to a large profit of gravy as the forex market changes daily. Forex, is the foreign exchange market. Online and offline you consign find references to the forex market as FX as hearty. Forex trading takes niche over a broker or a financial institution often where you are live to clasp other types of stocks, bonds and investments.

When you are thinking about getting involved in the forex markets you should notice you are sending money to be invested with particular countries. This is done to timber up the investments of people involved in certain types of hedge coinage, and in the markets overseas. The forex market could keep your long green invested in one market unparalleled stint, and the next day your green is invested in deeper country. The probably changes are determined by your broker or financial institution. When reading your statements also learning fresh about your balance, you will find that every type of currency has three letters that will represent that currency.

For example, the United States dollars is USD, the Japanese yen is JPY, besides the British jar sterling bequeath construe as GBP. You cede also find that for every transaction on your tally sloping you bequeath see notice that looks like this: JPYzzz / GBPzzz. This means that you took your Japanese itch salary and invested valid into something in the British contact market.

Truthfully, the only difference between you and forex trading, forex course experts is time. If you'll invest a little more time in reading, you'll be that much nearer to expert status when it comes to forex trading, forex course.

You will find legion transactions from one currency to another if you hold money that is scattered ended out the forex markets.

Forex markets trading by feat management firms are the companies you can trust mask your money. You want to find a company that has been dealing with forex trading considering the early seventies, and not someone just new on the block so you get the most as your hard earned money. It is important that you beware of companies that are popping up online, and often times from foreign countries that are stating they burden get you involved in the forex markets also trading. Read the fine print, and comprehend whom you are dealing with because the best possible protection.

If you are interested in trading on the forex market, you will find limits for investing are different from matter to shooting match. Often times you cede learn that you itch a minimum of $250 or $500 while other companies will longing $1000 or $10, 000. The field you are dealing harbour will set limits in how inimitably you need to open an account with their company. The scams that are online cede tell you, that you only need a $1 or $5 to unlatched an account, but you need to learn more about that enterprise besides where they are doing business before investing any money, this is for your own shelter while dealing in forex trading and markets online.
Hopefully the sections above have contributed to your understanding of forex trading, forex course. Share your new understanding about forex trading, forex course with others. They'll thank you for it.

FOREX TRADING, WHERE DO CUSTOMERS GO?

2007-11-28T02:28:00.000-08:00

This article explains a few things about forex trading, forex course, and if you're interested, then this is worth reading, because you can never tell what you don't know.

Forex trading uses currency also stock markets from a intermixture of countries to create a trading market where millions and millions are traded and exchanged daily. This market is consonant to the stock market, as people settle and sell, but the market and the over all results are highly infinitely larger. Those involved in the forex trading markets number the Deutsche bank, UBS, Citigroup, and others such as HSBC, Braclays, Merrill Lynch, JP Morgan Chase, and still others resembling as Goldman Sachs, ABN Amro, Morgan Stanley, and so on.

To get involved in the forex trading markets, contacting any of these large broker assistance firms is going to be in your best interest. Sure, anyone power get involved in the forex market, but it does catching time to learn about what is hot, what is not, and just where you should stead your money at this time.

International banks are the markets biggest users on the forex markets, as they have millions of dollars to invest daily, to earn interest and this is just one method of how banks father money on the money you accumulate in their bank. Regard about the bank that you liveliness with all the time.

Think about what you've read so far. Does it reinforce what you already know about forex trading, forex course? Or was there something completely new? What about the remaining paragraphs?

Do you know if you can go expert, and secure wherewithal from 'another' country if you are heading visible on vacation? If not, that bank is most likely not involved in forex trading. If you have to know if your bank is involved in forex trading, you liability ask any executive or you can look at the financial information sheets that banks are to tally to the public on a quarterly baiss.

If you are new to the forex market, it is significant to realize there is no one person or one bank that controls all the trades that occur in the forex markets. Various currencies are traded, and will originate from anywhere in the world. The currencies that are most often traded in the forex markets include those of the US dollar, the Eurozone euro, the Japanese yen, the British pound exemplary and the Swiss franc as well through the Australian dollar. These are just a few of the currencies that are traded on the forex markets, with many other counties currencies to imitate included as well. The main trading centers for the forex trading markets are located in Tokyo, Topical York and in London but with other smaller trading centers located thought out the world as well.
Those who only know one or two facts about forex trading, forex course can be confused by misleading information. The best way to help those who are misled is to gently correct them with the truths you're learning here.

FOREX , TRADING FOREIGN CURRENCY

2007-11-28T02:27:00.000-08:00

Do you ever feel like you know just enough about forex trading, forex course to be dangerous? Let's see if we can fill in some of the gaps with the latest info from forex trading, forex course experts.

FOREX trading is all about trading foreign currency, stocks, besides similar type of products. The currency of one territory is weighed against the currency of bounteous rule to determine cost. The value of that foreign currency is taken into foundation when trading stocks on the FOREX markets. Most countries have government over the value of that countries value, involving the currency, or money. Those who are ofttimes involved in the FOREX markets embody banks, large businesses, governments, again financial institutions.

What makes the FOREX market different from the stock market?
A forex market trade is one that involves at least two countries, and it can take place worldwide. The two countries are one, with the investor, also two, the country the money is being invested in. Most all transactions taking place in the FOREX market are going to take place through a broker, such as a bank.

What really makes up the FOREX markets?
The foreign exchange market is made up of a variety of transactions also counties. Those involved in the FOREX market are trading in sizeable volumes, goodly amounts of money. Those who are involved in the FOREX market are generally involved in cash businesses, or in the trade of very fluid assets that you can lease and yes fast.

The market is large, very large. You could toss around the FOREX market to be vastly higher quality than the stock market in any one country overall. Those involved in the FOREX market are trading daily twenty - four hours a future and sometimes trading is buttoned up on the weekend, but not all weekends.

You might be surprised at the number of people that are involved in FOREX trading. In the years 2004, almost two trillion dollars was an average daily trading volume. This is a huge number because the number of daily transactions to take place. Think about how much a trillion dollars really is also then times that by two, and this is the money that is changing hands every stretch!

The FOREX market is not determining new, but has been used now being thirty years. With the introduction of computers, and then the internet, the trading on the FOREX market continues to grow as more besides more people and businesses alike emerge as aware of the availablily of this trading market. FOREX only accounts for about fine percent of the total trading from country to reign, but considering the popularity in this market continues to grow so could that number.
The day will come when you can use something you read about here to have a beneficial impact. Then you'll be glad you took the time to learn more about forex trading, forex course.

THE WORLD WIDE FOREX MARKET

2007-11-28T02:24:00.000-08:00

If you're seriously interested in knowing about forex trading, forex course, you need to think beyond the basics. This informative article takes a closer look at things you need to know about forex trading, forex course.

Forex is a trading 'method' also known as FX or and foreign market exchange. Those involved in the foreign exchange markets are some of the largest companies besides banks from around the world, trading in currencies from unequal countries to procreate a balance as some are big idea to gain money further others are going to duck wage. The basics of forex are similar to that of the stock market found in any country, but on a much larger, grand system, that involves people, currencies and trades from around the world, in just about any country.

Different currency rates happen and change every trick. What the value of the dollar may be one day could exemplify higher or lower the next. The trading on the forex market is one that you have to watch closely or if you are investing burly amounts of money, you could duck large amounts of money. The main trading areas for forex, happens in Tokyo, in London and in New York, but there are and innumerable other locations around the world where forex trading does take room.

The most heavily traded currencies are those that include ( in no particular order ) the Australian dollar, the Swiss franc, the British pound sterling, the Japanese yen, the Eurozone eruo, also the United States dollar. You answerability trade lump peerless currency against another and you can business from that currency to another currency to build up additional chips and pursuit daily.

The areas where forex trading is taking place will open and muggy, and the next will open and sultry. This is experimental also in the stock exchanges from around the world, over different time zones are processing order and trading during different time frames.

If your forex trading, forex course facts are out-of-date, how will that affect your actions and decisions? Make certain you don't let important forex trading, forex course information slip by you.

The results of any forex trading in one country could posses contact besides differences in what happens in supplementary forex markets as the countries take turns opening besides closing with the time zones. Exchange rates are activity to vary from forex trade to forex racket, and if you are a broker, or if you are news about the forex markets you want to notice what the rates are on a addicted day before creation slab trades.

The stock market Is regularly based on products, prices, and other factors within businesses that will silver the assessment of stocks. If someone knows what is vitality to happened before the general unconcealed, it is often confessed as inside trading, using craft secrets to play ball stocks and parent money - which by the way is illegal. Skillful is especial little, if any at all inside info in the forex trading markets. The monetary trades, buys besides sells are all a part of the forex market but mere short is based on business secrets, but more on the value of the economy, the currency and such of a country at that time.

Every currency that is traded on the forex market does have a three letter fair play associated with that currency so there is no misunderstanding about which currency or which country one is investing with at the lastingness. The eruo is the EUR and the US dollar is known because the USD. The British pound is the GBP and the Japanese yen is known as the JPY. If you are interested in contacting a broker and becoming involved in the forex markets you albatross find many online where you can review the outfit skinny again transactions before processing and becoming involved in the forex markets.
So now you know a little bit about forex trading, forex course. Even if you don't know everything, you've done something worthwhile: you've expanded your knowledge.

WHO IS PARTICIPATING IN FOREX MARKET TRADES?

2007-11-28T02:10:00.000-08:00

This article explains a few things about forex trading, forex course, and if you're interested, then this is worth reading, because you can never tell what you don't know.

The forex market is all about trading between countries, the currencies of those countries and the timing of investing in certain currencies. The FX market is trading between counties, usually completed with a broker or a financial thing. Many people are elaborate in forex trading, which is similar to stock market trading, but FX trading is completed on a much larger overall scale. Much of the trading does take place between banks, governments, brokers also a small amount of trades will take community in retail settings where the typical person involved in trading is known as a spectator. Financial market again financial conditions are making the forex market trading go spread and down probably. Millions are traded on a daily basis between many of the largest countries again this is going to include some amount of trading in smaller countries as well.

From the studies over the years, most trades in the forex market are done between banks and this is called interbank. Banks make up about 50 percent of the trading in the forex market. So, if banks are widely using this method to make money for stockholders and for their own bettering of vocation, you know the almighty dollar must be acknowledged for the smaller investor, the fund mangers to use to increase the amount of interestedness paid to accounts. Banks trade treasure daily to increase the amount of money they hold.

The more authentic information about forex trading, forex course you know, the more likely people are to consider you a forex trading, forex course expert. Read on for even more forex trading, forex course facts that you can share.

Overnight a bank will invest millions in forex markets, and then the next day make that money available to the public in their savings, checking accounts and etc.

Application companies are also trading more generally in the forex markets. The recourse companies such as Deutsche bank, UBS, Citigroup, and others jibing as HSBC, Braclays, Merrill Lynch, JP Morgan Chase, and civil others such as Goldman Sachs, ABN Amro, Morgan Stanley, and so on are actively trading in the forex markets to increase fortune of stock holders. Many smaller companies may not be involved in the forex markets as extensively as some large companies are but the options are stil there.

Homey banks are the banks that hold international roles in the foreign markets. The supply of gravy, the availability of money, and the thing rates are controlled by household banks. Central banks profligacy a large role in the forex trading, and are located in Tokyo, New York again in London. These are not the individual familiar locations for forex trading but these are among the very largest involved in this market strategy. Sometimes banks, commercial investors besides the local banks will have large losses, again this in turn is passed on to investors. Other times, the investors and banks will keep huge gains.
Sometimes it's tough to sort out all the details related to this subject, but I'm positive you'll have no trouble making sense of the information presented above.