How to start your forex trading career.

Tips For Newbies - How to start your forex trading career.

Trading the forex market can be a very rich and rewarding experience for those who start from a solid foundation. For those that jump in head first with no previous training and no pre-defined plan to trade the forex market, disaster is only a trade a way. I mean that in the most literal sense because if you have no trading plan and no real idea of what being a successful forex trader entails, than you will quickly develop and reinforce all the wrong habits that eventually will destroy your trading account much faster than you think. This article is written out of personal experience and knowledge and will give you some idea of how to get started trading the forex market with the goal of consistent profits in mind.

The first and arguably most important factor in determining wither or not you are ready to trade forex is to sit down and take a look at your entire personal financial picture. If you are planning on funding your trading account with money that you might possibly need for any living expense than you are not ready to trade. You need to have disposable income that you are totally ok with losing; this is the first step in developing the proper habits of a successful forex trader. If you are trading with money that you need for bills or anything else in your life, you are doomed to fail because you will be overly emotional from the very beginning while trading, a sure fire recipe for disaster.

After determining that you do have enough disposal income to open a forex trading account you can then begin to develop a personal method or system for trading the market. I will save you months or even years of frustration, time, and money by telling you this; all you need to make your entry and exit decisions is a naked price chart. That’s right, you don’t need a bunch of fancy indicators and you certainly do not need to buy some two thousand dollar black box system. Trading is mostly psychological and most people over emphasize the technical analysis side of it. A good foundation in price action analysis is all you need as far as the technical side of trading goes. Once you know the basics of price action in the forex market you can then develop risk/reward strategies and concentrate on maintaining your self control and discipline.

I suggest you demo-trade for a month or two or three before trading your real money in the markets. Develop a good system for entries and exits so that you already know what to look for and what to do when you trade with real money. You need to know what you are going to do before you get into the trade because if you try to decide while the trade is happening you will inevitably make the wrong decision due to emotion. You need to have all scenarios planned out before they happen, so if x happens you will do y, if a happens you will do b, there should be no deciding while the trade is open.

Finally, learning from people who are already consistently successful in the forex market is probably the best route to go. The problem is that many people claim to be successful traders but few actually are for long periods of time. Forex trading is full of people trying to make a quick buck by selling some bogus trading systems that are overly complicated and simply don’t work. Simplicity is your friend when it comes to trading the forex markets. Remember that, it’s important.

So do your research before jumping in the forex market. Only trade money you can afford to lose, study price action and naked price charts and learn from a good mentor such as myself, demo-trade until you get your trading plan tweaked just right, then and only then should you think about diving in with real money.

Nial Fuller

forex trading

I work my full time job that pays the bills on 2nd shift which enables me to trade during the day. I trade the EURUSD (spot) during the US session. I started this journal in the hopes that one day i can trade for a living.

Forex Trend Following - How to Make Big Gains With Low Risk
Posted: Jun 8th, 2008 | Comments: 0 | Views: 171 |
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Forex Trend Following - How to Make Big Gains With Low Risk

Author: Kelly Price

Forex markets trend and if you look at a forex chart the big trends last for weeks or months and it's these trends you need to lock into to make big profits. Forget, short term moves forex trend following means longer term and bigger profits.

If you want to forex trend follow and make a lot of money with low risk, use the tips below in your forex trading strategy and you could soon be making triple digit gains.

First - you need patience the high odds breaks were looking for don't come around every day, you will get probably 5 - 6 big high odds trades per currency each year.

You need to wait for them.

Don't worry, I know traders who make triple digit gains trading just a few times a year. Remember - you are judged on the accuracy of your trading signal and market timing, nothing else and to be accurate you need to wait.

Second - Buy breakouts.

It's a proven fact that most big trends start from new market highs or lows and while it may appear, you have missed a bit of the move, the odds favor a continuation.

You need breakouts though that are valid and not all breakouts are the same in terms of the odds.

The best breakouts, feature several tests in several different time frames and the wider they are spaced apart the better. Generally, the more uncomfortable you feel and the more people who disagree with your trading signal the better - remember only a small minority win.

Most traders hate breakouts, they want to wait for a pullback ( which never comes) to get in at a better price - grit your teeth the odds are in your favor!

You should also use some momentum oscillators to confirm the move. We don't have time to discuss them here ( look up our other articles ) but they will tell you price velocity is moving in your favor and increase the odds of success.

NEVER - Buy or sell a breakout which is NOT supported by momentum.

Once the breakout occurs, your stop is easy - right below the breakout point.

The real key to forex trend following and milking the trends for all there worth is the way you move your stop. Most traders trail to quickly and get bumped out.

They then see the trend go back the way they though piling up thousands of dollars!

Don't let this happen to you. WAIT.

You want the trend well underway, before trailing your stop and you want to keep it behind random volatility ( if you don't know what standard deviation of price is make it an essential part of your forex trading education).

Accept that to hold the longer term trends, you are going to have to take short term price swings against you which eat into your open equity in the short term.

Don't worry to much about this.

You are after the bigger price at the end of the trade. Once a trend is in motion, we like to trail stops behind the 40 day ma. Sure, we give a bit back at the end but you don't know when a trend is over, or how long it will last, so there is no point in predicting.

Keep in mind, if you caught just 50% of every major trend, you would be very rich.

Does the above sound simple?

It is in terms of theory - but you must be disciplined in the execution and holding of your trades. No second guessing what the market may, or may not do!

Trend following forex, with a simple robust forex trading system based upon breakouts, will make money and will continue to make money and can help anyone achieve currency trading success.

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Article Source: ArticlesBase.com - Forex Trend Following - How to Make Big Gains With Low Risk

Forex markets trend and if you look at a forex chart the big trends last for weeks or months and it's these trends you need to lock into to make big profits. Forget, short term moves forex trend following means longer term and bigger profits.

If you want to forex trend follow and make a lot of money with low risk, use the tips below in your forex trading strategy and you could soon be making triple digit gains.

First - you need patience the high odds breaks were looking for don't come around every day, you will get probably 5 - 6 big high odds trades per currency each year.

You need to wait for them.

Don't worry, I know traders who make triple digit gains trading just a few times a year. Remember - you are judged on the accuracy of your trading signal and market timing, nothing else and to be accurate you need to wait.

Second - Buy breakouts.

It's a proven fact that most big trends start from new market highs or lows and while it may appear, you have missed a bit of the move, the odds favor a continuation.

You need breakouts though that are valid and not all breakouts are the same in terms of the odds.

The best breakouts, feature several tests in several different time frames and the wider they are spaced apart the better. Generally, the more uncomfortable you feel and the more people who disagree with your trading signal the better - remember only a small minority win.

Most traders hate breakouts, they want to wait for a pullback ( which never comes) to get in at a better price - grit your teeth the odds are in your favor!

You should also use some momentum oscillators to confirm the move. We don't have time to discuss them here ( look up our other articles ) but they will tell you price velocity is moving in your favor and increase the odds of success.

NEVER - Buy or sell a breakout which is NOT supported by momentum.

Once the breakout occurs, your stop is easy - right below the breakout point.

The real key to forex trend following and milking the trends for all there worth is the way you move your stop. Most traders trail to quickly and get bumped out.

They then see the trend go back the way they though piling up thousands of dollars!

Don't let this happen to you. WAIT.

You want the trend well underway, before trailing your stop and you want to keep it behind random volatility ( if you don't know what standard deviation of price is make it an essential part of your forex trading education).

Accept that to hold the longer term trends, you are going to have to take short term price swings against you which eat into your open equity in the short term.

Don't worry to much about this.

You are after the bigger price at the end of the trade. Once a trend is in motion, we like to trail stops behind the 40 day ma. Sure, we give a bit back at the end but you don't know when a trend is over, or how long it will last, so there is no point in predicting.

Keep in mind, if you caught just 50% of every major trend, you would be very rich.

Does the above sound simple?

It is in terms of theory - but you must be disciplined in the execution and holding of your trades. No second guessing what the market may, or may not do!

Trend following forex, with a simple robust forex trading system based upon breakouts, will make money and will continue to make money and can help anyone achieve currency trading success

SUPPORT AND RESISTANCE

Euro Dollar

As expected, the Euro jumped after breaking 1.4725, but the rise stopped just above 1.48, exactly like what happened last Thursday (yesterday’s high 1.4812, Thursday’s high 1.4816). It seems like reaching the resistance area 1.4808-1.4816 has become a problem for the Euro, since it failed twice at the same area. The falling trendline from yesterdays high, on the intraday charts, will provide the most important resistance for the short-term at 1.4788, and this resistance is the key to break the hard area 1.4808-1.4816, and the well known resistance which is just above it 1.4826, then may be new highs above the tops of September 22nd & 23rd, the most attractive of which is 1.4901. Support is at 1.4728, a break here would signal more of the drop, to test one or some of the important support levels in the 1.46 & 1.45 areas such as 1.4645, 1.4613, 1.4575, down to 1.4509.

Support:
• 1.4728: Fibonacci 61.8% for the short-term.
• 1.4645: Previous intraday resistance.
• 1.4574: Previous intraday support.

Resistance:
• 1.4788: the falling trendline from yesterday’s high on intraday charts.
• 1.4826: previous daily high.
• 1.4901: previous daily high.

USD/JPY

The Dollar-Yen failed to capitalize on the break of 90.29. And although the falling trendline on the 4H was broken, the falling trendline on the hourly chart was not, and price stopped just below it, near the well known resistance 90.40. We will shift attention towards the trendline on the hourly chart, and if it is broken, then the Dollar would be invited to show how deep its real strength is over a series of resistance areas starting at 90.67 and reaches 91.63. The resistance that is attached to this line is 90.29, and if broken, then the line is broken, and the next stop would be 90.67 which is an important stop on the way to the most important stop in these areas 91.63. Short-term support is at 89.32, and if broken the direction would be down to test the important support 88.68, which must hold to prevent another attempt to test 87.97 which survived last week’s attempt for a break.

Support:
• 89.21: Fibonacci 50% for the short-term.
• 89.01: Fibonacci 61.8% , and the most important support for the short-term.
• 88.68: support area that supported the price twice this month.

Resistance:
• 90.37: the falling trendline on the hourly chart, plus the resistance that stopped yesterday’s rise.
• 90.67: previous support.
• 91.12: previous support & resistance

WHY TRADING FOREX?

Currency Trading Tips - How to Choose the Best Pair for Forex Currency Trade

Does anyone of you have an idea on which currency pairs are the best to trade in forex? Is it the major currency pairs, the cross pairs or the exotic pairs? Well there isn't really a right and wrong answer; it depends on how you define 'best'. If a currency pair has tight spreads, it may be considered the best trading currency pair for you, but may not apply for others. So now we'll discuss on various factors on choosing a forex pair:
1. Spreads - There is always an advantage to trade currency pairs that have a tight spread in forex trading. It means that lesser spreads equal to more profit, lesser spreads give you more room for price fluctuation if you have a tight stop loss and lesser spreads may help you to breakeven your forex trade earlier. Does that make sense to you? EUR/USD has the tightest spread of 2 to 3 pips for most forex brokers and even 1 pip for some brokers, while GBP/JPY has spread of 6 to 10 pips. For some forex traders who care a lot on spreads, he will certainly choose the formal over the latter.
2. Trendiness - For chartist traders like me, I depend mostly on technical indicators to help me decide which forex currency pair to trade. Although volatility is considered good, but it is then more risky and need a wider range of stop loss. e.g. is GBP/USD. On my forex trading screen, I have 7 to 8 currency pairs in smaller windows, so that I'm able to decide which pair is the trendiest, even when all pairs seem to have a trend. Though EUR/USD and USD/CHF is negatively correlated 90% of the time, you will sometimes find either of the pairs trending better than the other. Therefore you will want to choose the more trendy pair to trade with the help of some forex technical indicators.
3. Trading Sessions - The best time to trade forex is when the market is the most active and therefore has the biggest volume of trades. During Asian hours when Tokyo opens, the better trading time is from 7PM EST to 10PM EST. But since not all the currency pairs are actively moving, you may want to trade AUD/USD as it starts to move during the stated timing. When London market opens, this is where you can trade almost all the currency pairs. I will trade from 3AM EST to 6AM EST depending on the trendiness of the pair; example is GBP/USD, EUR/USD etc. Another trading session which will experience high volatility is from 8AM EST to 12PM EST where both the London and U.S. markets are open at the same time.
After looking at the above factors, do you think there is a right and wrong answer on choosing the best forex currency pair? I doubt so. As long as you are using a reliable forex trading system to help you, all currency pairs can be profitable. To know more on the behavior of the currency pairs, you can find it in my FREE forex ebook with a forex trading system that can help you generate profits consistently.