Category Archives: Forex Trading Articles

Forex Trading Articles

Foreign Exchange Lessons To Be Learned By Forex Traders

3 tips Each Forex Trader need to understand

Foreign exchange is considered by quite a few as one of the greatest business to be operated at house. This is in fact true. Having said that, a trader must understand various foreign exchange lessons before stepping out into the world of currency buying and selling. Understanding valuable and informative currency trading lessons will serve as an instrument to succeed in exchanging.

Lessons Each Forex Trader need to know

1. FX or Forex defines Foreign Exchange. During the past, those who trade in the marketplace are only large organizations such as banks and governments. At present, the law allows other individuals to take part in forex dealing. A lot of are already doing buying and selling as a full time job at home.

2. Investing in the foreign exchange market may possibly be tough or effortless depending on how you handle it. It is truly dependent on who you rely on through the stage of studying the entire procedure of fx exchanging. By knowing whether the sources of material you use in taking the info you require is reliable, you will know whether or not you will experience difficulties or handle the investing procedure with ease.

3. The foreign exchange is, in actuality, very large. The truth is trillions of dollars are being traded in the marketplace daily. It has the characteristic of liquidity that is why dealing methods that are technical and straightforward to use software for the dealing practice can be relied upon. These will assist you in your quest for success in the market place currency or foreign currency buying and selling. Fx dealing is a ideal means of earning money via trade.

Forex Trading Articles

How to Win Forex Trading Using Zulutrade

ZuluTrade is a free automated forex trading service that allows you to trade the signals of thousands of different signal providers. Once you’ve chosen your providers, the signals are then executed automatically in your forex broker’s account. Free demo accounts of ZuluTrade are available for testing purposes.
In this article, one of the winning forex strategies using ZuluTrade will be explained step by step. This method is not for instant big income but for long-term success by risk management.

Step 1. How to search good signal providers

In the website of ZuluTrade, there is “PERFORMANCE” section that shows list of signal providers. On top right of the page, it shows “Show advanced search”. Just click it. Then, Advanced search screen appears.

Following is the detailed setting for the advanced search to find good signals.

have live traders subscribed – “Check”
Running weeks – Input “12 – 300”
Max DD % – Input “0% – 30%”
Win % – Input “75% – 99%”
Profitable Account – “Select”
Worst Trade – Input “To 300”
Followers – Input “From 100”
for a period of (months) – “12m”

For other factors, leave them as default.

With the above setting, click “Search”. Then, the providers list will be renewed with signals that match with above advanced search conditions.

Step 2. Selection of signal providers

In the advanced search result, click name of signals to show the detailed performance data. There are some check points as follows.

2-1. Profit graph
If Profit graph on the right does not show constant growth, do not select the provider.

2-2. “This signal provider is also known as” section
Below the Statistics, it shows “This signal provider is also known as : ” if the provider has different signals. If there is “Bomb” mark on other signals, do not select this signal provider because there is a high risk of blown up. In case a signal you already selected is listed here, you should not select both at the same time because the same trader tends to trade in a similar way. If one signal goes wrong, others may also go wrong. So, select just one of them for diversification purpose.

2-3. Other live users’ rating
Read other live users’ rating before selecting the signal. If the rating percentage is too low like below 50%, do not select.

2-4. Live Followers result
At the bottom of the page, there is Trading History section. Click “Live Followers” tab to see result of other people with this provider. If it is not profitable, do not select.

2-5. Add signal providers that match above check points in the advanced search result to your portfolio.

Step 3. Setting of signal providers in your portfolio

Even if good signals are selected, risk management is the key to success in forex trading. You cannot rely 100% on someone else.

In “SETTING” section, you can set for signal providers you added to your portfolio.

Set as follows for each signal provider.
Lots Multiplier – 1
Max Open Trades – 1

With this setting, risk of each signal is minimized.

Please remember that “Margin Call-o-meter” of your account must be always within 100%. If it exceeds 100%, disable one or more signals until the meter becomes less than 100%.

When you add a signal provider, do not add it to your live account without testing. Always test in your demo account for at least 1 month until you have confidence in it.

Step 4. Maintenance of your portfolio

Since ZuluTrade is a kind of managed account, once signals in your portfolio is activated, you don’t even need your PC. However, I recommend to check your daily result by E-mail or the website of ZuluTrade.

Do some research of Step 1 to 3 regularly and if you find a good provider, just add it to your demo account. If you are satisfied with the demo trading result, you can add it to your live account.

Diversification means reducing risk by investing in a variety of assets. Investing using different signal providers with lot management reduce risk and constant growth of your account can be expected.

Forex Trading Articles

The Advantages of Trading Alone

Trading with other people works sometimes and sometimes not. A person should trade alone to obtain all the benefits and profits for himself only in future. The person or trader should decide properly whether to trade with some other people or not. He should keep in mind what adjustment he has to suffer in future with his partner in trading.

A good trader has various qualities and behavior whether he trades in the forex trading market, stock market or whatever. The qualities he has is the quality of trading in the market wisely to make good trades. Always the good trader is determined towards his trading in the market. A good trader is patient in making profits; he never goes for making quick and fast money.

Trading in any market successfully is not a joke; it requires lot of dedication and hard work. Trading cannot be efficiently done unless the trader does not have a trading plan and follows it strictly in discipline. The trader who makes a trading plan and follows it strictly in discipline definitely accomplishes success in trading.

Trading alone has so many advantages and benefits. Trading alone helps an individual to develop his own understanding and philosophy regarding the market and himself. By trading alone in the market, you can make your own decisions without explaining any basis of your decisions to any one. Your effort and time can be focused on the market, instead of thinking about the emotional and psychological dynamics of a trading group or partner.

In alone trading, there will be no one for blaming your failure in trading. By this no time is wasted for mitigating or feeling guilty regarding your failure in trading. By trading alone you can experiment freely what you want to experiment, and by doing this you gain knowledge about the market which is very important for trading.

In alone trading, you only is accountable and responsible for your success or failure in trading. In it you cannot blame to anyone else. It also develops confidence of trading efficiently and effectively. Self confidence is very necessary in trading; it encourages to trade efficiently in the market. By this, the traders become faithful in their own ability and capacity of trading efficiently.

The main advantage of trading lonely is that the trader can enjoy the profits lonely; he does have to share his profit with anyone. And profit is the main thing which attracts the traders to trade in the market. Therefore, these are the advantages of trading alone in the market.

It is also said that a good trader is an intelligent trader who trades wisely in the market. He takes each and every step very effectively and wisely. A trader is good when he has all those qualities of converting his trades into profits more than losses.

Forex Trading Articles

Low Latency Your Forex Trading Edge

Latency is defined as the delay in the time it takes for data to travel from point A to point B. In the case of Forex trading, this equates to the distance between your broker and their respective liquidity sources.

Latency tends to be one of the most overlooked aspects of Forex trading. From a trader’s perspective the focus has always been on the front end trading software. However, reductions in latency should be one of the most important considerations in selecting a Forex broker. It is essential that an STP broker that connects to various liquidity sources lessen the time that trade messages takes to reach those sources of liquidity.

The Case for Colocation

As is the case with many businesses, a major key to success is “location, location, location”. Numerous studies have shown that the most effective way to limit latency is to make sure the physical location of the broker’s servers are in close physical proximity to the data source. DivisaFX accomplishes this by locating their servers within the same facility where Currenex hosts their servers. This means that trade messages travel the shortest distance possible and offer clients precious milliseconds advantage over other brokers.

Many algorithmic and high frequency traders take advantage of the improved execution times by hosting their trading system in a collocation with their broker. Through a partnership with TradeSpotFX, traders can now use the VPS (Virtual Private Server) service to reduce latency and maximize the effectiveness of their expert advisor or other automated trading system they might use.

Another benefit of server collocation is security. Financial institutions are required by law to adhere to the strictest levels of security and data integrity. They must also maintain server uptime of 99.99% so numerous backups are implemented to insure uninterrupted trading for clients of DivisaFX.

Forex Trading Articles

Forex Modern Portfolio Theory

Forex MPT stands for Modern Portfolio Theory that implies how a rational trader can build his/her portfolio and optimize their prices risks.

The theory states that it is erroneous to think about the possible risks and returns from a single stock entity. It suggests preparing a portfolio having diversified speculation in several assets that should diminish the risk factors.

The Modern Portfolio Theory indicates following risk factors involve in earning profitable earnings.
Systematic risks: These risks involve inflation rate hike, fluctuations in interest rates and financial downturns influence all the investments made in assets.

Unsystematic risks: These risks are specifically defined for economic assets but there are possibilities to minimize them by reducing the portfolio exposure and diversification of the portfolio.

This Forex MPT states that the trader bears the risks of producing less return from the assets then the expectations. The risk involved in each asset is the possible variation from the average return on assets.

This difference in the expected returns from assets will be less if the trader invests in diversified and uncorrelated economic assets portfolio.

While investing in a diversified portfolio, the average variation from the mean returns or the risks involved in each stock does not add significantly to the risks involvement on the portfolio returns.

Relatively, the portfolio risk is measured by the variation between the risk levels on the single entity assets. Thus, traders earn maximum profits from diversified portfolio holding instead of individual economical assets.

This theory presumes those investors are really risk averse and would pick for a less chancy asset, if they were presented two resources that put forward the equivalent returns.

As picking for elevated risk can be practiced only if elevated profits are anticipated from that asset investment.
This suggests that a rational trader would never make investment in a highly-risk oriented portfolio when have other portfolio options having less risk bearing and more favorable returns.

Traders can use a graph to plot the risk outline of different portfolios to examine the risk involved in each entity and the return potentials of that asset portfolio. This also helps to predict the potential frontiers.

Whereas a portfolio on the topmost level of the potential frontier is offering high returns for specific risk level, traders who have the thirst to earn higher returns are likely to choose topmost portfolio potential frontier.

This is the Forex Modern Portfolio Theory explaining the type of risks involved in portfolio and the ways to reduce those risks along with optimizing the prices.

The article gives information regarding the Modern Portfolio Theory and how it can be applied in the Forex trading floor to reduce the risks involved in the diversified investments and well optimization of the investments prices.