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« Forex Education - 20 Questions That Will Tell You If You Can Win At Forex Trading!»
Forex Trading Guide - Opening Your Forex Account And Maximizing Your Chances Of SuccessChoosing Your Account TypeIf you are trading the Forex part time as a (hopefully paying) hobby, then you can open an account in your own name. However, if you intend to trade the Forex full time, as a full time income earner, then it is best to open a business account. Of course you can use your own name as the name of your business. Opening a business account makes it easier when dealing with the IRS (HMRC in the UK).
You will also need to decide whether you want to open a standard account, (dealing in standard lots of $100,000) or a mini account (dealing in mini lots of $10,000), or if available, a micro account (dealing in micro lots of $1,000). Always aim to open the smallest account possible when you first start trading. If you want to trade with larger amounts, you can simply trade with more than one lot at a time.
Make sure you read, and understand the fine print. Also make sure you open a Forex Spot account, and not a “forward” or “futures” account. After all, you want to be able to trade in real time.
You will most likely need to print and fill out paper forms, and mail or fax them back to your broker before you can start trading. When your broker has approved your application they should contact you with instructions on setting up your account. They will also explain how you can fund your account. They should also send you your user name and password so you can log onto your account online.
Warning: Only trade with real money after at least two months practice with a free demo account.
Maximizing Your Chances Of SuccessYou must be realistic. Although the Forex has the potential for making large profits, it is not a get rich quick scheme. You are not going to profit from all of your Forex trades. Even the most experienced Forex traders sometimes get it wrong and make losses. The best you can aim for is to make more profitable trades than losing trades.
Don’t trade with money you cannot afford to lose. You should have at least 10 times your margin in your account. If you lose all the money in your Forex trading account, it should not leave you broke, without cash to buy food or pay your electric bill. Do not expect to open an account with a couple hundred dollars today and become a millionaire by tomorrow.
In reality, only a very small number of Forex traders are successful. The reason most traders fail is because of one or more of the following:
They do not have the discipline to demo trade for long enough.
They expect to profit from every trade.
They are reckless, and trade with money they cannot afford.
They let their emotions influence their trading strategy.
They trade with margins that are too small, i.e. too much leverage.
They don’t take their trading seriously enough, and don’t trade in a businesslike manner.
They try to make bigger profits by taking unwise risks.
They start trading with (and losing) real money, before they have learnt their craft properly through demo trading.
They start trading with multiple currency pairs, before they are competent with just one currency pair.
It is essential that you become competent demo trading, before you risk one penny of real money. Would you expect to become a doctor, surgeon or a lawyer overnight? So don’t expect to become a competent Forex trader overnight.
Make Money and Be Successful in Forex TradingTo a newbie learning Online Forex Trading, it looks very simple in the beginning. Take currency pair EURUSD for instance, if you bullish on Euro, simply place a Buy order. Bearish on EUR, just short it. So easy, you may ask? The truth about Forex Trading is that it is a professional activity that not many traders will succeed in.This being the first article, I will just go through a few very straight forward pointers on how to consistently generate Forex pips.In the world of Forex currency trading, many newbie traders believe that Forex trading software or system that contains rocket science is more likely able to make money. It may be true, but how many of us will be able to find such a system or methodology? Why not just spend time and money to learn systems or trading methods that are simple but works?In the Forex currency trading, the fact is simple systems just work best. Simple systems are more robust and easier to trade as you understand the logic and can therefore follow it with confidence when you are in a losing streak.I personally feel that it is much simpler to trade with the trends rather than the ranging market. For many successful traders, once they are happy with a system or methodology, they stick with it. Remember, you only make money trading Forex, and not having 100 systems or trading methodologies but trading none of them.In Forex trading, most traders succeeded primarily due to good money management. So long as your system or trading methodologies has a positive profit factor coupled with proper money management, you will succeed in the long run.Forex Trading Guide - Opening Your Forex Account And Maximizing Your Chances Of SuccessChoosing Your Account TypeIf you are trading the Forex part time as a (hopefully paying) hobby, then you can open an account in your own name. However, if you intend to trade the Forex full time, as a full time income earner, then it is best to open a business account. Of course you can use your own name as the name of your business. Opening a business account makes it easier when dealing with the IRS (HMRC in the UK).You will also need to decide whether you want to open a standard account, (dealing in standard lots of $100,000) or a mini account (dealing in mini lots of $10,000), or if available, a micro account (dealing in micro lots of $1,000). Always aim to open the smallest account possible when you first start trading. If you want to trade with larger amounts, you can simply trade with more than one lot at a time.Make sure you read, and understand the fine print. Also make sure you open a Forex Spot account, and not a “forward” or “futures” account. After all, you want to be able to trade in real time.You will most likely need to print and fill out paper forms, and mail or fax them back to your broker before you can start trading. When your broker has approved your application they should contact you with instructions on setting up your account. They will also explain how you can fund your account. They should also send you your user name and password so you can log onto your account online.Warning: Only trade with real money after at least two months practice with a free demo account.Maximizing Your Chances Of SuccessYou must be realistic. Although the Forex has the potential for making large profits, it is not a get rich quick scheme. You are not going to profit from all of your Forex trades. Even the most experienced Forex traders sometimes get it wrong and make losses. The best you can aim for is to make more profitable trades than losing trades.Don’t trade with money you cannot afford to lose. You should have at least 10 times your margin in your account. If you lose all the money in your Forex trading account, it should not leave you broke, without cash to buy food or pay your electric bill. Do not expect to open an account with a couple hundred dollars today and become a millionaire by tomorrow.In reality, only a very small number of Forex traders are successful. The reason most traders fail is because of one or more of the following:They do not have the discipline to demo trade for long enough.They expect to profit from every trade.They are reckless, and trade with money they cannot afford.They let their emotions influence their trading strategy.They trade with margins that are too small, i.e. too much leverage.They don’t take their trading seriously enough, and don’t trade in a businesslike manner.They try to make bigger profits by taking unwise risks.They start trading with (and losing) real money, before they have learnt their craft properly through demo trading.They start trading with multiple currency pairs, before they are competent with just one currency pair.It is essential that you become competent demo trading, before you risk one penny of real money. Would you expect to become a doctor, surgeon or a lawyer overnight? So don’t expect to become a competent Forex trader overnight.Forex Education - 20 Questions That Will Tell You If You Can Win At Forex Trading!Forex trading isn’t easy and you wouldn’t expect it to be with the rewards on offer but its not hard either - if you get the right forex education. If you look at the questions below and answer them correctly yes or no, you are learning forex trading the correct way and likely to be successful.10 Questions you must answer NO to below:1. I believe the more knowledge I acquire and the harder I work the more successful I will be.2. Complicated systems are more likely to successful than simple ones.3. The more news stories I study and trade the more chance I have of making money.4. Day trading is a great way to make money.5. Markets move to a scientific theory because human nature never changes.6. You never go broke banking a profit.7. You need to predict markets in advance to win at forex.8. I can buy an e-book from a guru and just follow it they know best.9. If I am always in the market the better my chances of success as I wont miss a move.10. Buy low and sell high is a great way of making money.If you agree with any of the above statements you will lose money.They are all common forex myths believed by the 95% of traders who lose money.If you answered no congratulations - you’re learning forex trading the right way.Now - here are 10 questions you should answer YES to.1. I know that success comes from within and no one else can give it to me.2. If I devise my own trading strategy I will acquire confidence and discipline.3. Simple systems work best as they are more robust than complicated ones.4. Forex trading is not a game of science it’s a game of odds.5. I need to run the long term trends to make money all short term.6. All short term daily volatility is random and is un-tradable.7. I don’t predict market moves I simply respond to the reality of price changes.8. I buy markets when they break to new highs because most big moves start from new market highs NOT market lows.9. I trade infrequently and only trade high odds set ups.10. I don’t need to acquire lots of knowledge just the right knowledge then I am done.Did you answer yes to the above questions? - then well done! Your learning the right forex education.Now if you have got them all right so far, here is one final question to determine if you are likely to be a winner:My trading edge is (defined)If you don’t know what your trading edge is - you don’t have one!Your trading edge is the reason you will succeed and the vast majority fail.Forex trading is all about getting the right forex education, ignoring the myths and focusing on the right information.You need to build a system you can have confidence in which will give you the discipline to trade for long term success through inevitablelosing periods.The rewards of trading forex are immense and the amount of money you can earn can be life changing and if you get the right forex education you can enjoy long term currency trading success.If you have the desire to be a winner and can accept you are responsible for your own destiny then the vast rewards of forex trading await you.Day Trading - 100% Losses GuaranteedFebruary 1st, 2008Forex day trading is simply one of the best ways to lose your money and the logic it is based on is absurd and common sense should tell anyone why it doesn’t work. Yet year after year day traders trade and lose using day trading methods. Lets look at why.Before we look at why day trading doesn’t work lets first look at all the systems that supposedly make money on the net. They don’t make money in real trading though it’s all simulated made up track records using past data.If you see a day trading system which claims that it makes money simply look for the following in the small print at the bottom:“CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.The above disclaimer simply means nothing in terms of future profitability. Why?Because if you want to make up a track record using past history - anyone can do that.If we all knew prices in advance we would all buy the bottom and sell the top and never lose any money - in fact we would all be multi millionaires. Shame it’s not that easy though!We have to trade without knowing what will happen and that really is a lot harderDay trading is a good story and marketing companies know this so why not write some hyped up copy to appeal to greedy traders, make up a great track record and then sell it to the unsuspecting trader?That’s what happens and time and time again the novice trader falls for it - He thinks he is going to make his fortune by handing over a few hundred bucks and then he gets his lesson in reality his equity is lost.So let’s look at why day trading is a loser’s gameThe reason day trading doesn’t work is that the logic it is based upon is absurd - think about this:We have millions of traders, all with different motivations and forex trading systems and day trading is supposed to allow you to gauge what this vast diverse mass of emotional beings will do so you can enter trades on a tick chart?Its common sense this cant be done and that’s why over the longer term day traders lose.All volatility in daily time frames is random, support and resistance levels cannot be used and you cannot get a trading edge so you will lose.If you can’t get the odds in your favor you will lose periodAvoid forex day trading unless you want to lose your money and lose it quickly.Leave it alone and trade the longer term trends where you can get a trading edge and you can get the odds in your favor - Period.Forex Beginner Trading Guide - The Dangers Of Forex TradingCan You Afford To Trade The Forex?When you start trading in the Forex, you must treat it as a business and not as a form of gambling. The number one rule in Forex trading is - “Never Trade With Money You Cannot Afford To Lose”. That means you don’t trade the Forex with money you have set aside to feed your kids, or your mortgage or rent money.If you trade the Forex with money you need for essentials like food, clothing, or utilities, you are gambling. If you cannot afford to lose the money you use to trade the Forex, you will make unwise decisions and you will lose your money - that is 100 percent guaranteed!You Won’t Always Make A ProfitWhen you start, you must be realistic. You will make a profit on some trades and you will make a loss on other trades. Not even professional currency traders make a profit with every Forex trade.Perhaps you have heard of trader Nick Leeson. (Nick traded mainly in futures, in the days before Forex trading became popular. Futures trading, follows much the same rules as Forex trading, in so far as you buy a currency, security, commodity, etc. in the expectation that its value will increase in the future.) Nick worked for a bank, and during the early 1990’s he made some spectacularly successful trades. In just one year, he earned over 20 million dollars for his bank and it seemed he just could not lose.However by 1992 he started making losing trades and lost around $4 million. Although at that stage he was still ahead of the game. But, two years later in 1994, his losses had increased to $400 million, and he begun stealing from his bank to keep on trading. Because he was so desperate to succeed, he became increasingly reckless, making ever larger and more spectacular losses. Until by February 1995 his losses amounted to $1.4 billion. This was more than the entire assets of his bank, and the bank went broke in February 1995, and Nick ended up in jail for fraud.As long as you can make more profitable Forex trades, than losing trades, you should expect to turn an overall profit, and make a success of your Forex trading.The best way to improve your trading skills is to open a free demo account and “paper trade”, that is trade using virtual money, for at least two months before you invest a penny. You need to learn how to identify profitable trades, using currency charts and by studying trends. Make sure you can make at least two out of three profitable trades before Forex trading with real money.All reputable Forex brokers provide free demo accounts where you can learn to trade profitably. After all, it is to their advantage if you are ultimately successful, because then you will become their long-term client. It is also best, if you use the demo account provided by the broker you intend to use. Then you will become familiar with the way they do business and how best to interpret their currency charts etc. All of which will maximize your chances of success, trading the Forex.You might discover, when starting to trade the Forex using real money, that you are less successful than when using virtual money. This usually occurs because you are letting your emotions (fear of losing) interfere with your reasoning. You must always rely on the results of your analysis when trading, don’t be influenced by gut feelings or hunches. To avoid this happening it is best if you develop a trading system using your free demo account - and always stick to your system.A Great Forex Trading Indicator - Try This StrategyForex trading can be tough if you do not know what you are doing. That is why I have provided the following simple yet helpful forex trading strategy. The Simple Moving Average (SMA) is an extension of the trend line concept. The SMA is plotted on a graph by the charting program of the forex market data. The SMA takes the average of the close price of a given number of the last few periods. Any number of periods can be selected. You can have a SMA 5 or an SMA 20. An SMA 5 will take an average of the previous 5 close prices on the chart and will plot it on the chart along side the other price data. Each bar will use the previous 5 bars worth of data to calculate a point and plot it on the graph.If the SMA is generated using a large number of periods (like an SMA 50 or SMA 75), you could interpret it similarly to the trend line. But if you select “faster” SMA’s (like SMA5 or SMA20), you need to use a different strategy.I am about to give you a strategy using the SMA. It is called the SMA Crossover Method. The SMA is one of the most commonly used indicators and can be found on almost any charting package. When you plot the SMA, you will be able to slect a line color to plot it. Make sure to use a different color than the actual prices on the chart.Step 1: Plot an EMA5 using blue (or any color you like).Step 2: Plot an EMA20 using red (or any color that is different than step one’s color).You now have two SMAs plotted on the chart. You also have two signals.Buy Signal: When the SMA5 Crosses the SMA20 moving upward.Sell Signal: When the SMA5 Crosses the SMA20 moving downward.The beauty of this method is that the price of the currency pair cannot go up significantly without triggering the buy signal.This was a very simple and practical indicator that should really improve your trading results as you implement the strategy outlined above. If you are looking for a really good to set forex trading strategies click on the link below. Good luck trading.Forex Brokers - The Perfect Service for Novice TradersIf you are considering trading with a forex broker, here is news of a service that is great for seeing if you have what it takes and is much more realistic than a demo account. If you are interested in trading and worried about the risk, then these accounts look a great way to get started.A protected account introduces potential traders to the lucrative world of currency trading - but unlike a demo account, allows them to feel what trading is really like with limited risk.For a set period they get to trade as much as they like with a set leverage and can even trade with a negative balance at the end of the set period - any profits the trader keeps any losses the broker covers.Low Initial DepositThese accounts can be traded with a small amount and the only risk is the initial deposit and unlike a real trading account, if you go debit you still can trade for the period the account is set up for.Leverage and Low RiskAt any point during the two-week period, a trader may control up to 100 times his initial deposit, regardless of the actual balance in the Protected Account. The trader may make as many trades as desired, 24 hours a day, using any currency pair.At The End of The Period - clients TakesAny Profits Broker Covers Any Losses.Positions are closed automatically at the end of a set period normally after two weeks.If there is a positive balance, it will be transferred to the forex trader’s regular account. If there is a negative balance, the broker covers it.Getting the Feel Of Trading With Limited RiskA regular demo account, though a very useful tool, for learning a trading platform or the basics of trading does not simulate the feeling of trading real money.A Protected Account acts as a step up between a demo account and a real one, providing an authentic trading experience, with managed risk which many traders want, so they can test their skills before opening a full trading account.Any trader will tell you that trading with money on the line is totally different to trading a demo account, as your emotions are involved, discipline needs to be kept and this is why 90% of traders who win with a demo account lose real time. A protected account lets traders feel what its like to trade for real, with a small risk, unlimited trades and limited risk in the period which is a great way to see if currency trading is for you.
