It takes twelve years of discipline to come a doctor, eight years of schooling to become a lawyer and five years of extensive training to become an engineer. However, most people think that they can become good traders by taking one or two trading courses or by taking several winning trades in the Forex market.
Forex currency trading is complex and is extremely demanding! Most retail traders fail 80-90% of the times in their venture. All traders try to make large sums of money using the high leverage provided by the brokers. Leverage is a double edge sword where you can make a lot of money quickly, or you can lose a lot of money even quicker. Many new traders lose their initial investment within the first two month trading and in most case struggle to win the lost money back, by investing more. Trading without proper techniques and money management is similar to gambling. Think about a new doctor, he may have the education training but still requires two years of residency. Most traders lack the education, patient, and neglect the rules of money management.
Most traders who enter the Forex market are being drawn to the promise and hope of easy money. They are drawn by small starting capital and yet the being able to trade large amount of money due to enormous leverage offered by the industry. Novice traders trade without any kind of effective trading plan, and they may be pushed by their instructors to open real trading account using their instructors as introducing brokers. Most of the traders have no proper idea about good trading software, how to use the charts, or perform a detailed technical analysis of the currency pair they are trading. Novice traders should not be opening real account after one or two years of demo trading and many practicing trades. During the demo trading period, it is recommended that notice traders should follow automated trading software in parallel. A good trading software is the one that completely focuses on risk management, and is simple to operate and easy to understand by even an inexperienced trader.
Whether it is a novice trader, or any experienced person trading in Forex market, they would make basic money management mistakes, and it is here that they fall miserably. Many-a-times the retail traders make emotional attachment to their trades resulting into large losses. And this happens more with the novice traders who lack the experience of controlling their greed, fear and disciplines. After experiencing regular bouts of loss, new traders ultimately lose the interest, and finally give up.
In the attractive sounding Forex Market, things are not easy as they seemed. Sudden changes create the windfall or downfall for the retail traders. A trader can make easy and huge gains in a short period of time, but it is his consistence performance over six to twelve months that will determines his success. This fundamental also applies to Forex trading software and managed Forex accounts using manual trading or automated trading. All trading systems must be followed for at least six months before committing further investment. If you assume that Forex trading experience can be accumulated in a few months with several trading courses or real time trading chat rooms, it will be a hard learned lesson. It is after six to twelve months that everything begins to go topsy-turvy.
The trick is to understand that the trading profession will requires at least four years of experience before you can generate profits consistently. During the meantime, use the automated trading software in parallel to earn you some income.
About the author: Registered Professional Engineer Winsor A.G.A. Hoang, Founder of Winsor Global Financial Inc. Best Forex Trading Software He is the developer 5 Forex trading systems for auto trading. His automated software is internationally ranked with live trading results published every 30 minutes.
Monday, January 4, 2010
The Two Most Trusted and Time Tested Swing Trading Indicators
The trend is your friend; this is a very common phrase that is used frequently in the trading world. However, some things are easier said than done. Every trader
knows the trend is his friend, but which swing trading indicators should one use to take advantage of the trend? When used properly, trading indicators can make entry and exit of trades easy, but the difficult is in knowing which indicator you should use. As technology has advanced over the years, there has been a huge increase in the number and kind of indicators traders have available. To get a head start on your path to trading successfully, one needs to know which indicators are worth your time and which ones should be ignored. Some of the most popular trading indicators are MACD, Stochastics, Moving Averages and trend lines.
Moving averages are very popular in the trading world. One of the reasons for this is that they are possibly the oldest and first kind of indicators used by traders. Thanks to this they have gained a reputation of being the most widely used and trusted kind of indicator. Many professional stock traders around the world use moving averages to determine trend in the markets. There are several kinds of moving averages; simple, exponential, weighted and many more. Despite the kind of moving average, these indicators are frequently used to spot the trend and determine areas of support and resistance. A trader armed with this kind of information can fine tune their entry and exit increasing their returns.
Building upon the power of moving averages, the MACD is another very commonly used and highly valued trading indicator. The MACD is based on two moving averages and has multiple uses. This single indicator can be used to determine the trend of a market, spot areas of divergence and also be used to generate entry and exit signals for trades. There probably isn't any other indicator that is as versatile and unique as the MACD. The MACD is a momentum indicator and as such is also used to identify areas where markets may be approaching their limit and readying for a pull back. It is no wonder that the MACD is so widely used by professional and corporate traders around the world.
These are just two of the many swing trading indicators that traders have at their dispose. If you are just starting out then it would be advised that you stick to indicators that are well known, trusted and widely used by the trading community and successful traders. Moving averages and the MACD are just two indicators that fall into this category of being proven and reliable. When used properly, moving averages offer any trader the ability to identify the trend and areas of support and resistance at a glance. MACD goes one step further and allows insight into momentum of the market which gives you the advantage of knowing when the market may be running out of steam. These two trading indicators have stood the test of time and should be a trading tool for any new trader.
knows the trend is his friend, but which swing trading indicators should one use to take advantage of the trend? When used properly, trading indicators can make entry and exit of trades easy, but the difficult is in knowing which indicator you should use. As technology has advanced over the years, there has been a huge increase in the number and kind of indicators traders have available. To get a head start on your path to trading successfully, one needs to know which indicators are worth your time and which ones should be ignored. Some of the most popular trading indicators are MACD, Stochastics, Moving Averages and trend lines.
Moving averages are very popular in the trading world. One of the reasons for this is that they are possibly the oldest and first kind of indicators used by traders. Thanks to this they have gained a reputation of being the most widely used and trusted kind of indicator. Many professional stock traders around the world use moving averages to determine trend in the markets. There are several kinds of moving averages; simple, exponential, weighted and many more. Despite the kind of moving average, these indicators are frequently used to spot the trend and determine areas of support and resistance. A trader armed with this kind of information can fine tune their entry and exit increasing their returns.
Building upon the power of moving averages, the MACD is another very commonly used and highly valued trading indicator. The MACD is based on two moving averages and has multiple uses. This single indicator can be used to determine the trend of a market, spot areas of divergence and also be used to generate entry and exit signals for trades. There probably isn't any other indicator that is as versatile and unique as the MACD. The MACD is a momentum indicator and as such is also used to identify areas where markets may be approaching their limit and readying for a pull back. It is no wonder that the MACD is so widely used by professional and corporate traders around the world.
These are just two of the many swing trading indicators that traders have at their dispose. If you are just starting out then it would be advised that you stick to indicators that are well known, trusted and widely used by the trading community and successful traders. Moving averages and the MACD are just two indicators that fall into this category of being proven and reliable. When used properly, moving averages offer any trader the ability to identify the trend and areas of support and resistance at a glance. MACD goes one step further and allows insight into momentum of the market which gives you the advantage of knowing when the market may be running out of steam. These two trading indicators have stood the test of time and should be a trading tool for any new trader.
Making Money in Foreign Exchange Markets through Forex Spread Betting
Online forex trading is an interesting way to make money because of the nature of the business. Unlike the stock market which has its opening and closing bells, forex trading can almost be done round the clock because different markets in different countries open at different times of the day. This is because of the different time zones they belong to. In this sense, forex trading is the global market as you can choose to participate in different time zones based on your availability and disposition.
Like everything else, making money on foreign exchange entails taking a position and knowing when to buy and sell. In this case, you make your case on a certain currencies. There are a lot of currencies which you can trade in the market. In many cases, the most popular currencies traded are the US Dollar, the British Pound, the Japanese Yen, the Swiss Franc, and the Euro. Other popular currencies traded are the Canadian, Australian and New Zealand Dollar. Some currencies like the Hongkong Dollar are pegged to the United States Dollar which just means that their currency is committed to a ratio with the US Dollar so trading with it is a moot point.
In essence, making money in this market is like forex spread betting, something similar to the practices being done on betting in sports. Perhaps, it is the model which sports betting has taken a cue from. Forex spread betting is actually taking a position of buying a currency at a certain rate and selling it at a different rate. That is called the spread. In the case of forex trading, you pit two currencies against each other. You have the base currency and the quote currency. More often than not, the standard currency used as a base currency is the US Dollar. If you go to international hotels, you will see exchange rate tables which are all based on the US Dollar. One makes and may lose money on taking positions on the base currency. Most people would want to buy a currency when this currency is valued less and then sell when the currency increases in value. Now , currencies do fluctuate and sometimes, by doing research about the certain economic conditions about the specific country, one can actually buy and hold on to this position till they are able to sell the currency with a price difference, called a pip, that is comfortable to them.
In any case, there are lots of websites online that can help your interest with forex trading. There are even free demo and practice accounts which initiate you to the market.
Like everything else, making money on foreign exchange entails taking a position and knowing when to buy and sell. In this case, you make your case on a certain currencies. There are a lot of currencies which you can trade in the market. In many cases, the most popular currencies traded are the US Dollar, the British Pound, the Japanese Yen, the Swiss Franc, and the Euro. Other popular currencies traded are the Canadian, Australian and New Zealand Dollar. Some currencies like the Hongkong Dollar are pegged to the United States Dollar which just means that their currency is committed to a ratio with the US Dollar so trading with it is a moot point.
In essence, making money in this market is like forex spread betting, something similar to the practices being done on betting in sports. Perhaps, it is the model which sports betting has taken a cue from. Forex spread betting is actually taking a position of buying a currency at a certain rate and selling it at a different rate. That is called the spread. In the case of forex trading, you pit two currencies against each other. You have the base currency and the quote currency. More often than not, the standard currency used as a base currency is the US Dollar. If you go to international hotels, you will see exchange rate tables which are all based on the US Dollar. One makes and may lose money on taking positions on the base currency. Most people would want to buy a currency when this currency is valued less and then sell when the currency increases in value. Now , currencies do fluctuate and sometimes, by doing research about the certain economic conditions about the specific country, one can actually buy and hold on to this position till they are able to sell the currency with a price difference, called a pip, that is comfortable to them.
In any case, there are lots of websites online that can help your interest with forex trading. There are even free demo and practice accounts which initiate you to the market.
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