Forex Trading

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My trading strategy is a “tested and proven” trading strategy which i use analyze forex and make money on a daily basis.
My trading strategy is an intra day trading strategy which is used to look out for good trading opportunities.
Apart from my wealth of experience and vast knowledge of forex market, I use a number of indicators to determine the direction of the market and also to generate and filter my signals so as to keep me out of the market when it not safe and an 80% probability of making a kill on every signal generated.

I use a number of indicators to calculate a number of market parameters like over bought and over sold level, moving average, average directional index, relative strength index, the market price level with respect to the Fibonacci lines, resistance and support,……. and i go for a buy when all indicators say buy on higher time frames (which are 1week, 1day and 4hours) down to the least time frame, which is the 1min. time frame and i go for a sell when all my indicators say sell on higher time frames down to the least time frame
Now, i don’t just jump into a trade like that at any time because all the indicators says buy or sell as the case may be.

At the beginning of my trading, day the first thing i do is to analyze the economic indicators (fundamental analysis) to see if there will be a high impact news scheduled to be released for that day which is liable to affect the market (if there is, i wait till after the effect of the news). Then i look at the higher time frames of the major pairs (i love trading pairs with low spread) to determine the trend direction of the market (that is if all the higher time frames indicates same direction), then i wait for the trading section of the pair, (say USD/JPY i wait for USD section to start). As soon as the section starts, i trade only pairs whose lower time frames to indicate the same direction as the higher time frames ( that is for pairs that have at least the daily and 4hours time frames indicating the same direction). But before i finally place an order i check the market price level for the pair with respect to Fibonacci lines to look for safe entry level on the 1min. time frame ie. after a 1min time frame retracement.
When i was still a beginner, i would open a buy and sell position on all the the major pairs (thats on a demo account) and as soon as we the USD section starts, i start watching for which of the trades will run into profit in the first few minutes to 30minutes to 1hours into the section. Then i enter the same position on that pair on my live account

For every trade i place during any section, i take profit between three and four into the section.
For my stop loss, i use a 25-30 pips stop loss.

Note: when trading with this strategy, stay away from pairs that are the ranging for that period
This strategy works for me very well and i use it to make consistent kills in the forex market.

Just as this strategy works for me, i know it will work for you.
In case of any question feel free to contact me with your question via the comment form on completeforexanalysis.blogspot.com and i will give you the answer to your question in my next write post.

COMPLETE FOREX ANALYSIS… Analyzing forex… making you a successful trader.

A lot of things can go wrong in the world of currencies trading. Your position can turn on you in an instant and that is why the Forex strategies that you implement are important aspects of your trading life. So, what makes a strategy essential in Forex trading?

Having a strategy helps you in a way that it puts you in the best position possible while preparing you for the worst possible scenario. Concrete and defined Forex Strategies help eliminate the presence of emotion in trading. Although there are no flawless strategies it is better to come in with a set goal, set amount you are willing to lose and length of time to trade because it significantly increases your chances of making money in the Forex market.

It may seem that setting a minimal goal in your for Forex trading system can limit your potential but quite the contrary. It actually sets you on your way to higher earnings. Setting limits to your earning can help eliminate emotions from your trading. These emotions can cause you to stay in the market longer then you actually have to. When emotion sinks in, it can coax the investor to ride highs to the point that they blindly follow a position even when it is no longer viable for them.

For example, an investor experienced a quick and significant rise in their position that he wanted to see how high it would go. He immediately removed the stop losses so his position would not be closed when the price dipped due to market fluctuation. In his computerized Forex Trading Systems, he saw the price of the currency pair goes up and down as the day went on. He stayed on the trade and closed at approximately the same amount he started in. In the end, he actually lost money in fees. If he followed his strategy and left the market when he made the money, he would still have ended positively for the day.

Setting the amount you are willing to lose may seem ominous to you but you would not survive the currencies market without it. Remember that the really good Forex traders know how to survive first and make money second. It has been statistically proven that a conservative strategy with solid risk management is more successful in the long term compared to high risk high volume trading. It is important to have conservative Forex Strategies when dealing with risk because it allows you to make more mistakes without losing your full capital.

As far as Forex Strategies, the length of time you are in the market is also important because your time is precious. While your money is tied into a trade, it cuts into your capital and your margin. If a position takes too long to show the desired results you are going to miss out on other possible trades.

Forex strategies are very important for any investor but it is also very complicated as well. Thankfully, there are Forex Managed Accounts that could possibly simplify things for a novice investor. With expert’s input and complex algorithm, the Forex strategies become simpler and hopefully making money becomes simple, as well.

When your trading strategy involves a technical analysis you will need to chart the data, which means that you must become comfortable with using charts to determine trends and indicators. You must able to spot ongoing trends and recurring patterns that disrupt the continuity of data. Charted data may be divided into two categories, which includes reversal patterns and continuation patterns. Reversal patterns indicate a market entry point or time to liquidate an open position. Continuation patterns indicate that a trend was disrupted and then continued in the direction of the original trend.

Market trends present a pattern of the market’s broad movement. Trend lines are determined by connecting two points on a linear graph of historical market data as either peaks or troughs in the data. Even though a trend may be established with only two points, more points provides a better picture of true market trend. Trends may be established for any chosen timeframe, from minutes to years. Trend lines may indicate an upward or downward pattern or they may not point in either direction. Data sometimes settles into familiar charting patterns

A common analytical technique is to analyze the intersection of trend lines with the most recent price. If a downward trend intersects with the most recent price, it indicates that you should buy. If an upward trend line intersects with the most recent prices, it indicates that you should sell.

Trend lines are controversial because many traders become confused as to where to actually draw the lines. Since trends are defined by price actions, trend lines are intended to be a tool for determining the direction of a trend. Upward trends represent higher lows and indicate that prices are going up while downward trends represent lower highs and indicate that prices are going down. With an upward trend, you should draw a straight line that connects the lowest low to the highest high and in a downward trend; you should connect the highest low to the lowest high. Prices are then expected to fall within these boundaries. Many traders are confused as to whether they should draw the lines at closing price highs and lows or the highs and lows of a particular period. They are confused as to whether the lines should be adjusted to account for spikes in the data, whether spikes in the data should be ignored or whether trend lines should be adjusted to the scale of the chart.

Advocates of trend lines use more sophisticated trend line channels. These channels connect the lows of price actions on one side and the highs of price actions on the other side and a purchase is made at or near the support trend line and a sale at the line of resistance. The objective is to buy cheap and sell at profit several times over the length of a price action. This can very profitable so long as price remains within the chosen channel. Should the price break out of the channel, traders need to make consideration for several factors and establish parameters for their measurements.

Each year there are a few trends that offer truly outstanding profits. They emerge quickly, move fast and pile up huge gains.

Most traders however fail to catch them because they don’t keep in mind this simple fact:

The Biggest moves start from new market highs NOT market lows.

This fact is significant as most traders particularly novice traders, like to:

“Buy low and sell high”

While this wisdom is commonly accepted, you will NEVER catch the really big trends if you follow it.

Why?

If a market starts to trend from a new market high (and almost all the biggest trends do) you will wait for a pullback that never comes and never get on board with the best risk to reward.

In currency trading a better way to trade is:

“To buy high and sell higher”

While you will miss a bit of the move that’s ok – the odds are on your side of the trend continuing.

If a market breaks up from a new market high, you have a trend in motion on your side and remember:

“A trend in motion is more likely to continue than reverse”

Catching the big moves.

If you constantly look for trades to breakout above resistance and make new highs then you can trade with low risk and high reward

You will also have the comfort of knowing most traders can’t do this; as they are stuck in the mindset of:

“Buying low and selling high”

Most traders lose in currency trading because of this inability to buy breakouts.

Breakouts also provide another advantage for traders low risk.

Why?

Because stop levels are obvious and tight, keeping risk small.

You can increase your odds of success further by:

1. Only buying breakouts of valid well established resistance that has been tested several times.

2. Using momentum indicators such as stochastics and RSI, to check price momentum is accelerating as the breakout occurs.

A breakout accompanied by an acceleration of price momentum increases the odds of the trade being successful.

Most FOREX traders see a big move develop and wait for a pullback that never comes. They then watch in frustration as the trade turns into one of the major moves of the year.

If you buy the breakout, you won’t miss these big moves and profits.

It may feel uncomfortable to do at times, but that’s why it’s so profitable – Most traders simply don’t have the mindset to do it.

So to make money in FOREX trading keep in mind:

Buy high and sell higher is the way to make money Not Buy low sell high!

Buy breakouts and you will increase your profitability, get low risk and catch the mega trends.

Good Luck!

This article is focused about two key factors for forex traders and how important it is. The time you spend trading can also affect the strategies you make, your trading plan, your stress levels, your free time, and the foreign exchange profits you produce.

First things first : it is not necessary for you to day trade the forex markets to be successful, and i guess not all agrees with the concept. But, the truth is that most traders who venture into day trading fail and lose their accounts.

What are the requirements of day trading and what makes them fail? One of the day trading patterns is to monitor live currency charts, have an hourly chart minute after minute, trading shorter time frame bars, meaning they you need to make instant decisions and be always there to complete a transaction. Day traders typically also hunts for smaller pip moves, make more trades and be constantly stopped out due to smaller volatility spreads.

Where is the fun in that? you have to be staring at charts all day, make quick decisions and make more trades (meaning more risks). Where is the time to watch, go out and work-out in there? You end up more stressed and at risk in the markets.

If this is your thing, no argument in that. But day trading should not be the only way to be successful in Forex. There is always a better way.

In fact, the other side of the coin say that you can be successful too in trading in the end of day, focus on long term trends and yield better profit than a day trader can ever get. Day trading losses are much more heart breaking with all the combined stress of whole day trading.

The positive factors of this type of trading is that it requires less time looking at foreign stock charts, more patience, and longer term goals. If you are trading for part time or want to have bigger profits with long term trends, end-of-day-trading is for you. If done right, you can spend at least 20-30 minutes a day trading and spending the rest of the time doing whatever you want. You may eat at a restaurant longer than trading, even your favorite episode of a sitcom is longer.

When considering a Forex trading method, look for a method that has been made especially for end-of-day trading, and has been made for longer and larger term profits rather than a method making split second decisions for very little or not gain at all.

People who have experienced trading in the forex market will all agree that it is not easy to make money trading. Many people are lead to believe that forex is easy money. The truth is that even when you have all the forex tools you need, it is still up to you to make sure that you will earn money or lose some. Strategy is important in your trades no matter what level of expertise and what ever software you have. Here are some tips on how to develop an effective strategy.

Check out some websites
There are websites that offer help in making an effective forex strategy. Most of them require membership. Others are offered for free but there is no guarantee that the strategy you’ll be able to make as effective as it can be. You will be the one to make sure that the strategy you are using will produce the result that you desire. It is there fore important that you have a clear goal that is attainable and realistic at the same time. Attainable goal is pretty hard to define as forex trading offers indefinite earning opportunity. Realistic goals would depend on what you can do with the knowledge you have and maybe with the help of the tools you own.

Consult an expert
It is possible to develop you own strategy as you grown in knowledge. Your forex strategy is a clear step by step plan of action that will result in realizing your goal. You may seek help from people who know more about trading than you do. This may require you to enroll in classes or mentoring course. Just make sure you got the right expert for your specific needs. There are many mentors that you can find in the internet. You will know how good they are because their refutation is acknowledged by many people in different websites. You could check out forums and discussion sites to look for these people.

Join a group
Another way of properly developing an effective forex strategy is by joining a group with similar interest. There are many people in the web who would like to mingle with others so they could get whatever information they need. They in turn will give out valuable information about their trading experience which you may found helpful in developing your own style.

It would not be very difficult to strategize if you are fervent enough to do it. The first step to a successful strategy is always a clear goal. Your goal will set you on the right track and will enable you to make right decisions. Whatever happens always go back to your goal and you’ll be on your feet again. Your forex strategy has to be flexible enough to allow changes and improvements as you go along the way.

If you’re a potential investment player who’d like to make it big in the business and financial world, then you go for forex trading. The FOREX, also known as the foreign exchange market is one of the largest financial markets in the world with and estimate of $1.5 trillion turn-overs every day. Here are a few strategies on how to make it big in the forex market.

Strategy One: Know your market. The best way to get advantage, earn profit and minimize losses is to familiarize yourself with the market and how the whole system works. In the forex market, the players are usually commercial banks, central banks and firms involved in foreign trade, investment funds, broker companies and other private individuals with large capital. With the speed and high liquidity of asset, most companies engage in this business than in any other trading venture. Transactions are done in a jiffy; there are no membership fees and there is always the allure and promise of big, big profit.

Trading is done in pairs. The most commonly traded currencies are usually the US Dollar, Japanese Yen, Euro, British Pound, Canadian Dollar, Australian Dollar and the Swiss Franc. The more commonly traded currency pairs are the US Dollar and the Japanese Yen, the Euro and the US Dollar, the Swiss Franc and the US Dollar. In Forex trading, everything is speculative and virtual. There is no actual product being sold or bought. The activity mostly consists of computed entries made on the value of one currency against another. Say for example, you can buy Euros with US Dollar, hoping that the Euro will increase it value. Once its value rises, you can sell the Euro again, thus earning you profit.

Strategy Two: Learn the language. There are three concepts you need to know in the currency market. Pips refer to the increase of one hundredth of a percent of the value of the currency pair you are trading. Usually each pip has a value of $10 or $1. Volume is the quantity or amount of money being traded at one particular time in the market. Buying is the acquisition of a particular currency. A trader buys with the hopes that the price of the currency will increase. Selling is putting a currency up for grabs in the market because of a potential or possibility of a decrease in its value. There are also two techniques of analysis usually used in this business – the fundamental and the technical analysis. Technical analysis is usually used by small and medium players. Here, the primary point of analysis revolves on the price. Fundamental analysis, on the other hand, is used by bigger companies and players with higher capital as it involves looking at the other factors affecting the value of a particular currency. In this type of analysis, the player also looks at the situation of the country, particularly issues like political stability, inflation rate, unemployment rate, and tax policies as these are seen to have an effect on the currency’s value.

Strategy Three: Develop a sound trading strategy. Your trading strategy would depend on what kind of trader you are. The basic thing with developing a trading strategy is to identify what kind of forex trader you are. A good trading strategy should lessen, if not, eliminate losses. Plan also the size of your transactions. It is better to conduct many different trades than one huge transaction. Not only does it develop discipline, but it also lessens any possible loss as only a fraction of the capital is affected. Part of a trading strategy is developing the values of discipline and proper money management.

Strategy Four: Practice. Try paper trading, a great way to practice your skills, see how the market works and get acquainted with the software and tools being used. There are online brokers who allow free paper trades, which allows practice and experience before doing it with real money.

Strategy Five: Choose the right forex dealer. Make sure that they are regulated by the law. Take not of dealers with investment schemes that give out too-good-to-be-true-just-false-hopes promises. Look at investment offers before getting started.

Forex trading may seem easy and manageable. But the emotional stress, the demands and challenges of being a forex trader requires more than just the knowledge of the market. It requires more than just a keen and sensible head for business. It’s all about a gameplan, a strategy.

Analysis is the backbone of all Forex trading. If you want to succeed in your Forex trading, you must learn to analyze the market and its trends. Fundamental analysis and technical analysis are the two common types. Today, though, we will focus on fundamental analysis and how it is used in the Forex market.

Both political and economic changes can affect the market and currency prices. Fundamental analysis reads these changes and foresees how they will cause the Forex market to rise and fall. It gathers information from economic policies, inflation, news reports, and growth statistics and uses it to form a highly educated guess of the future.

Seeing The Big Picture

Though fundamental analysis cannot precisely predict the future, it can be employed by traders to comprehend a picture of the changes and fluctuations in currency prices. Technical analysis is more commonly used for specific planning and you actual buying and selling decisions. But fundamental analysis is crucial in gaining an understanding of the market and in forming your decisions.

The thing that affects currency prices in the Forex market is the element of supply and demand. And, of course, supply and demand is shaped by economic atmospheres. A couple things that have an effect on the economic condition are the strength of the economy and interest rates. GDP, the Gross Domestic Product, is the thing that affects the strength of an economy.

One thing that is helpful to fundamental analysis is that “indicators” are given by the government and academic sources about the state of the economy. These indicators are relied upon by many investors and are trustworthy. They are released sometimes weekly and other times monthly.
There are many things that are examined in fundamental analysis besides interest rates and the economy. The Producer Price Index (PPI), Consumer Price Index (CPI), the Purchasing Manager’s Index (PMI), and retail sales are all factors that must be included.

But as for interest rates, they can have a great effect on the price of a currency. It can either be negative, or in many cases positive.

Making Sense Of A Complex Market

Analyzing what the effects of these many elements will have on the Forex market is quite complex, but through fundamental analysis, it can be greatly beneficial to your trading.

Now, I think some time should be spent on international trade. When the international trade balance is deficit, which means that there are more imports than exports, this is definitely not a good indicator. Deficit trade balances result in a devaluation of the currency. However, the market expectations can determine if a deficit trade balance will turn out to be disadvantaging or not. It will have already been planned into the currency prices if a country has a continual deficit trade balance.

Another indicator is the CPI, or Consumer Product Index. It is the way to measure the cost of living. The PPI, or Producer Price Index, measures the price of the production of goods. The GDP, or Gross Domestic Product, measures the cost and value of all goods and jobs in the country. One great indicator is the M2 Money Supply, which gives the total amount of currency.

There are 28 indicators used in the United States to help you with your analysis of the Forex market and to help you form better judgments of market conditions. If you have a thorough understanding of an overview of the market, you will trade better and make great financial profit.

The Forex currency market is the world’s largest financial market where the currency of one country is exchanged with another through an exchange rate system. The purpose of trading is to aquire profits from the purchase and sale of foreign currencies. The free-floating of currencies in the market turn over at a given time are determined by the supply and demand. The currency rate is run through telecommunication over the massive network of banks. This telecommunication takes place 24 hours a day, Monday through Friday. The economy has a strong influence on the currency market and traders profit from the fluctuations based on a principle “buy low sell high” or vice versa.

The currency results will differ between the vast number of countries that exist in the world, but the currency information can be obtained both easily and quickly. Trading has become a very popular way to make money through a mutual exchange. Since everyday folks now have access to the internet, forex currency trading can now be traded by anyone, so it’s not just for the big banks and financial institutions as it once was.

If you are interested in forex, you can find out all relevant information as well as currency rates by searching the Internet. You can also take a forex trading course that allows you to understand just what it is and how it all works. There are many books, ebooks and videos available to learn about trading currencies and these can be excellent resources for not only learning this business but finding very profitable forex trading systems and strategies.

To better understand foreign currency, it is a good idea to have a good working knowledge of the currency in other countries. The more you know about the currency exchange rates between your country and one with whom you are considering trading, the easier it will be to determine when to trade, how to trade, and with who to trade.

You can even learn forex trading online with free tutorials, and can obtain a free practice account to help you get used to how it works. If you are thinking about taking part in forex trading, it might be advantageous to you to check out what others have to say about it. Consult bankers and other entrepreneurs who are well-versed in forex. A banker can better explain the currency types and rates, as well as the foreign exchange rate for any given time. Others who have participated in forex trading can be a great resource and can better explain the pros and cons and how you can profit from this business opportunity. The courses and tutorials will help you learn the system, and the practice account will give you a real-time idea of what to expect from the overall experience.