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Forex Trading Articles

Best Forex Trading Indicators – 4 Simple Effective Ones for Bigger Profits

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Here we will look at some of the best Forex Trading indicators and how you can combine them into a simple robust Forex trading strategy for long term gains…

No single Forex trading indicator works all the time by itself and the way you combine them is essential. Many traders make the mistake of the thinking the more indicators they combine the better – Wrong!

If you do this the system has too many elements to break; you only need a few and your Forex trading system will be simple and robust in the face of ever changing prices.

Right lets build our Forex trading system and look at some of the best Forex trading indicators to help you build a trend following Forex trading system.

First Identify the Trend.

This is obvious by looking at a bar chart but you also want to use moving averages as well. Simple moving averages are great in terms of smoothing out the fluctuations and two great periods to use are first, the 40 day MA to identify the long term trend. Secondly, use the 20 day MA to buy and sell back to in a strong trend and you will find this moving average is excellent for getting in on a trend in motion, with optimium risk / reward.

Spotting the Set Ups

We don’t have time to cover this in detail here but there are a couple of points that are the key to maximizing profits. Firstly, be patient and only trade high odds set ups and secondly, make sure you trade breaks to new highs and lows all the big trends start and continue from them so you need to trade them.

Bollinger Bands – Check Volatility and Standard Deviation

Ask most traders what standard deviation of price is and you will probably get a blank look but an understanding of standard deviation of price and volatility is something that all forex traders need to know about and if you don’t, make part of your forex education and learn about Bollinger Bands.

Bollinger Bands are not used to for market timing – but give you an all round view of volatility price and when you understand this concept, Bollinger Bands can help you in 3 ways:

They can alert you to potential big moves, help set targets and spot market value and entry levels.

Best Forex Trading Indicators for Confirming

When you spot a potential opportunity, you need to confirm the move and make sure price momentum is going the way you wish to trade. There are plenty of momentum indicators but for the last 25 Years I have found the following two the best. There easy to learn and apply, lets take a quick look at them.

The Relative Strength Index (RSI)

A great leading indicator to time your trading signals with. If the RSI supports your view of the market you can use it in strong trends – or when it diverges from the prevailing trend ( from over bought or over sold) to enter trades against the prevailing trend.

The Stochastic Indicator

The best Forex trading indicator of all for better market timing and when combined with the RSI you have a dynamite combination. The stochastic is a simple indicator but is the ultimate timing tool for timing trading signals in my view. If you use stochastic crossovers to confirm your move, you will get the odds on your side. It’s also very effective for timing contrary positions. A stochastic cross, from over bought or oversold levels, against the trend is a highly effective way of getting in on the big contrary trades.

Simple and Effective

There are other great indicators around such as the ADX indicator, MACD and many others but as a blend the above 4 indicators with a bar chart are my best forex trading indicators for profit and they have served me well over the last 25 years.

The indicators are easy to learn, apply and if blended correctly, can add a new dimension to your forex trading strategy.

Forex Trading Articles

Forex Trading Tips – 4 Tips You Must Understand to Win at Forex

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Here are 4 Forex trading tips that if you understand them, can allow you to enter the elite 5% of winners who make big long term consistent profits. Anyone can learn currency trading and win but these 4 points need to understood – here they are…

1. You are Responsible

If you think you can buy success think again, you can’t. Most traders think Forex trading can be done with no effort buy a junk robot with a simulated track record and think they will make the same gains sorry, it’s not that easy. Forex trading sees 95% of traders lose and is not a walk in the park.

While anyone can learn Forex trading, you need to get the right education and skills but first you need to understand what the Forex market and how prices move, which leads to the next point.

2. Understand Markets are an Odds Game

Many traders think you can predict prices and believe so called experts, who say it’s possible. Its not and your predictions will be as accurate as your horoscope if you try. Neither do they move to a scientific theory as many claim; if they did we would all know the price in advance and there would be no market!

You need to understand that winning at Forex, is all about trading probabilities not certainties. You need to understand you won’t win every time and will have periods of losses – but if you always trade the odds, you can make a lot of money. Now let’s look at the type of Forex strategy you need.

3. A Simple System is All You Need

Your Forex trading system should be simple, robust and easy to understand.

Don’t believe anyone who tells you complicated methods are better there not, as they have too many elements to break and science (no matter how clever) won’t help you when you’re trading an odds based market.

Get a simple trading system – it’s easy to do and now we will move onto the final point which is the challenge you must overcome and if you can, you can make huge profits.

4. Discipline is the Key

A method by itself is not enough, you must have the discipline to execute it through periods of losses, until you hit profits again and this can be tough. It’s hard to keep executing your trading signals when the market gives you losses and makes you look a fool. Most traders simply let their emotions and ego get involved and lose.

Being disciplined at all times and employing strict money management, is the key to winning longer term and its not easy but it can be done, if you have confidence in what you are doing and have the right forex education.

It’s Not easy to Win

You can win though, anyone can. The fact it’s not easy to win, means the rewards are huge and you can get your share of them, if you want too.

Forex trading means you have to get the right education have confidence in what you are doing and trade with discipline. Accept this and take responsibility for your actions, and your on your way to Forex trading success.

Forex Trading Articles

Forex Trading – 5 Critical Mistakes Novice Traders Make and Lose Avoid Them at All Costs!

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If you want to win at Forex trading you need to avoid the common mistakes enclosed as most novice traders make them and get wiped out – avoid them or lose money.

1. Trusting a Forex Robot with a Simulated Track Record

It has always amazed me traders fall for this one – they are presented with a track record that Warren Buffet would be proud of AND all for $100! The buyer never has to work again, plug the robot in and make money with no effort, for life. The problem of course is these Forex systems sometimes amusingly called expert advisors, have never made any real money.

All they have support there claims is a back test simulation, which is done knowing the closing prices. Well anyone can do that – but you don’t get to know the price in advance when you trade. If you want to trust a paper back test you can – but don’t be surprised if you get wiped out.

2. Day Trading

Trading in short time frames is popular – but doesn’t work.

All volatility within a day is random – you can’t get the odds on your side and can’t win. All the systems sold that claim to make money, are like the Forex robots above – producing back tests and simulations on paper. Try day trading for real and it’s a different story, regular profits actually turn into regular losses.

3. Believing You can Trade with Little or no drawdown

90% Accuracy, make a monthly income, make 20 pips a day etc great copy – but not based on reality. If you trade Forex you are going to face losses – sometimes for weeks or months. Your challenge is to trade through these periods with discipline, until you hit a home run and hit profits. Most traders can’t do it and throw in the towel early.

Learn this – if you want to win in Forex trading, you need to learn to lose, take your loses and keep them small and stay on course.

4. To Win You Need to Predict

Not a good idea, as predication is hoping or guessing and you don’t get rewarded for that, in any area of life. Most traders dive into soon and should have waited for confirmation of trend continuation or change and then traded but they dont jump to early and get stopped out.

If you want to win, forget prediction and trade the reality of price change.

Do not believe anyone who tells you there is some mathematical law of market movement – if there was they wouldn’t tell you (they would be to busy making money) and also if there was, we would all know the price in advance and there would be no market. Markets move because prices are uncertain not certain!

5. You Need to work Hard and Be Clever

This is totally wrong and hard work and being clever, count for nothing in forex trading only being right with your trading signal and the money you make is how you are judged and the cleverest and hardest working people, don’t always win at all.

You need to work smart not hard, get the right Forex education and then you need to keep it simple! The best Forex trading systems are simple – not complicated and a simple system has a huge advantage, as it’s more robust, with fewer elements to break, than a complex one.

A simple system traded with discipline is the way to win and always has been.

How to Win

So there you have 5 common Forex trading errors – make any of them and you will join the vast majority of losers. If however you get the right Forex education, avoid the above mistakes and understand that a simple system, which trades the odds and applied with discipline is the key – you are on your way to Forex trading success

Forex Trading Articles

Training for Success in Forex Trading for the Newbie and Professional

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Copyright (c) 2008 Orlando Thompson

Many factors play a direct part in the success or failure of the Forex Trader. As you Read this article take note and or come back to it as a reference point and it will serve you well.

Understanding the nuances of the Forex Market requires experience and training, but is critical to successful Forex Trading. In fact, ongoing learning is as important to the veteran trader as it is to the newbie. The foreign currency market is massive, and the key to success is knowledge (knowledge is power). Through training, observation, and practice, you can learn how to identify and understand exactly which direction the Forex market is going and what controls that direction.

To invest in the right currencies at the right time in a large, nonstop, and global trading arena, there is much to learn. Forex markets move very fast and can take new directions at any second. Forex training helps you assess when to enter a currency based on the direction it is taking, and how to forecast its direction for the near future.

The many available resources and tools to train yourself

There are many free tools and resources available in the market, particularly online. Among there you will find:

CHARTS

Do not hesitate to browse forex glossaries, which are offered free on many platforms. A given word may have different meanings as it relates to forex and to the terminology used by the forex market participants.

Make sure to make an effort to determine the general magnitude of any change on the chart (meaning: What is the $ value of any given change when trading at that point).

GUIDED TOURS

Most Forex Trading Systems provide guided tours, demos, or tutorials, either online or as downloads (be sure to take advantage of these valuable free tools).

NEWS / BREAKING NEWS

Keep abreast of world news. Read all the headlines, particularly those related to Forex. Check the impact of such news, if any, on the charts.

FOREX OUTLOOKS

Read daily/weekly outlooks posted on forex related sites or general financial sites. Many include alerts to upcoming reports and events such as market indicators and interest rate decisions.

FOREX BOOKS
Read, or even just browse forex books. Many Forex related books are offered free or as part of a service package to the trader (these books are intended to assist the trader in becoming successful in there forex trading). For many historical background and technical analysis, books are better rather than in educational settings.

ECONOMIC INDICATORS

Pay attention to the release of economic indicators (for example – the monthly unemployment rate in the USA), and try to identify their impact on the market in general, and on specific currency pairs in particular.

INTERNET FORUMS / BLOGS

Visit and participate in forex forums. This will give you the opportunity to learn from others experiences. (This can be a very valuable and reliable place to gather information as people love to tell their own stories and typically will be very forthcoming with good information).

These are a few other things to consider

To success as a Forex Trader, you must take into consideration a wide variety of factors such as:

– Spreads (“PIPS”)
– Commissions and Fees
– Ease of access to the trading platform
– Minimum mount needed to begin trading
– Additional amount needed (if any)
– Control over activity and positions
– The platform software requirements
– Ease of deposits and withdrawals
– Personal service and support provided
– The platform’s business partners
– The platform’s management
– The products offered onboard the platform

There are many other factors to be considered before trading forex, but if you use this article as a starting point and follow its suggestions, you will have a very good chance to be a successful forex trader.

General Forex

Forex Online Currency – How to Make Money Trading Forex Online Fast

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Forex Online Currency

There is no other market like Forex. The Forex market offers a trader an almost endless opportunity to make money online trading Forex. Open 24 hours a day, 6 days a week and offering a wide variety of currency pairs to suit your trading style, Forex is perhaps the best market to make money from. No matter if you swing trade, scalp, day trade or hedge, there is money to be made. Two of the most profitable trading styles are swing trading and scalping.

Scalping offers a trader the chance to make money by quickly opening and closing trades at lightning speed. Their profits are gleamed from the small movements in price and a trader being quick enough and fast enough to get in and out and seize the opportunity and money before the market moves back. While extremely risky, scalping offers enormous profits for those traders bold enough to challenge the market. Forex Online Currency

Swing trading, while a lot slower than scalping, offers traders the chance to profit from the enormous swings or movements in price that many currency pairs experience. Open usually for several days at a time, swing trading is the favourite of large corporate traders and banks. Their profits are gained from timing correct entry points when a currency pair retraces before it continues on with its move.

There is no other market like Forex. The speed and excitement a trader feels is matched only by the enormous potential to make money while trading Forex. No other market offers such opportunity as trading Forex online. Forex Online Currency