Tuesday, December 8, 2009

STAGES IN LEARNING FOREX; WHICH ONE DID YOU MISS?

I have come across so many people who told me how messed up and disappointing they are in forex trading despite all the hope they had in making it from the market. Some have not stopped asking, what is wrong since they have paid out their hard earned money to learn forex trading, but end up with the worst result. Some peolple have given up on forex while some are still searching for their answers.

This piece of write up is to guide, alert and instruct aspiring and already-made forex traders on the must follow stages they need to follow in other to be like the professional traders they want to be. May be there is something wrong with your stages of learning which you need to correct.

Stages in learning forex:

STAGE 1 - this is the stage of discovering about this market and the potentials it has. A discovery stage. At this stage, you feel motivated and ready to give your best short in making it big in the forex market.

STAGE 2- this is the stage one goes for practical one-on-one training. Some people make the mistake of replacing this stage with one day seminars making themselves half-baked forex students. Even if you attend seminars, you still need to sit down with a good forex trainer for some days (like 3-5 days) in order to have an in-depth understanding of what forex trading is all about.

STAGE 3- this is the stage you need to train your self using demo-account for weeks or months. Forex trading is an art which needs practice in other to master it. Practice all the strategies and trading system you have received and browse for more in other to give you more understanding of how the market works. From my personnel experience any day i opens my platform to trade, i do learn a new thing. There is a lot to learn in forex and you will discover on your own those areas your trainer did not teach you.

STAGE 4- the stage to train your emotions. When you are comfortable with your forex skill and confident enough to go live trading, you still need to battle with emotions of fear, greed, hope, anger and pride. This is your real bucks we are talking about here so, your emotions will definitely come to play. Train your emotions and stay disciplined. I recommend that when starting your live trading, don't hope to carry all the money in forex market at once but trade with a very little risk of about 0.5% or lesser of your trading capital.

STAGE 5-at this stage, you are now the master of your trading and can increase the your percentage risk to 1-5% of trading capital as professionally recommended. Just know that nobody knows it all, we stop learning only when we are in the grave. Change is the only thing constant in life so you should update your knowledge as the market changes with time.

FOR RELATED ARTICLE see: REASONS WHY MOST TRADERS FAIL IN FOREX TRADING

Thursday, October 22, 2009

TIPS FOR SUCCESSFUL SWING TRADING

Swing trading is a method of trading which aims to take advantage of the swings that price makes as it moves from level to level. Unlike other styles of trading, swing traders usually aim to open and hold a trade for several days to a week. Because of this, there are certain tips or strategies that a trader should implement to take advantage of the movements that price makes.

1. Trade for the long term - Swing trading is a medium long style of trading. Unlike day trading which opens and closes trades within a single day period, swing traders are holding trades for several days. This is necessary to catch and ride the swings as price moves up and down in the market. Holding trades for too short a period of time may result in you getting out too soon before price begins its next swing.

2. Plan your trade and trade your plan - It can't be said enough. Any trader needs to make sure that they have a solid trading plan or strategy before opening any trade. If you don't have a plan then don't trade, at least not live. Spend your time demo trading and developing your own style of trading before you go live.

The best tips for swing trading are to be patient so you can catch the next big price swing and follow a plan. To swing trade effectively, you must be patient and have a proven system that allows you to take advantage of the swings that price makes as it moves along through the market.

HOW TO IDENTIFY A PROFITABLE FX TRADING SYSTEM

Traders are always on the look out for that "best" trading system irrespective of their years of experience in the Forex trading. There are certain things that you should be sure of before investing in a trading system.

Of the market being flooded with information regarding various trading systems with reviews and guides each one explaining how perfect they are it is certainly a tough choice for the traders to choose a system that suits their needs. Whatever your need may be there are three special aspects that you have to look out for in any system or strategy to determine whether it is profitable.
These include identifying a market trend through higher time frame like 4hr chart, daily chart, weekly chart. So following these trends is one of the simple ways to make money. Although this is not the ultimate way to make money this is one profitable method for the newcomers. It requires only about 30 minutes of your daily schedule unlike other strategies where you have to spend hours on trading. Therefore you can utilize your free time by learning about the forex trading.

The simplicity of the system also plays a key role in determining success. If the trader is a beginner he has to understand the system and follow the instructions as his knowledge of the Forex trading is limited. A system with no more than three indicators is best to begin with for those who are new to the trading arena. This in a way minimizes confusion and eliminates potential losses as a result of misinformed trading session. So a simpler system is more profitable for a beginner than overloading yourself with a complex one.

The system should be clear of any error or doubts when using an indicator. If only all the conditions are satisfied a trade should be placed. The guidelines also should be clearly mentioned regarding the position size, amount, the stops that should be made and the time to take profit on a trade. It is very important to have a well devised trading plan to avoid time losses.

Winning with a 100% profit should not be criteria but to minimize the loss percentage and to maximize the overall profit is what you should watch out for. Only way to determine a profitable system is to test over a period of time in the live market and determine the kind of profit and loss from the trading system. Although you may lose few trades in the beginning but its part of a trading strategy to increase your profits in the long run.

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