One of the biggest myths of currency trading and achieving currency trading success is knowledge is the key, while knowledge is of course important, this is not the hard bit of currency trading. Anyone can learn currency trading yet 95% of traders lose - Why?

Anyone can learn currency trading its easy but traders make two fatal errors.

1. They learn The Wrong Information

When I talk to traders I am bemused at what they think it takes to be successful and they learn information that is guaranteed to make them lose.

For example - they want to try day trading, think you can predict currency prices or that buy low sell high is a great strategy and of course they lose. These are just 3 examples but there are many more.

Forex trading is all about learning the right information and avoiding the myths.

Most traders think they can take short cuts and believe making money is easy, in forex trading but of course its not and you wouldn’t expect it to be, with the rewards on offer. The good news is its not hard either, if you know how to get the right forex education and apply it.

2. They Think Working Hard Will Help.

Other traders I speak to think that the more information they have the better and the more complicated their forex trading strategy is the better it will work

Wrong again.

You don’t get paid for effort in forex trading you only get paid for being right with your trading signal.

Furthermore, complicated systems do not work as well as simple ones as they have too many elements to break - all the best currency trading systems are simple.

Let me give you an example about working smart rather than hard and achieving forex trading success.

In 1983 trading legend Richard Dennis conducted an experiment that set out to prove anyone could learn currency trading. He took a group of people of all ages, both sexes and of varying levels of education and taught them to trade in 14 days.

None of them had ever traded but after 14 days, they went on to trade, made Dennis $100 million and many became trading legends.

In two weeks they learned all they needed to know which leads me onto the next point

3. Discipline is the hard part

Trading is as much about mindset as it is about method.

Dennis focused on teaching them a method but he also made it simple and easy to understand which ensured they could trade with discipline.

If you don’t have the discipline to follow your method through the bad periods - then you have no method.

Discipline comes from inner confidence which comes from understanding and these three key areas are the ones all successful traders have.

Learning forex trading is easy, if you focus on getting the right forex education - if you do that you then need to conquer your emotions to trade with discipline and win.

The equation for success is really

The right Knowledge = Simple Robust Trading System + Applied with Discipline = Forex trading Success.

Acquiring discipline is not easy - this is the hard part of achieving currency trading success.

We will look at this key area in more detail in part 2 of this article.



Thanks to Kelly Price for contributing this article to our Currency Trading blog:

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If you want to learn currency trading the right way you need to be aware that 95% of traders lose - not because they because they don’t try, its just they get the wrong Forex education and this results in a swift wipeout. Here, we are going to give you a plan to devise and implement a forex trading strategy for success in 4 simple steps.

1. Accept Responsibility

If you want to make money in currency trading then you need to accept responsibility for your destiny - no one else is going to give you success you have to take it for yourself.

This means no blaming your forex broker, a guru or the currency markets; you are on your own.

That’s no bad place to be, as all successful traders in currency trading accept this fact and love the challenge.

If you want to make money in currency trading you can, there is nothing to stop you as everything about successful currency trading is specifically learned.

Don’t fall for its easy, its not and with the rewards on offer you wouldn’t expect it to be either.

2. Accept These Facts For Currency Trading Success

The most important fact to accept is that currency trading is a game of odds not certainties, predicting the market and scientific theories, and pinpoint accuracy is a lie perpetrated by vendors and they won’t give you success.

You’re like a successful card player simply playing the high odds but instead of hands their trading opportunities.

You bet big when the odds are in your favor and fold when there not it really is that simple and it will make you a lot of money, if you do it correctly.

Accept that you have to have confidence in what you are doing (which comes from self education and knowledge of your personality) this then gives you the discipline to follow your currency trading system.

Of course - If you can’t follow your currency trading system with discipline, you have no system in the first place!

Markets can be frustrating and you have to wait for the right opportunities but you can win, if you get learn currency trading the right way.

Now lets look at your method for currency trading success.

3. Your Currency Trading System

Building a trading system should be based on the following points and if you work smart and get the right knowledge, it should only take you a couple of weeks to master the basics and have a robust forex trading system that can get the odds on your side.

1. Use a long term trend following system

2. Learn about support and resistance and the timeless method of breakouts - if you don’t know what they are read our other material.

3. Confirm any trading signal you execute with momentum oscillators, this is the key to getting the odds on your side, if you don’t trade with momentum your not trading the odds.

4. Employ a money management system that ensures you have clearly defined get out area when you enter a trade for both losses and profits

Also you need to:

Keep your system simple!

Simple systems are easy to understand, apply and are more robust than complicated ones. If your trading system has to many indicators and it will break in the brutal world of trading and in currency trading less is more just a few is enough.

You can win with a simple system based upon support, resistance and just a few momentum indicators and this is very quick to build and test.

5. Getting Success

Don’t work hard at trading! Work smart and only learn the right forex education.

There is plenty of rubbish sold on the net. For example, most novice traders love day trading yet its guaranteed to lose you money or trust scientific systems that are as accurate as your horoscope.

These traders are naive lazy or both - don’t join them or you will lose.

Once you have built your currency trading system, don’t do any more work on it. Many traders bang on about learning all the time - but if you are happy with your trading system and the logic is sound, there is no need to do more work.

You don’t get paid for effort in forex trading you get paid for being right and that does not involve hard work!

It should only take you 30 minutes or so to execute your trading signals per day and that’s it - get on with your life.

If you follow the above four simple steps you can enjoy currency trading success. You will get the right forex education you need, have the confidence and discipline to apply your forex trading strategy for big gains.

Most traders fail not because they lack a method, but because they lack the mindset to apply it with confidence and discipline and this point cannot be stressed enough. If you want to learn to trade successfully, keep the above points in mind and they will lead you to currency trading success.



Thanks to Monica Hendrix for contributing this article to our Currency Trading blog:

Current Currency Exchange Rates

Foreign Exchange Currency Trading

Current monetary policy allows for free and open exchange of currencies at market rates for most US and European trading partners. In essence, by looking at the exchange rates, and by prognosticating on foreign and international news, foreign exchange traders are making gambles that currency valuations will change in the direction they’re anticipating in the future.

Where the gamble comes in is predicting the time frame. Billions of dollars are run through currency exchanges every day, trying to make money on changes in the market that come with 2 seconds of notice for a fraction of a percentage point - and if you’re the sort of person who can handle that kind of job, you can make a LOT of money at it with properly honed instincts.

A smaller scale foreign exchange currency trading strategy is to do positional buys. For example, right now the Euro is slightly lower than its historical average against the dollar. If oil prices rise, it’s likely that the dollar will drop against the Euro, slightly. If you invested a thousand dollars into Euros at $1.20 per Euro, you’d have 833.33 Euros. If the Euro rose to $1.25 per, your 833.33 Euros would sell for 1040 dollars and some change. Five and six cent shifts in the dollar to Euro exchange rate can happen weekly; the trick is knowing how to play them, and to watch long term trends in addition to the short term bustle. One of the significant advantages of buying foreign exchange investments is that you’re always guaranteed to have something left; it minimizes your risks of a catastrophic loss. It can also get you a rate of return of 5 or 6% in a month, as opposed to a year. Of course, it can also depreciate in value by 5 or 6% in a month as well…

Spotting trends is what separates the good forex traders from the mediocre ones, though there are some tricks of the trade.

The first, if performing a buy-and-hold strategy is to make sure that whatever currency you’re buying is held in a mutual fund in its native currency exchange - this smoothes out any downturns in the exchange rate, and can become an added bonus when you compound the interest with the difference in the exchange rate when you’re done. This does require a substantial initial investment - usually $5,000 to $10,000 or more.

The second is the stop-loss order; in essence, this says “Stop the trade if the price changes outside of the following band”. Given the automatic arbitrage systems, this is useful to minimize risks.

In terms of trading volatility, you need to decide if you’re going to be a day trader, or a position trader. If you’re looking at making this a career, day trading is the way to go; it’s very easy to make (and, alas, lose) fortunes doing rapid trading on the currency exchanges. You’ll need to be well versed in the rules for individual exchanges, when they open and close (currency exchanges are mostly based out of London, and Singapore’s exchange is important for the Asian market). You’ll also want to keep well versed not just on financial news, but world events. Changes in oil prices, trade policies, union rules, even fashion trends, can foretell trends on how currency exchange rates will move.

Position trading (as described above) is better for single investors working the markets for themselves.

An important consideration on all foreign currency exchanges is to remember to buy low and sell high. Don’t cling to investments for patriotic or sentimental reasons; that’s the surest way to lose your shirt. It’s also important to diversify - take your profits out of commodity and currency exchanges and put them aside in something more stable, to minimize your risks. Also, focus on multiple currencies, and look for currency exchange index funds, which tend to minimize the overall risks of this investment strategy.



Thanks to Amar Mahallati for contributing this article to our Currency Trading blog:

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Forex Charts are based on the forex market action involving price. Charts are a major tool in forex trading. There are many kinds of charts, each will help to visually analyze the forex market conditions, assess and create better forecasting, and identify forex market patterns and behavior.

Forex charts and spreads weigh heavily on the return on your trading strategy (this can have a huge affect on your profit or loss). As a trader, you are solely interested in buying low and selling high (like futures and commodities trading on Wall Street). Wider Forex charts and spreads means buying higher and having to sell lower.

A half-pip lower spread does not necessarily sound like much, but it can easily mean the difference between a profitable trade and one that losses money. The tighter the spread is the better things are going to be for you (Happy Days).

Nevertheless, tight Forex charts and spreads are only meaningful when they pair up with good execution of a well laid out trading strategy. A good example of this is, as you analyze your forex chart it shows a tight spread, but your trade shows it has filled, or mysteriously rejected.

When this occurs repeatedly, it means that your broker is showing tight Forex charts and spreads but is effectively delivering wider Forex charts and spreads. Rejected forex trades, delayed execution, slipping, and stop-hunting are strategies that some brokers use to get rid of the promise of tight Forex charts and spreads (so be on the look out for this type of activity and run fast if you notice it).

Both the technical and fundamental forex analyst uses Forex charts. The technical analyst analyzes the “micro” movements, trying to match the actual occurrence with known patterns. The fundamental analyst on the other hand tries to find correlation between the trend seen on the chart and “macro” events occurring parallel to that like (political and other events).

As you can imagine, reading and understanding forex charts can get confusing for the inexperienced trader. You can get most charts now online, as part of a subscription service, and they most often include frequent updates. Because technical analysis is such a popular method of forecasting and predicting movements in the forex market, there are many services available online.

If you would like to become more proficient in Forex chart techniques (and I highly recommend you do), joining a service that provides charts via the Internet, and assistance in reading and analyzing the chart information, this can be very helpful and profitable in the end.

So let us not talk a little about the different types of Forex Charts Line Charts The simplest form, based upon the closing rates (in each time unit), forming a homogeneous line. (Such charts, on the 5 minutes scale, will show a line connecting all the actual rates every 5 minutes).

This forex chart does not show what happened during the time unit selected by the viewer, only closing rates for such a time. Line Charts are the best simple way to chart for support and resistance levels.

Point and figure charts

Point and Figure Charts are charts based on price without time. Unlike most investment charts, point and figure charts do not present a linear representation of time. Instead, they show trends in price. A rising stack of Xs represents increases, and a declining stack of Os represents decreases.

This type of chart used to filter out non-significant price movements, and enable you (the trader) to determine critical support and resistance levels quickly.

Bar Chart

This chart shows three rates for each time unit selected: the high, the low, the closing (HLC). There are also bar charts including four rates (OHLC, which includes the opening rate for the period). This chart provides clearly visible information about trading prices range during the time period (per unit) selected (very valuable information).

Candlestick Chart

Kind of chart based on an ancient Japanese method. The chart represents prices at their opening, high, low, and closing rates, in a form of candles, for each time unit selected. The empty (transparent) candles show increase, while the dark (full) candles represent decrease.

The length of the body shows the range between opening and closing, while the whole candle (including top and bottom wicks) show the whole range of trading prices for the selected time unit. Pattern recognition is a field within the area of “machine learning”.

Alternatively defined as the act of take in raw data and taking an action based on the category of that data. As such, it is a collection of methods for “supervised learning”.

A complete pattern recognition system consist of a sensor that gathers the observations to be classified or described; a feature extraction mechanism that computes numeric or symbolic information from the observations; and a classification or description scheme that does the actual job of classifying or describing observations, relying on the extracted features.

In general, the forex market uses the following patterns in candlestick forex charts:

Bullish Patterns - hammer, inverted hammer, engulfing, harami, harami cross, doji start, piercing line, morning star, morning doji star.

Bearish Patterns - shooting star, hanging man, engulfing, harami, harami cross, doji star, dark cloud cover, evening star, evening doji.

Note: Keep in mind these are just general and not all-inclusive as the forex market is huge and are so with the charts and techniques.

Let us now look at the 5 top errors made where forex charts are concerned and why you should stay away from them.

1. Predicting with Forex Charts

A common mistake made by inexperienced forex traders (and some more seasoned),is thinking they need to predict to get profitable results - but of course this is simply hoping or guessing and is destined to see you lose. If you use charts the correct way, you will trade using the price changes and trends, you will not need to predict.

There is a big industry in forex trading that says prices move to a scientific theory and you know what will happen next - but of course, if prices did move to science, we would all know the price in advance and there would be no market.

Do not set yourself up and believe the prediction nonsense - make all your trades using reality of price change i.e. if a price comes to support, don’t predict support will hold, wait for it to move the other way and trade based on the fact it has held.

Another great way to trade is to trade now breakouts to new highs or lows - it is a proven fact that most big moves start from these breakouts, so you should make breakouts a consistent part of your forex trading strategy.

2. The More Inputs the Better

You may think five or six indicators must be better than one or two - very wrong!

The more inputs the more….



Thanks to Orlando Thompson for contributing this article to our Currency Trading blog:

Trade Foreign Currency Online

As currency trading has become one of the most recent ways of earning money, a large chunk of people take this option just as a hobby. This type of trading is performed by exchanging currency of one country with that of another. Currency trading, Forex trading signal, Forex trading strategy, and Forex alerts have made this industry the largest one if one is to consider its trading volume. To understand it better, let us take an example of an inter-bank trading. Bank X will take the quote from Bank Y of its currency, and Bank Y will provide the present rate of its currency. A deal will be finalized if Bank X will like the rate of Bank Y. and if the currency of Bank X rises against the currency of Bank Y, the former will enjoy the difference as its gain. Likewise individuals deal in the exchange of currencies in the Forex market and act according to the market position.

The Foreign Exchange market is popularly known as “Forex”, which has become the largest and frequently rising market in the whole world. It is also called as the transnational market as any person from any part of the world can enter into this market through the use of World Wide Web. Forex trading signal, Forex trading strategy and Forex alerts are carried out in the faith that the prices of the currency will change over a period of time, and the Forex traders will earn a profit if there is a rise in the value of bought currency and that of the selling currency.

There are various Forex trading strategies that should be followed by every Forex trader in order to gain a large number of profits. This Forex strategy system includes:

• Ability to read or know the Forex trading strategies

• Adopting reliable and effective Forex trading strategies

• Implementing Forex trading strategies without involving costly software

• Taking the option of simple moving

• Deriving resistance and support levels

The Forex traders should not indulge themselves in adopting complex strategies but should focus on easy and simple strategies in order to implement them as soon as possible and enjoy the results. Moreover, there are various companies that offer the services of working on behalf of the traders and providing them with simple Forex trading strategy. Online Forex alerts are also a helpful for people trading in the Currency trading market as up-to-date position of the market is revealed.

Consistent and efficient strategies should be employed so that even if the market is facing small changes, it should not hit or affect the plan of the Forex strategy system. The best part about entering this field is that this profession can be taken by any person regardless of his or her educational background. But while Forex trading strategy proves to be a successful profession, it carries high level risks as well. So, while entering the field of currency trading, it is advisable that the traders should consider their objectives with great care so as to eliminate the possibility of facing losses. Also, one should take advice regarding the risks involved in the Forex trading strategy from financial advisors to gain heavy profits.

For more information on Forex, Forex signal, Forex strategy system, Forex trading signal, Forex trading strategy, Forex alerts and Currency trading, log on to www.Connection2forex.com

Tags: forex, forex signal, forex strategy system, forex trading signal, forex trading strategy, forex alerts, currency trading.



Thanks to Maco for contributing this article to our Currency Trading blog:

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