Forex Trading Secrets
All materials from http://secretforextrading.com/
July 29th, 2009 by Forex Admin | No Comments | Filed in Forex basics
or Foreign Exchange is nothing but a market where corporations, nations
and retail investors exchange their money to make a profit. Though the
smallest increment in the Forex, the pip, has only a value of 0.0001 of
a dollar in most cases, its value quickly adds up to huge profits or
losses, due to the fact that trillions of dollars are exchanged in the
Forex market which is open 24 hours a day, 6 days a week. Added to
that, Forex is one of the most exciting, highly volatile and attractive
investment markets in the world.
To explain the exchange of currencies let’s take the following
example. If an organisation in the U.S. wants to send money to their
office in Europe, they have to convert their U.S dollars into Euros, as
one U.S. dollar does not have the same value as a Euro. In order to
convert the money, the organisation has to buy Euros with their U.S.
dollars through the Forex market. The transaction has to be made in
pairs, which means that the organisation has to buy the USD/EUR
currency pair to send money to its office in Europe. The converted
value of the money depends on the current value of the currency pair in
the market. If the USD/EUR has a current value of 1.2500USD, then the
organisation will obtain 80,000 Euros if it converts $100,000 at the
Now coming to the pips, one movement of the above transaction will
equal $10 (0.0001 x $100,000). If a trader moves in and out of a
position quickly, it is possible for him to make a profit even if the
price fluctuates by a few pips. Although it is possible to make a
substantial profit in the transactions, making an equal loss is also a
Because of the huge amounts invested and the strict rules and
regulations of the Forex, trading in this market was restricted until
recently to corporate giants, central banks and big investment firms.
But now, due to advances in technology and relaxation of rules, Forex
market is open to retail investors also. An investor can now secure a
position with just 1/100th of the total amount traded. On the other
hand the probability of losing the investment is high due to the highly
volatile nature of the market.
However, with careful analysis and using different strategies,
charts and trading systems, it is possible for a trader to determine
when to enter and exit a position to make a profit. Though it is
possible to make unlimited profits, because of the unpredictability of
the Forex market, stops are placed on orders to prevent losses. Even if
you are a seasoned trader and use a proven system, it is always wise to
place stops on each and every order, as the market can swing
unexpectedly sweeping away your investment in the blink of an eye.
The non-stop excitement and the potential to make unlimited profits
are the main reasons for the popularity of the Forex. On the other
hand, Forex is a high risk market where millions are made and lost
every day. If you are a beginner, with hopes to make your millions, it
is better to start with a dummy account to gain enough knowledge before
entering the real, highly volatile but extremely profitable Forex
April 26th, 2009 by Forex Admin | No Comments | Filed in Forex risks, Forex strategies
any business, especially forex trading, you have an equal probability
to lose as to win. Losses are unavoidable as nobody can predict the
future. There are only three possibilities in trading, a win, a loss or
a break-even. Once a trader has the misfortune to run into a series of
losses it triggers a destructive behaviour on his part to get away from
the misery of his situation. A simple forex trading secret
says that the destructive behaviour starts when one indulges in
activities that may seem harmless in the beginning. On excessive use,
the activities become uncontrollable which puts your physical and
mental health at risk. Smoking, drinking and indulging in other harmful
activities are a few examples. Though these activities seem to help you
with your situation, they only serve to cover up your problem and does
nothing to solve it.
Sadly this is not a good approach to your problem with your forex trading account.
To get rid of your misery, the first step is to acknowledge your
destructive behaviour and take steps to put a stop to it. Instead of
ruining your health and being forced to take action when the situation
gets impossible, it is better and easier to put a stop to your
destructive actions as soon as possible. The only way to solve your
problem is to face it. Be honest with yourself and analyze the reasons
for your failure. You cannot succeed without hard work, dedication and
determination. Review your steps to find out where and what you have
done wrong. You have to review both your system and yourself. Minimize your risk to make things easier for you here is a checklist to review yourself and your system.
Checklist for your system:
Checklist for You:
• Did you check your system or software thoroughly before trading?
• Did you use an out-of-sample data to check your system?
• Did you check your system code?
• Where you over-enthusiastic and over-optimized your system?
• Did you start with a small initial investment before going for higher transactions?
• Are you aware of the limitations of our system?
• Do you even have a system to help you in trade?
• If you do not have a system, how do you know that your strategy will be profitable?
• How comfortable are you with your system and your signal service
• Is the current drawdown performance of your system satisfactory?
• Are you aware of the risks in using your system?
• Are you trading with comfortable amounts that you can afford to risk
• Are your goals realistic?
• Are you over-dependant on your performance?
Your failure or success depends equally on your trading system and
your emotions. Once you go over the checklist and find the cause for
your problem, it is time to take action to solve it. Unfortunately
there is no easy way to fix your problem, whether it is emotional or
your system. It entirely depends on your determination and drive to
succeed. Make sure to keep your health, both physical and mental, in
top condition as well as your trading system.
Tags: forex losses, investment losses
April 26th, 2009 by Forex Admin | No Comments | Filed in Forex basics
Investors and entrepreneurs are moving away from conventional financial markets such as commodities futures,
bonds, stocks and other commodities and prefer to invest their money in
the Forex market. The reason behind this migration is due the fact that
the Forex market has lucrative and far better benefits when compared to
any other type of financial market.
The power of Forex market
is such that even a seasoned Commodities or Stocks trader will find out
in a short time the advantages of Forex over their traditional trading
avenues. It is possible for you to make up to $3000 by trading in the Forex
market for just 30 minutes everyday. When compared to futures market,
trading currencies in Forex market involves less risk. It is also far
easier and more profitable than trading stocks.
Following are some of the benefits of trading in the Forex market.
• The most unique feature of Forex market is that it is open 24 hours a
day. Unlike trading stocks where you have to wait for an opening bell,
you can buy or sell currencies whenever you want in the Forex market.
This also gives you the added advantage of choosing the right time to
make your transactions.
• Forex market has a huge trading volume in the range of about $1.5
trillion. The Forex market is about 30 times larger than all of the U.S
equity markets put together.
• As far as Forex day trading
is concerned, you can make a profit out of a raising market, as well as
from a falling market. This is because you have the power to decide
whether to buy or sell a currency after carefully analyzing the market
• You can trade in the Forex market from anywhere in the world. If you
have a computer with an internet connection, you can make your
transactions from anywhere.
• Forex trading requires considerably less initial investment. You can
even start your Forex career with an investment of as low as $300. Once
you learn the ropes of the trade and make a success out of your
strategy, you can increase your trade up to 200 times your initial
investment. Moreover in Forex market you just need to post a meagre 1%
margin when compared to a 50% margin in the stock market.
• The price movements are easily predictable in the Forex market.
Though the price movement themselves are highly volatile, the foreign
currency market follows a pattern that is easily predictable with
proper technical analysis.
• In Forex trading you don’t have to pay any commissions to brokers on transactions.
To sum it up, Forex trading has far more advantageous than other
trading platforms and gives you more control over the features and
freedom to choose. You can make huge profits if you know what you are
Tags: forex market
April 13th, 2009 by Forex Admin | No Comments | Filed in Forex software
Forex trading has become one of the most coveted businesses in recent times. The advent of internet has made Forex trading accessible
to everyone. The convenience of setting up a business at home with a
computer and internet connection, without the hassles of employees,
customers or inventory and lure of making huge profits is the reason
for the growing popularity of Forex trading. But many forget an
important fact when they decide to enter the Forex market.
Studies show that only about 5% of the retail Forex traders are able to make consistent profits. Consistent profit in Forex is possible
only if one has an in depth understanding of the various factors that
influence the market like global economy and other technical factors.
Jumping in without taking time to gain knowledge of the Forex market
will only land you in trouble. A little time and effort taken to follow
a professional trader’s guidance is one way of learning the trade. You
can subscribe to a free Forex trading signal website to receive news
updates and information about the market, which you can use to make the
right decisions in live trades, after testing their reliability with
your trading account.
The daily news on economy from different sources of media that is
just used as a conversation material among friends can be used to make
profits in the Forex market. This can be done with proper training that
teaches you how to interpret the information into trading terms to be
used for your benefits in the Forex market. Converting information of
little value to solid gold can be referred as ‘forex news trading
alchemy’. Extensive training and experience is needed to make this
interpretation which is called Forex trading signal.
Tags: alchemy forex
April 13th, 2009 by Forex Admin | 1 Comment | Filed in Commodities, Currencies, Futures
A futures commodities contract between two parties is a legal agreement
to buy or sell a particular financial commodity in the future for which
the exchange, quantity and price are predefined. The two parties will
also agree on a specific date and time in the future to make this
transaction, which is called as the ‘settlement date’. An option
contract between two parties is a legal agreement that bestows the
buyer, who pays the ‘premium’ or the market price within a particular
time period, the right and not the obligation to exercise his option.
A buyer can exercise the option when he has signed a futures
contract agreeing with a particular price called ‘strike price’ or the
options contract can give the right to buy or sell the commodity
directly. In the United States, an individual or firm has to trade on
your behalf the futures contracts and options on futures contracts in
the exchange. This individual or firm has to be registered with the Commodity Futures Trading Commission.
Tags: Commodities Futures
April 12th, 2009 by Forex Admin | No Comments | Filed in Currencies, Dolar, Yen
Though trading futures and options is an extremely risky area to invest,
this niche is growing rapidly in recent years due to the easy
accessibility of instant updated data through the internet, which makes
it possible for day traders to make substantial profits.
Small investors are now able to invest and trade in this highly risky
area with the same comfort, ease and speed of big companies.
Before entering this high risk
area of Forex trading
• Make an honest review of your capabilities, both monetary and knowledge wise and decide on the amount to invest.
• Be aware of the commodity futures and option contracts and your responsibilities before making the actual investment.
• Make sure that you receive the risk disclosure documents from your broker and review it thoroughly.
• Gather as much information as possible and clear all your doubts before you take the first step to open a trading account.
• Know who to contact in case of trouble or if you have a question.
Tags: Commodities Futures
April 12th, 2009 by Forex Admin | 1 Comment | Filed in Forex day trading, Forex trading, Online forex trading
Simple classification of Forex Trading Accounts
Individual Account: When transactions are done only
for you, then it is referred as an individual account. This account can
be a ‘non-discretionary’ type where only you have the right to make
decisions and a broker must get your prior permission or sanction to
carry out any transactions, or it can be a ‘discretionary’ account
where you give the right to make decisions on your behalf to a broker
or any third party.
Commodity Pool: Here the trade is executed on
behalf of a group of individuals who trade commodities by means of a
‘commodity pool’. You have to purchase a share in the pool and the
transactions are made for the pool as a whole and not based on the
interests of an individual. And likewise, the profit or loss is shared
by the entire pool.
Before making transactions you should:
• Set your goals and be aware of your capabilities to invest and handle a risk or loss.
• Know the extent of help you need from a trading advisor and signals to make decisions.
• Check the reputation and registration status of the advisor with the National Futures Association.
• Obtain and review the disclosure document before opening a trading account.
• Not hesitate to ask any question regarding trading that you do not understand or have doubts.
Tags: forex trading accounts
April 12th, 2009 by Forex Admin | No Comments | Filed in Currencies, Forex learning
There are lots of views, principles and truths that exist regarding Forex trading
done by hedging using the grid trading system. Some believe that one
should cut one’s losses and let your profit run, while some believe
that one cannot make profits in the Forex market by making transactions
of buying and selling at the same time. Now, let’s see how you can make
money by breaking these rules. The principle behind a hedged grid
trading system is that one should be in a position to cash in at the
point of gain, irrespective of the direction that a market takes. This
means that a stop is not required at all. This scenario is possible
only when one has a buy and sell active simultaneously. But most
traders consider that this is highly risky and extremely foolish.
So, let’s take a closer look at this. Say for example that a trader
enters the market when a currency has a level of about 100, with a buy
and sell active. This means at the point of entry his buy will be a
positive 100 and the sell a negative 100. Here is where we deviate from
the principles and cash in the positive and increase the trading
account by 100, which makes the sell as a negative 100.
Tags: buying and selling
April 11th, 2009 by Forex Admin | No Comments | Filed in Forex strategies, Forex trading, Online forex trading
April 11th, 2009 by Forex Admin | 1 Comment | Filed in Forex brokers
A reliable Forex trading signal
will predict the final price by taking into account the favourable and
resistant levels, together with the fluctuations between past, actual
and any possible alterations to the numbers. That most important factor
in this is the timing of the indicator, as a particular variation can
have an entirely different impact on the market in different times.
Though the technical terms are quite complex and needs training and
experience to get familiar with, one can follow a simple method that
gives an overall trading strategy of how to interpret the news in
regards to stop loss limit and exit and entry points.
Keeping track of trading indicators
is not only a best way to ensure profits, but is also an important part
of the overall Forex market training. It helps a beginner to interpret
a trading signal and use it to his advantage. The only way to become
proficient in this method which helps one to make consistent profit, is
to execute live trades. Making meticulous notes of your transactions
and your strategy is also invaluable to make future trades. Once you
decide to enter the Forex market your goal will be to get into that
exclusive 5% category of successful traders. To make this possible all
you have to do initially is acquire proper training by subscribing to a Forex trading signal software provider
like the Alchemy of forex news trading.
Tags: forex signals, trading signals
Now, as laid out by the grid system, one should check the status of the cash for any movement in the forex market.
To accomplish this, one should re-enter the market and conduct a buy
and sell transaction. At this point, let’s make an assumption that the
market price is back to 100. This makes the second sell positive by 100
and similarly the second buy has a negative 100. As said by the rules,
one should cash in the sell and increase the account by another 100,
which makes a total profit of 200 at this point. The first sell made
which has remained active will have moved from the level of 200, from a
negative 100 to a positive 100, at this point where it is breaking even.
All materials from http://secretforextrading.com/
Now if you add all the four transactions made above, you will be
surprised to see a gain. In the first transaction, we cashed in the buy
for a +100, the second transaction we cashed in the sell for +100, at
which point the first sell is breaking even and the second buy was a
-100. This makes up to an overall profit of 100. You can now liquidate
all of the transactions and make a decent profit. This is just one
market strategy that can be applied to turn the ‘buy and sell
simultaneously’ action into profits. There are numerous other
strategies that can be applied to such scenarios to make substantial
Tags: forex transactions
| Category: Forex for Beginners | Added by: forex-market (2009-09-11)