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General Forex

Forex Trading Strategy: How to Build

Forex trading is an exiting way to earn money provided that a good strategy is planned before starting to trade and also well followed during trading. Four basic factors must be considered in order to build a forex trading strategy which will be illustrated below.

First, the planner should determine the time frame which will be used during the forex trading .This will be a part of the forex trading strategy. The meaning of choosing the frame is to choose the period during which price will be noted for change. It may be in the range of minutes such as one minute or five minutes or in the range of hours or even days. Each period has its advantages and disadvantages. For example, in the high periods such as the one day period, the movement from one period to another will be high and thus there will be higher profits as well as high risk. The daily trading is considered long term forex trading strategy while low time periods such as hours and minutes are considered low term forex trading strategy.

Second, the analytical methods which will be used during forex trading must be planned carefully. This step is considered the most important one in the forex trading strategy. It can be fundamental or techniqual schemes. The techniqual analysis depends on analyzing the curve of the currency pair price which will be traded. It uses techniqual schemes in order to predict the price movement in the future based on the history of the price. The most popular schemes are simple moving average, exponential moving average, stochastic, Relative Strength Index, MACD, and pivot point trading. The fundamental analysis depends on economical news analysis

Third, money management planning must be considered as part of the forex trading strategy. What meant by money management is to determine the percentage of the forex account which will be traded, the profit limit, stop limit, and risk to reward ratio. This is very important in the forex trading strategy although it is ignored by many people.

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Fourth, the entry and exit points must be determined according to the analysis used in trading the forex. This means to determine when to enter a trade and when to exit. This will deepens on the techniqual analysis used in studying the pair. For example, if pivot point is used as a trading strategy, the entry point may be the pivot line and the exit point may be the first resistance level.

Once the trader determined the four above points, then the forex trading strategy is built. An important thing to do after building it is to follow it carefully and respect the rules inside the forex e trading strategy.

Forex Trading Articles

Forex Strategy Trading Tips Why Small Victories Will Assist You to Win All Your Trading Battles

As most traders I started by trying to puzzle out Forex trading without any help. I was always hunting for new methods to learn more, bring in more revenue, and be a better trader. Many people also tried to feed me lies, gimmicks, and sales pitches but I didn’t buy into them.

Becoming profitable at Forex strategy trading was not simple and it took lots of work and effort. During my journey to become a profitable trader I learned one of the biggest Forex secrets.

Successful traders are not hunting for jackpot trades (normally trades with quite high risk parameters) that will make them large sums of income once in a while. Pro traders are rather in search of trades that can produce them smaller profits repeatedly. In this article you will learn how you can make Currency trading work for you by trading high probability/ low risk trades.

Pick your battles wisely: Choosing the right battles is extremely important to ensure that you accomplish your goals. In Forex trading you must pick time frames and currency pairs that suit your trading needs.

For example, if you are looking into trading only for a few minutes a day you may need to learn how to trade lower timeframes. If you are planning to trade everyday you may need to consider day trading and so on.

Be sure to possess the right Foreign currency trading “weapons”: I am careful whenever I choose or build a new trading system. Lacking the appropriate trading tools can be quite detrimental and sometimes it can cause you to lose most or all of your trading funds.

The best way to measure the success of your trading strategies is by testing for 3-4 months and then analyzing the final results. Every trading month is different but 3 months definitely seems to be the magic number to perform back testing on a FX strategy.

To make an omelet you need to break some eggs: No trader wishes to lose but the truth is that every trader loses money. Additionally, a successful Forex career is formed by several small failures. Successful Forex traders accept the fact that loses are part of the trading game. What really makes all the difference is your ability to manage your risk and find trading opportunities with high reward to risk ratios.

Perseverance will always overcome misfortune: The best way to be a consistent and very profitable trader is by having many small victories time upon time.

When facing a losing streak your perseverance and discipline will be tested. Furthermore, a Currency trader that is consistent, never gives up, and takes smart trading decisions will achieve his goals sooner or later; it’s just a matter of time.

Most beginner traders believe that the way to succeed is to find the “holy grail” trading system or technique that can make you millions. This approach will not take you to where you want to go with your trading career.

Focus on using simple trading strategies, solid money management, and keep reading my Forex strategy trading tips 😉 and you will be on your way to become a very successful trader.

All the best,

Jay Molina

Pro Forex Trader & Educator

General Forex

Trading Psychology is an Effective Trading Strategy

Forex trading is definitely not a game of chance. Typically, believing with instinct to grab the opportunity of executing a trade is one among the trader’s biggest mistakes. Currency trading is a business where everything has its own basis and can be determined through correct application and proper calculation. A good approach to keep traders on the right track in Forex trading is to create positive trading psychology.

Trading psychology plays an important role in achieving good result for your trading career. However, it is actually the least subject being tackled by some people who are just starting out in the business. They don’t know how essential it is to undergo trading psychology in order for a trader to get by and succeed in the topsy-turvy world of currency trading.

There are certain advantages associated with the ability of the trader to control feelings and emotions before, during and after trading. As such, one of the most effective trading strategies is having a first-rate trading psychology. Getting inside the mind of a trader is crucial. It will facilitate you to learn the areas of your interest and know when not to buy. Another better strategy is to keep an apparent division between your personal and professional life in order to produce quality decision on trading.

Traders with a good mindset could be able to run business smoothly and know directions on when and how to put a trade. This quality of a trader can be developed as he goes through training and takes necessary trading education that can absolutely level up knowledge and skills. It is highly suggested for a trader to focus on reading informative trading books or even enroll to exclusive trading academy.

Indeed, if you are planning to engage with Forex trading, you should initially get reliable training course. It might seem challenging and difficult to comprehend at first but learning and training will help you cope with the market situation. Being mentally stable and prepared before you enter the market live is not just for the sake of making decisions but also for earning profit along the way. Self motivation should be practiced so you could be able to get the enthusiasm and drive in your trading career.

It is a mere fact that traders couldn’t be able to anticipate market condition. Fluctuation is a common occurrence in any financial market so traders should always be aware of it and become prepared for the next thing to happen. In world trading, it is possible that you may experience losses regardless of how cautious you are in reading charts and executing a trade. Most of the successful traders will agree to this fact because the market is so volatile and there are inevitable instances of losses. What you need to do is to take the loss comfortably and improve your trading strategies by researching and planning your next trading activity. Learning your own lessons from what you have done wrong from the previous trading losses can enhance your knowledge and maximize your trading potential. You can formulate another market trading system as your mind empowers your next plans through accepting failures.

Just focus your mind straight and set your spirit high to derive new action plan in the marketplace. No matter how better or worse the result might be, you still have to get up and realize that it is all part of the business.

Market Analysis

Why use spreads as an option trading strategy in todays stock market

If you only buy options, the deck is stacked against you. Roughly 75% of options expire worthless or are closed at a loss. Since everything must add up to 100%, that means if 75% lose then only 25% win. If those odds sound good to you, you should spend a lot of time in Atlantic City or Las Vegas.

No one is right about the market 100% of the time. Sometimes things happen that upset your trading plan, such as 911, or Libya, or Congress not compromising and threatening a government shutdown or an oil spill in the Gulf. However, spread trading allows you to balance your risk and increase your odds of winning. It doesn’t matter whether it is a call spread or a put spread. If you buy a call and then sell a higher call on the same stock, you have balanced your risk. For example; XYZ stock is trading at $41.00 a share. The November 40 call is trading at a bid of $3.85 and ask of $3.90 and the November 45 call is trading at a bid of $1.70 and ask of $1.75. The total call spread is trading at a bid of $2.15 and ask of $2.15.

Instead of just buying the November 40 call at $3.85, you could buy the November 40 call and sell the November 45 call for $2.15, in equal quantities thus saving $1.70. If the stock rises as you expected, you could close the call spread for more than $2.15 which is a profit. If the stock price falls after the call spread is executed, you could buy the November 45 call for less than you received when you sold it, which is a profit and then wait for the stock price to correct (rise) and then sell the November 40 for more than you paid which is a profit on both sides (legs) of the call spread. The same concept would apply to a put spread.

Call spreads and put spreads reduce your cost and balance the risk. By being both a buyer and seller simultaneously, you have increased your chances of winning. However, this doesn’t substitute for doing your homework of technical analysis and fundamental analysis on the underlying stock to increase your chances to win. Turn your next option trade into a winning trade. Stop losing money trading options. Use spreads to mitigate the risk and get more consistent returns.

General Forex

Forex Strategy You Should Use

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The Forex market is still an investment market, which means you are taking some minimal risks if you don’t know what you’re doing. Using the best of Forex secrets gives you an edge when you’re planning your Forex investment strategy. Being aware of the pitfalls and the latest technology, how to use it and what you need exactly to succeed will give you the tools you need in the Forex market to be one of the lucky investors that profit. Who knows, you may even be able to quit your day job after getting the hang of Forex trading.

The best forex strategy you can implement pre-market is the desire to learn all of the ins and outs of the forex market. You need to understand how to trade successfully. The more you learn, the better you’ll be, it’s that simple. Learning how to recognize the forex analysis and then act immediately will help to generate major dollars over the course of time. Finding the right tutorial for you is simple. Just do an internet search and select which one seems right for you. From there, select your forex trading strategy and begin to develop into a full-time trader.

Before you do a head-first dive into the forex market, take some time to set some limits for yourself. Discipline yourself and have the understanding that you’re not going outside of your comfort zone, i.e. your forex online strategy trading zone. By sticking to your self-enforced parameters, you’re giving yourself the best chance to succeed in the very beginning. That’s a confidence booster that money simply can’t buy. But before preparing your proper forex trading strategy and adhering to it, learn some helpful forex tips. They will definitely help you out when deciding which program is right for you.

Remember to know all you can about your forex trading market before you begin trading in it. Educate yourself about all of the currencies that you’ll be trading. The more you know about the country whose currency you’re trading with forex, the more accurately you’ll be able to predict various trends and upswings with the money. Play on the currency’s strengths to avoid other weaknesses. If the Swiss Franc has a higher value at a certain time of year, then stick with that. Do your own stat-keeping when it comes to forex analysis. That way you’ll know what the money’s doing, and be in the right position