Forex Analysis: When to Trade

In any discussion of forex trading you will see discussion of the two main types of forex analysis. These are technical analysis, where trading is based on historical and mathematical factors such as price charts and indicators, and fundamental analysis, where traders pay more attention to economic factors such as financial and political news.

Which one of these will give you more successful forex trading signals? It is a difficult question and the answer is not agreed by all traders. If you look around the internet you will probably find more discussion of technical analysis but that is partly because there is more to get a grip on. Beginners are frequently advised to identify trends on price charts and then trade on the basis of those alone. This is one of the easiest ways to begin forex trading and it can be successful.

Fundamental analysis depends on knowledge and news of the constantly changing real world. This makes it more difficult to take into account if you are not in the habit of checking out the financial section of your newspaper. However, there is no doubt that ultimately it is the economic factors which cause major price movements. Advocates of fundamental analysis will argue that any evidence on charts is historical and not predictive. In other words, the charts tell you what happened 5 minutes ago but not what is coming next.

One thing is for certain. Major financial reports and other events of national or international importance can have a huge and sudden effect on currency prices. So even if you prefer the technical method of forex analysis, it is wise to keep an ear to the ground and avoid being trapped in a bad trade when the US government announces a change in interest rates and the dollar leaps or plummets by 50 pips or more.

It can be helpful to think of price movements in the forex market as having a kind of elasticity. They are constantly stretching out to certain limits and then moving back, not necessarily to their starting point but often less or more. The fundamental factors are what make the prices move but technical analysis can be used to predict how far they are likely to stretch and when they are likely to start to reverse.

So the bottom line is that the best way to profit from forex trading is to make use of the technical tools such as charts and indicators but at the same time, be aware of the fundamental factors that are the real driving force behind any trends. The successful forex trader will be comfortable with both types of forex analysis.

10 Things Every FX Trader Must Know to be Successful

A successful FX trader knows these 10 rules of foreign exchange trading. Print out this list and take these tips to heart, and you just might make it in the risky world of forex trading.

1. Drop the Get Rich Quick Mindset

Far too many people are drawn into currency trading because they think they can make quick and easy money. They start out right away with real money, take big risks, get wiped out in no time at all and start saying the whole thing was a scam. Get real! Forex is not a get rich quick scheme. Be prepared to work on the next 9 factors or get out now.

2. Seek Out Forex Training from Established Teachers

A successful FX trader never stops learning. You will want to read and watch pretty much everything that you can get your hands on at first.

3. Focus on Trading Disciplines, Not Systems

Newbies always want the best forex trading system, but it does not exist. There are many good systems but the market is constantly changing so first one and then another will come out on top. Pick one good system and stick with it as long as it continues to make you profits in the long term.

4. Frequent Forums for Support While You Learn

Family and friends may or may not be supportive but even if they are, there will be times when you need help from other forex traders. Find a good forex forum and visit often enough to know who is who. If you can find a mentor, that is great, but watch out for expensive coaching programs that often do not live up to the hype. Once you feel confident, be sure to help other newbies who are just getting started.

5. Discipline

Keeping to your trading plan requires discipline. If you can develop strong self discipline you have a very good chance of making money with forex trading. If not, you will almost certainly make a lot of bad decisions on the spur of the moment and lose your capital.

6. Patience

Depending on your system, you may sometimes have to wait a long while until the market comes up with a trading signal for you. Do not be tempted to make a side trade that does not fit your system.

7. Tight Risk Management

Always apply stops and put strict limits on the amount of funds that you risk per trade. This can be as low as 1% or 2%, never more than 5%. Set your risk level and never increase it. If you start toward the top of the range, decrease your percentage risk as your funds increase by keeping your position size the same.

8. Maintain Emotional Control

You need to be able to stay calm and apply your plan even after a large loss, and never allow yourself to be motivated by greed or fear of loss.

9. Set Realistic Goals

It is important to track your profits and losses so that you can see how your system is performing, but do not become hooked on the idea of trying to make bigger and bigger profits. A profit of 5% to 10% per month is excellent. Any more and you are likely to be taking risks that could wipe out your whole fund.

10. Forget Thrills

When you start out, forex trading can be exciting. However, profitable currency trading soon becomes boring. If you are going to be a successful FX trader you must say goodbye to excitement and operate a low-risk strategy.

Forex Demo Trading May Be Bad For Your Financial Health

Since brokers began providing free forex demo accounts, forex demo trading has received a lot of attention. It is generally recommended without reservation both for beginners and for more experienced traders who want to test new systems. But is it right for all circumstances, or does it sometimes have disadvantages? Could too much forex demo trading be bad for your financial health? We look at the pros and cons of demonstration accounts so that you can make up your own mind.

First let’s look at what’s in it for the broker. Why do they let you play around with their system, using their resources, for free? The main reason, of course, is that they are hoping you will sign up for a real account. If you are a beginner, they want to get you making money on a practice account so that you get real excited about putting in your own money. If you are already trading, they want you to see how great their platform is so that you will consider switching your account.

There is nothing wrong with any of that. Practicing trading is a great way to learn. In fact, if you were to read a couple of books on forex and then start trading for real right away, pretty much anybody would tell you that you were crazy. So the main advantage of a practice account is that it lets you test out a broker’s services or a system without any risk.

The problem comes if you do not realize that there is a difference between trading virtual money and trading for real. In your demo account, you are likely to take bigger risks than you would take in real trading. If you are lucky and do well on those trades, you could become overconfident. You could think you had mastered forex trading when really you were just starting out. So you put all your savings into a live trading account, start to try to follow the same system, and bang! The risks were too high, the stress was too great, a couple of losing trades and you are wiped out.

So currency trading demos can be very useful, but they have to be used right. From the moment that you open a demo account, remember that it is very important to stay disciplined. Use a system, follow a trading plan, make a big effort to act as if that was your money. Then switch to real trading once you can see a pattern of profits and losses, with an overall gain. At that time you can open a micro account and start trading very small sums. That is the best way to use a forex demo trading account.

Strange Forex Secret (private training video)

If you’re still losing money trading Forex, then you need to see this brand new, complimentary training video fresh from the recording studio of one of the most respected Forex trainers around.

In it, he reveals the REAL REASON most traders just like you keep on losing… and then shows you, step-by-step, how you can FIX any trading method you’re currently using.

Once you see what it is, you might think it’s a little “strange”, but after I saw it I was surprised more struggling Forex traders haven’t been told about this.

Here’s a hint:

* It’s all about how to “–A– -I–”.

Once you figure it out, you’ll be surprised you ever traded without this technique.

Go here for your “invite only” access to a brand new, private training site where you can see this video:

Strange Forex Secret Private Training Video

Make sure you watch it today. This is definitely one of those time-sensitive videos that I don’t expect to stay
online forever.

Good Trading,
Drew

Is Forex Trading the Best Way to Make Money From Home?

With more people every day losing (or giving up) their day jobs, it is not surprising that everybody wants to find the best way to make money from home. Having your own business or working freelance can give you financial freedom while you stay home with your family.

There are so many options it can be hard to find the best one for you, but in our opinion forex trading is right up there among the best of them. Why? Well, let’s take a look at the advantages of forex, otherwise known as foreign exchange or currency trading. What’s in it for you?

1. When you start out, you can trade currency at the same time as holding down a nine to five job, because the forex market is open 24 hours a day. It’s even better if your day job involves working weekends because the forex market is closed at that time.

2. Starting out is simple. All you need is a computer and a broadband internet connection and you can sign up with a broker or market maker to start trading through their forex software platform.

3. You do not need a lot of money to get started. In the past, forex trading was only for the big financial institutions and the rich. These days, since the internet opened up the market to everybody, brokers are letting you get started with a few hundred dollars or even less.

4. There is no need to spend thousands of dollars on training. You can learn fast and cheap from online forex courses that will explain how the market works and how to operate a profitable trading system. You can even gain experience with no risk by using a practice account, available for free from most brokers.

5. You are in complete control of your schedule. Depending on the system you choose, you may only need to check the markets once a day. On the other hand if you like quick profits and enjoy the excitement of a fast moving market, day trading systems can give you several profitable trades every day.

6. The forex market is so huge (bigger than all of the world’s stock markets added together) and there are so many possible currency pairs to trade that you will almost never suffer from a lack of trading opportunities.

7. Forex brokers offer up to 200 times leverage which means that you can control sums that are 200 times the amount that you have put at risk. This means that a small account balance has the power to make you a lot of money. It also means that you can lose very fast, so be sure to set stops to minimize any losses. Like all lucrative speculation, forex trading is risky!

Of course if you are not a risk taker and like the security of earning the same salary every month, then forex trading will not be right for you. A successful trader may earn $20,000 one month and $5,000 the next, or even make a loss. But this is true of just about anybody who works for themselves and it does not affect that fact that forex trading is arguably the best way to make money from home.