The Importance Of Focus In Strengthening Your Forex Trading Strategies

Having excellent forex trading strategies can help you get ahead of the game in forex trading. This will be your best tool to success in every trade call you decide on. Additionally, you need to understand that the strategies you use do not always need to be too technical to be effective. You may be…

Having excellent forex trading strategies can help you get ahead of the game in forex trading. This will be your best tool to success in every trade call you decide on. Additionally, you need to understand that the strategies you use do not always need to be too technical to be effective. You may be surprised at how simple things can turn into the best forex trading methods. And one of the things that are actually often forgotten by most people is staying focused.

Seasoned trading experts say that even though there are a lot of ads and online courses that offer great courses to help you learn the foundation of trading and strategies you can use to consistently earn profits – in other words, the magic formula – there is actually no magic formula to trading. All you need to do is to simply think about things smartly, prepare the appropriate forex trading strategies and always, always focus.

A lot of traders today simply find it hard to focus on a single method of trading for a prolonged period of time, enough to help them master and determine the effectiveness of their approach. They often make things a lot complicated by tackling too much at one time. They either trade with multiple forex indicators or to too many different markets at once with several different entry triggers. Making things this complicated will only provide dangerous results specifically to the entry trigger which is usually the simplest aspect of trading.

One thing that traders should always keep in mind in forex trading is that “focus is key,” and in gaining focus, the best thing is to tackle things one step at a time. Breaking down information in smaller and more manageable pieces will make it easier for you to understand as it will help you learn in your own pace. In trading, once you have already started mastering your strategies, whatever the situation will be thrown to you will be completed in a more efficient and timely manner.

Always remember that much like everything else, be it studying or completing a task from your work, you need to be focused to master information and meet your objectives. Additionally, good traders have always been known to be the ones who have mastered their focus on learning the different set-ups that they no longer need to go and reconsider things through just to find out what to do as they already have a reliable course of action, regardless of the kind of situation the market is in. Click here to learn more.

Liquidity and Randomness – Best Friends for Life!

Let's understand Liquidity first. Liquidity in the financial markets can simply be defined as the ease with which you can carry out your large or small orders without manipulating the price and there is always some counter party available to carry out the transaction. This in simple words means that the market is very popular…

Let's understand Liquidity first. Liquidity in the financial markets can simply be defined as the ease with which you can carry out your large or small orders without manipulating the price and there is always some counter party available to carry out the transaction. This in simple words means that the market is very popular among the participants and there is always a large number of people who transact in that market. One simple measure of liquidity is the volume of transactions, both in terms of number and amount, which take place in a day. Also, ideally in any market the number of participants should be twice the number of transactions that take place since one will be buyer and one will be a seller. But this does not happen since people trade in multiple pairs and generally carry out more than one transaction. But for sake of simplicity let's for now assume that this is the case.

I am not sure if you know this but the Forex Markets are one of the most liquid in the world with an average daily turnover of $ 4 tn and this figure touched the $ 4.9 tn mark in October, 2011. No, I am not joking this is as per the Bank of International Settlements. What this basically implications is that the number of participants would be very large as per the assumption we made above and they would have deep pockets. Combine this with the fact that Forex is mostly an OTC market and primarily used for payment or hedging purposes.

Now finally let's paint the complete picture. When we say that the number of participants are large and the primary use for this market is payments or hedging then this basically translates to 'need'. Which thus assumes that these participants may not wait for the perfect level to enter or to exit as this is not their primary business. Which in turn makes their actions less rational or so as to random. Since the objective is not market making or trading, it is more of hedging and completing other business obligations.

This also means that the banks are market makers who are carrying out these transactions for their clients to employ the best piece of software, people and money to ensure they get an edge out of these markets and can deliver their clients with leading advice. When you trade the Forex markets and compare them with some other market that you must have traded you will notice significant differences. Even basic S & R levels do not play in perfectly. Many times the markets would overshoot or just remain short of that target. That is why we look at areas of S & R and not exact pin point. Compare this with a thinly traded stock in any other market and you will realize what I mean.

Therefore, we can now say that the more liquid markets are, the more chances of them being random and this is more or less a global principle and can be applied to any market in the world. Just by looking at its size you can make a fair assumption about the competition you will face, smart money at play and about the randomness of these markets. I am not saying there is no order to this Chaos of Randomness, there is and we will talk about that is some other post.

The Qualities Of A Successful Forex Trader

Knowing what novice traders lack with regards to trading skills is very useful, but it can be even more interesting to know the common qualities forex traders who actually succeeds on the market! Let us analyze what are those qualities that actually make a trader successful and differentiate him from the others. Knowing How to…

Knowing what novice traders lack with regards to trading skills is very useful, but it can be even more interesting to know the common qualities forex traders who actually succeeds on the market! Let us analyze what are those qualities that actually make a trader successful and differentiate him from the others.

Knowing How to Lose

In forex trading, nothing is safe. You win on some operations and lose on others; the important thing is that the final balance is positive. Often novice traders focus on earnings and tend to focus on “how to get a good win.” With experience, it becomes clear that it is much more efficient to find “lost property”!

The first step is to realize that losses are inevitable, no one can boast that they only achieve profits, except for a short defined period and again with the help of luck.

Once one has secured that the discharge is normal in the context of trading, you must learn to manage with good risk management.

The fundamental basis is to use protective stops (Stop Loss), which are automatic preprogrammed orders that cut your position when the loss becomes greater than what you had decided to accept as the maximum risk at the time of you entered the order.

Many beginners are tempted to expect that “it gets better” when a position is losing, while the pros and cash traders accept their losses without flinching and move on to another trade.

Being Able to Resist the Temptation of Over Trading

Available statistics are very clear: These are not the most active forex traders who earn the most money!

Beginners usually want to spend more time trading, hoping to reap maximum benefits, but it is absolutely much more profitable to wait for the right configuration, the right trend or the right signal.

Sometimes you have to be patient when the market does not necessarily lend itself to trading because this is a situation that occurs quite often.

Knowing How to Control Your Emotions

A novice trader is often very subject to his emotions. The head feeling of early gains, the fear of loss, nervousness face transactions that do not go as planned.

The pro trader is the opposite as he is emotionally detached. He trusts his strategy and in his mind, trading is almost an unacrelated financial impact, whether positive or negative.

In this way, one can master his actions, when thinking logically and responsibly, thus avoiding many errors.

I recall my grandfather, who used to say that you should never immediately respond to a letter that upset you, that you will most often later regret. This is pretty much the same thing in trading, you should never trade within the scope of emotion whatsoever and this is easier said than done, even for experienced traders!

Forex traders who are successful generally follow a “trading plan” with high accuracy. This is a personal method, a kind of tutorial to know what to look for, on what basis and what rules to follow when trading is practiced.

How to Choose a Forex Trader to Copy

Forex trading has always been a well-known way to make money on the Internet. Over the last decade, literally hundreds of Forex brokers have popped up, each claiming to offer the best Forex trading training and education methods to help new traders earn easy profits. In the last few years, however, a new phenomenon has…

Forex trading has always been a well-known way to make money on the Internet. Over the last decade, literally hundreds of Forex brokers have popped up, each claiming to offer the best Forex trading training and education methods to help new traders earn easy profits.

In the last few years, however, a new phenomenon has developed: social Forex trading. Several brokers have realized that new Forex traders are overwhelmed by the amount of education and practice necessary to become successful Forex traders. Simply put, most new traders expect to make trading trading profits immediately, and are sorely disappointed when their broker fails to provide. Social Forex trading addresses this problem by allowing traders to view the trades carried out by the brokers' successful, trader Forex traders. The new traders can then copy the veterans' trades exactly, approaching similar profits.

This seems very easy, and sometimes too good to be true. While it is easier than learning to trade Forex by reading countless hours of lessons and learning technical analysis, it's not quite as simple as clicking a button and becoming rich. Now traders have to decide not only which Forex broker to use, but which trader to copy. This can be a tricky decision, but here are some pointers to help:

  1. Choose a trader with a low risk profile. Many of the best Forex brokers will analyze a trader's history, amount of margin used, size of trades, etc., and use that information to create a risk profile. In some cases, a high-risk Forex trader may produce larger profits in less time. However, for a new trader, it's unwisely to copy such a trader, because they may commit too much capital to one trade, and this would put the new trader's account in jeopardy if the trade should go bad. A low-risk Forex trader will not make such trades.
  2. Choose a broker who allows you to diversify. You would not risk all your money on one stock or commodity, so why would you invest all your money with a single social trader? Instead, find some low-risk Forex social traders and spread your money amongst them. This will reduce your overall risk, while still allowing you a nice profit.
  3. Choose traders with a history of success. Most brokers' websites will list their most successful traders by profit percentage first. While this is a good way to find successful Forex traders to copy, it is wise to dig a little deeper into the statistics. One good trade could push a trader's profits very high on the list, but that's not helpful for choosing which Forex trader to copy. Instead, look for traders whose equity has increased consistently over the course of six months or even a year.

Following these steps will help to reduce your Forex trading risk and allow you to find the best social Forex traders to copy. Good luck, and happy trading!

How to Practice The Art of Forex Scalping

There are many ways to approach trading in the forex market, depending on the time horizon. One can indeed classify types of trading in three categories: day trading, which involves taking positions on a few hours a day, swing trading, which involves taking positions on some days, and scalping, which is to take multiple positions…

There are many ways to approach trading in the forex market, depending on the time horizon. One can indeed classify types of trading in three categories: day trading, which involves taking positions on a few hours a day, swing trading, which involves taking positions on some days, and scalping, which is to take multiple positions within a very short timeframe .

What is Exactly Forex Scalping?

Scalping involves taking multiple daily short-term operations, with a strong leverage and limited objective earnings, highly leveraged offsetting weaknesses in terms of pip gains with a target to achieve financial financial gains.

There are not really any rules and it depends on the mood of the day and the state of mind of the trader, but we can estimate a scalper passes between 20 and 100 operations per day, each lasting a few seconds to a few minutes, for purposes of gain from 5 to 15 pips.

This can be a stressful and exhausting activity and requires staying glued to your forex trading platform all through the day.

Where Does the Scalper Base His Decisions?

We believe that scalping the forex is a “trading experience.” The short-term transactions and instant response required at the position makes the delicate analysis: We really do not have time to analyze the market in a conventional manner.

Scalpers can use technical analysis indicators; I believe that the main indicators are poorly adapted on such short time horizons. Indeed, the signals are often slowly delayed, or slightly advanced.

So, it's about the experience and the instinct on what the scalper primarily basis his actions. A scalper does not know what to do with the general trend, or the macroeconomic environment of the moment. He is interested in the economic calendar and the events that can generate volatility which he can enjoy, but does not practice the economic and psychological analysis.

What are the Qualities of a Scalper?

The first quality of a scalper is his experience. Indeed, he needs to act fast, performing a rapid technical analysis that needs to be done by instinctively and without much thought. A scalper should perfectly master the technical indicators that he could potentially use.

Here we can make a point about the “instinct of the trader,” the “feeling.” I believe it is not an innate quality, but a quality that comes with experience. It is a force to analyze the market, reactions and practice technical analysis that a trader unconsciously incorporates the sum of its findings, its successes and its failures.

As time passes and things get better, the trader thinks he developed an instinct, but he is nothing, he just unconsciously applies the sum of his experiences, so do not play by the “pure instinct” but simply “instinctive analysis.”

The second quality of a scalper is the mastery of his emotions. This will indeed be when we pass dozens or even hundreds of transactions per day, it is inevitably subjected to intense stress and an untold number of opportunities to get overwhelmed by emotions.

To conclude we need to mention that scalping can indeed look very attractive. The adrenaline, the opportunity to make significant and rapid gains, the prospect of practicing “real trading” as described in the collective imagination. However, beginners should not be allowed to play, and even consider Scalping as a possible goal, unless they have obtained the necessary skills and experience.

What Is A Forex Trading Journal And How It Can Help You Succeed

When starting to trade Forex, there are two main steps to follow before expecting to start making money intelligently (ie relying on logic and analysis). The first step is to learn the basics of technical analysis and acquire the necessary financial knowledge to be in a position to assess the impact of the news and…

When starting to trade Forex, there are two main steps to follow before expecting to start making money intelligently (ie relying on logic and analysis).

The first step is to learn the basics of technical analysis and acquire the necessary financial knowledge to be in a position to assess the impact of the news and statistics. Once well informed, the trader can start practicing, but the initial purpose should be to learn and not to suddenly become a millionaire.

Beginner's must have in mind to gain first the necessary experience, first with a demo account (for a limited time demo accounts are not always the best way to train, as we have already explained) and then practicing via real trading cautiously, with very small positions.

To gain experience more quickly when starting the actual trading, there is a great tool: The trading journal.

What is a trading journal?

In short, it means to list all your positions in the forex market and their criteria. So you can analyze your trading to identify what works for you and what does not work, then draw conclusions and improve.

The trading journal can take many forms, such as:

* A simple notebook meets style
* An excel spreadsheet
* A word document, etc.

What should you put in your trading journal?

The more detailed the journal is, the better. For completeness, we can add:

– Date and time of entry into position
– Currencies concerned
– Size of the position
– Direction of trade (buy / sell)
– Stop limit
– Unit-time graph used
– Reasons for position
– Date and time position output
– Reason-position output (stop? Limit? Signal contradiction? Fear error?)
– Review of the operation
– Free Comments noted that will help you improve

You may also include a screenshot of a graphical representation of your entry and exit positions.

After filling your trading journal, you can begin to analyze it.

The easiest way is to sort your trading journal is by losing and winning trades.

The next step is to find common ground between the winning trades and losing trades and find “winners patterns” and “losing patterns”

* Maybe some type of signal that helped you succeed?
* Maybe for X or Y reasons you always lose money on some particular currency pair?
* When trading in the evening you may be doing far better than trading in the morning sometimes?
* Your stops are often affected, maybe they are too tight?
* You rarely conformed to your stop and your limits?
* The trades on the 5M charts without you succeed on the H1?
* Etc., etc., etc …!

Then the next step is simply to implement the conclusions of these observations: Emphasize on what helps you succeed and stop what is the cause of your losing trades. It's as simple as that.

With this method, you will not simply lose your money but instead you will learn from your mistakes. It is said that the losses are useful because they shape the experience, but if we do not analyze the losses and draw the appropriate logical conclusions, then we have just wasted our time and money for nothing. We strongly recommend that you use a trading journal in your forex trading, especially if you feel that you're still in the “acquisition experience trader” phase.

The Magic of Forex Technical Analysis

Technical analysis is the study of the financial markets (Forex, Stock Exchange, and others), which involves the analysis of what has happened in the past. Based on market (past) charts, the investor tries to determine what will happen in the future. The person making the analysis, tries to spot some recurring patterns in the past…

Technical analysis is the study of the financial markets (Forex, Stock Exchange, and others), which involves the analysis of what has happened in the past. Based on market (past) charts, the investor tries to determine what will happen in the future. The person making the analysis, tries to spot some recurring patterns in the past and use the knowledge of these patterns and apply them in the current market.

Another type of analysis of the financial markets and of course Forex, is Fundamental Analysis, where the investor bases his liabilities as to the development of the courses, based on the economic situations anticipating.

The choice of the type of analysis that an investor would use in predicting future courses, depends primarily on the individuals approach to the markets. Every trader must choose for himself the appropriate mechanisms to thoroughly analyze the market.

Of course, it is said that one should choose only one analysis for decision-making. For example, we use fundamental analysis to predict the long term and technical analysis to forecast the short-term.

Technical analysis is based on three elements:

a) The market discounts everything – in short we can say that exchange rate graphs reflect everything that takes place within the various economies, as well as reflect all the factors that may have an impact on the exchange rate itself. Therefore, it makes no sense to analyze anything more than a currency chart as it is the best representation of the relationship that exist between the two currencies, forming a single exchange rate.

b) Prices are subject to market trends – research has shown that exchange rates are displayed as graphs trends. You can highlight an upward trend, downward and horizontal trend. The investor tries to determine which current trend prevails and on this base his position in the market. As research has shown the continuation of a particular trend is more likely that its termination.

c) History repeats itself – another study has shown that certain events tend to repeat themselves. Consequently, a number of patterns and technical formations, allow investors to make appropriate decisions with regards to their entry positions.

Closing We need to mention that in technical analysis, there are numerous methods often used method by analyzing many different charts such as: linear formations and formations candlestick charts, moving averages, support / resistance, technical indicators, Fibonacci levels, Elliott wave theory and many other methods that will be analyzed at a later stage.

Why Does The Euro Generally Stand Better Than The US Dollar In The Forex Market?

Why the euro stands generally better against the dollar in the Forex market? It is indeed a question that we are entitled to ask, since the economic situation and growth prospects have generally been better in the United States through the years than in Europe. Even way back in time, the United States outperformed Europe…

Why the euro stands generally better against the dollar in the Forex market? It is indeed a question that we are entitled to ask, since the economic situation and growth prospects have generally been better in the United States through the years than in Europe.

Even way back in time, the United States outperformed Europe on almost all indicators: Productive investment, industrial production, or employment. In addition, the position in the field of energy in the United States, which produces natural gas and unconventional oil is beneficial for the cost competitiveness of the country, which should also favor the dollar.

Certainly there is the interest rate differential between the Fed and the ECB is in favor of the euro, but this difference is minimal and does not in itself justify the strength of the euro if we take into account that factors that should benefit the dollar.

Why Does the Euro Generally Perform Better?

– We can therefore try to go further in the analysis because of the strength of the euro.
– We can first meet growing trade surplus in the euro area (although partly due to the decline in domestic demand).

We also note in favor of the euro significant inflows of non-residents (particularly Asian central banks) who buy euro invest in European bonds (mainly heart of Europe). These funds may also be invested in US bonds, but central banks must meet a diversification of foreign exchange reserves, which “forces” to buy European bonds. In addition, investors fear a rise in long-term interest rates in the United States, due to the reduction of growth and the prospect of the Fed reduce its QE, which confirm in their canvass diversification to the euro.

What Factors Might Make a Difference?

As we have seen, the euro does not respond “logically” to the fundamental economic base context because of capital flows within the euro zone. To reverse this situation, the market should worry about the state of the heart of the euro zone.

The situation could have been reversed if there appeared a significant investment in the euro area to the US flow (which would reduce the net capital incoming – outgoing capital in favor of the United States), but there is no indication of such a situation especially with the current economic crisis.

The basic economic fundamentals point to a strengthening of the dollar against the euro, it is a fact. But some factors allow the euro to keep in better shape against the dollar, more than it would normally. Recall that the market always comes back at some point or another to the economic fundamentals and when this is the case, the EUR / USD is likely to suffer a lot within the forex market.

The Importance Of Economic Conditions On Forex Trading

The economic context of a country impacts the appreciation or depreciation of the currency in the Forex market. In principle, a country with good economic growth and increasing consumption of households entails a stable or appreciating currency. On the other hand, the currency depreciates in economically unstable countries or experiencing an economic crisis. Impact of…

The economic context of a country impacts the appreciation or depreciation of the currency in the Forex market. In principle, a country with good economic growth and increasing consumption of households entails a stable or appreciating currency. On the other hand, the currency depreciates in economically unstable countries or experiencing an economic crisis. Impact of economic and financial policies on treaties The United States and Germany are the major economic powers with strong treaties (dollar, euro). In some countries, however, economic growth is not enough to support the currency, especially if the parallel debt ratio is high.

The unfavorable currency settings in times of economic growth

Even in case of strong economic activity, a highly undesirable country does not attract investors, so the value of its currency may drop. Policy interest rate may also influence on economic growth.

Indeed, when a currency is strong, it is less competitive for export. Also, governments intervene through rates to decrease the value of the currency.

Economic Crisis

In 2010, Europe was hit by a major economic crisis resulting from the Greece's debt position. Financially, this is negatively affected the euro which depreciated sharply.

The fall of the euro in the Forex market due to the economic crisis is due to government intervention in the interest rate and the behavior of investors within the Forex market. Governments intervene in the interest rate in order to maintain the competitiveness of the currency export.

As for investors, they buy stronger budgets at the expense of weaker contracts. Weak treaties therefore continue to lose value. Thus the actions of investors will generally strengthen the trend of currency variation, either upward or downwards.

Economic data to consider

To assess the economic situation of a country, there are many numerical or statistical data.

Some are particularly influential in the forex market, such as indicators on the employment situation, the purchasing power of consumers or the state of a country's trade balance.

Impact of imports and exports of a country's local currency

The trade balance shows the relationship between imports and exports of a country. When a country exports more than it imports, the trade balance is in surplus and vice versa.

Theoretically a positive trade balance is favorable for the local currency; however, a trade balance deficit devalues ​​the currency.

A trade surplus that reflects a healthy economy because local companies generate export revenues and increase their sales.

When the trade balance is in deficit, a country must buy foreign currency, selling its own currency, which causes an impairment of them.

The effects of purchasing power in the Forex market

The purchasing power of consumers in a country also influences the currency. To interpret the effects of the purchasing power of currency values, you must compare the purchasing power of another country.

This parity of purchasing power can predict and understand the variation of a currency pair. The system is used to compare the price of a shopping cart identical in both countries.

The price increase indicates inflation, loss of purchasing power and there is generally leads to a depreciation of the currency.

The influence of employment in the Forex market

There is a correlation between certain treaties, especially between the dollar and the euro and the dollar and the pound sterling. The employment situation in the United States can thus act both on the dollar than on the euro.

The unemployment rate is provided monthly has a significant impact on the currency. A drop in the unemployment rate leads to an increase in purchasing power, increased consumption and therefore a good economic growth, which supports the local currency.

In contrast, job losses or the closure of several factories and companies lead to lower production and local consumption which invariably causes a depreciation of the currency.

All traders should have a knowledge of all the above mentioned elements to be in the position to feel the market and by following the trend make the right and profitable decisions that will lead them to success.

Always Be Updated With The Latest News When Trading

To make profitable investments in Forex, it is important to consider the economic and political events in different countries. Factors that influence the currency rates are unemployment, the trade balance, GDP and the development of the sector of goods and services. All these indicators are used to determine precisely the tendency of a value in…

To make profitable investments in Forex, it is important to consider the economic and political events in different countries. Factors that influence the currency rates are unemployment, the trade balance, GDP and the development of the sector of goods and services. All these indicators are used to determine precisely the tendency of a value in the short, medium and long term.

The Main Indicators Forex Trading

It is necessary to know the news to make profitable investments in Forex and thus anticipate the rise or fall of a currency.

Monitor Economic Indicators

The value of a currency depends on certain economic indicators such as:

– the unemployment rate
– the GDP
– statistics of consumption
– the trade balance
– the inflation rate
– changes in the tertiary sector
– the interest of the central bank

The two most important indicators to consider are the interest rate and the level of trade balance that show the difference between the volume of goods imported and exported at those rates.

If the volume of imports increases, the value of the currency will trend downward. Exports boost the national economy and revalue the local currency. The interest rate is a good indicator to measure the economic situation globally. This rate is reviewed monthly by the Fed, the European Bank or the Bank of England. A higher interest rate means that the country is in a great economy.

An increase in the rate of contracts foreign investors. Statistics on consumption determine the purchasing power of the population. Thus, during the financial crisis of 2009, the United States, limited the recession, their figures for consumption, thus offsetting the level of inflation and high unemployment.

The indicator of the level of debt

Investors performing long term Forex transactions must verify the debt ratio of a country. A debt index means that the high population incurs debt and invests or consumes more. However, if people avoid getting into debt in the long term, the country will pass through an economic crisis in the coming years.

Study the results of economic surveys

Investigations and surveys are used to measure the economic outlook for the coming months. In Europe, the ZEW provides this by analyzing the various market trends.

In the United States, Chicago Pmi determines the state companies based in Chicago. Results obtained in this city can be extrapolated to the national level The Net Tic measures the flow of money between the US dollar and certain treaties.

A massive dollar purchase by foreign agencies indicates a significant dynamism of the US economy. Investors can view the results of surveys of consumer confidence in the economy of his country. However, the Net Tic is not a very reliable indicator.

Consult specialized media

TV channels and newspapers dedicated solely to the economic sector should be consulted daily. Some channels offer continuous information on the key financials. Their services are available only subscription. Investors may also subscribe to magazines to get informed by the analysis of expected trends from financial experts. These various journals are available on the trading platforms.

The trader must also learn through other investors. Several forums are powered by thousands of experienced traders and provide free information which can be particularly useful.

Finally we need to stress the fact that the news greatly affects the Forex market. The investor should not ignore technical analysis to measure the behavior of competitive traders. The analysis is based on graphs of global trends on the fall or rise of a currency. The best trader is able to analyze the overall economic information and technical data to develop an effective strategy. Always be updated with the latest news when trading.