Forex Pip Machine

Archive for September, 2009

If I had a nickel for every forex trading course out on the web now, I would have quite a nice mountain of nickels!

There are so many places to find forex trading education. If you have already embarked on the forex trading journey, you probably have already opened a demo account with one of the most popular brokers such as FXCM, Forex.Com, Alpari, Interbank FX, or FXDD. These are only a small handful of the available brokers. Most if not all of them provide their own in-house forex trading education and training.

Most forex courses involve using the standard indicators that can be found in most online trading platforms. By far the most popular of these trading software platforms is the reliable Metatrader 4 trading platform. This charting and trading software is provided by most but not all of the top forex brokers and is very stable and user friendly. Many of the popular indicators that are used by most trading systems include Bollinger bands, the Stochastic Oscillator, the Mac D, the Williams range, and Moving Average lines.

Bollinger bands are graphic representations of areas on a chart where the price of a specific currency pair would have the most probability to “change”. This change is often in the form of a reversal of price movement. The Bollinger bands are represented as lines on the chart.

The MACD is short for Moving Average Convergence Divergence. This indicator is often found at the bottom of your MT4 screen. It is based on the relationship between two different moving averages. This is plotted as a graph and then it is further related to another exponential moving average line that acts as the buy or sell signal indicator. In short, the MACD is very effective in ascertaining a currency pair’s momentum.

The Williams percentage range is an indicator similar to the stochastic oscillator in that it monitors momentum. It responds a bit quicker to a currency pair’s volatility and also indicates when a pair is either overbought or oversold.

Now most trading systems adhere to some form of strategy in terms of the market’s tendency to either breakout, trend, or stay in a zone. Most of these systems rely on candle stick interpretation  as well as indicators to determine direction and entry point. They also establish conditions for possible trade “set ups” and “signals” for entry.

One can really get caught up in a sea of indicators and complicated systems. Usually the best systems are the ones that are elegant and in essence simple. Remember that these systems have success percentages. Try to look for the ones that have at least a 60% success rate. Also remember that the system determines only part of your trading outcome. The rest is determined by how well you trade the system, how disciplined you are with money management and risk, and how well you can control your emotions of greed and fear.

For a very effective forex trading course, take a look at James De Wet’s E75 Club!

Technorati Tags: brookers, courses, forex, indicators, James De Wet, systems, trading, trending

The most successful floor traders are those that have the most experiance, this is no coincidence and should be a pointer for those who aspire to become a good trader. Day trading can be likened to being a sportsman, such as a golf pro or tennis champion, you need to be trained and in good physical shape. Skills are needed which must be developed over time and practiced until they become 2nd nature. If you want to learn how to day trade you must be prepared to put in the effort. Here are a few of the key skills that you must develop as a trader.

1. Technical analysis can be used for futures as well as the more standard stocks, options and bonds that most people trade. This can give you a big edge over other traders who have not taken the time to study the charts support and resistance areas, trendline and patterns. Learning technical analysis is really a must do if you want to trade futures successfully.

2. This is a very simple point but is very important, always have your trading plan prepared before you enter a trade, never try and create it on the fly, you will be much too emotional. Make sure that you have an entry and exit point in your plan.

3. Keep your losses small!, this is the one thing that every trader must do if they want to stay in the game for a long time. By doing this you will preserve your capital allowing you to trade another day. Your small gains will compensate your small losses allowing your big wins to give you an overall profit

4. Over trading is a big mistake that a lot of amateurs make. Professionals tend to be more patient and wait for the better opportunities to come along, this is called cherry picking and takes both patience and discipline. These are must have skills that you must develop.

5. This is a big day trading tip, it is important that you track all your trades and review them to see where you are making the mistakes. This is quite hard work, but this is what separates the professionals from the amateurs. Unless you do this you will keep on making the same mistakes. The best way to do this is to keep both a daily and weekly log.

6. Only trade when you are both physically and mentally prepared. This is often overlooked but is very important. Do you think a tennis star can win a game when they are tired and mentally not focused?, it’s unlikely. Being prepared means getting a good nights sleep, having your trading station and charts well prepared before the market opens, taking the time each day to review your trading plan and rules. Finally you must have the mental frame of mind and confidence that you are going to be successful today in your trading.

7. If you are new to trading futures take the time to paper trade until you are very confident that you are going to make money. You will know when you are ready because you will start to hate paper trading knowing that you could be making real money profits on a consistent basis.

Remember that the markets only trend for about 20-35% of the time, the rest is either sideways or very choppy, if you want to do trend trading to win you must be fully prepared when the opportunities arise.

Go to Forex Trading Education for a complete course on forex trading.

Technorati Tags: day trading tip, forex, paper trading, professional trader, trading

You’ve heard it happening to forex traders many times before. Heck, it probably happens to you when you trade your live account. You place a trade because you got a signal such as a spike high candle in your trading station. You quickly place the trade and set your stop loss. The price then starts going against you. You were certain that the price was going to reverse because of the last candle being a spike high and all. You are trading a system that has been recommended by reliable sources and that has yielded winners in the past. The price keeps retracing back even more on its way to the stop loss. You then panic and pull out of the trade with some negative pips.
Have you ever done that? I know I have. It’s the all too familiar feeling of fear: the fear of losing the trade.

The Best Forex Trading Advice

The act of placing a forex trade should be a very unemotional and mechanical act. The first thing that has to be established is that:
A) Your trading system has a proven success rate of at least 70%. This is the percentage of winning trades.
B) You are well skilled in implementing the trading system accurately: you recognize the setups, and the signals.

Once the above criteria is met, the following mindset has to be adopted when placing the trade:

“I don’t know and can’t ever predict where the price will eventually go, or if I will ever reach my target. All I can do is trade the system and not care weather I get stopped out. I’ve managed my risk per trade so that eventually the winners will well over-ride the losers”

If you try to trade by trying to predict the market, you end up chasing the market. If your system has a 70% success rate, you should simply trust that on the long term and at the end of the month, you will be in the black with gains. Risk management is really the key to successful trading. If you only risk between 2 to 3 percent of your account on every trade, then you can weather the losses and let your winners run.
If you have a problem with losing say 4 trades in a row, even after implementing the system correctly, then maybe you shouldn’t be trading the forex market because you will lose trades. You simply have to learn how to lose or let go of your attachment to “that one trade”. Let the system do the work.