Deciding to venture into Forex trading is a big decision. Understanding the main principles of forex trading and the trading philosophy ensures the profit, which you as an investor or trader is looking for.
Incorporating the concept of forex position trading in a day trading environment can result in huge profit from the forex transactions.
In Forex position trading, a long position is a situation in which one purchases a currency pair at a certain price and hopes to sell it later at a higher price. In this case, the trader profits from an increase in price.
This is also referred to as "buy low, sell high". On the other hand, in Forex position trading, if a trader thinks a currency pair will fall, he will sell it with a hope to buy it back later at a lower price. This is known as a short position, which is the opposite of a long position.
In forex position trading, a trader has a long position on one currency of the pair and a short position on the other currency. So, while forex position trading, a trader defines his or her position as an expression of the first currency of the traded pair, which is known as the base currency.
The second currency is known as the counter currency. In forex position trading, the trader takes a long position on a pair when he or she buys the base currency. If the trader sells the base currency, he/she shorts the pair.
For example, if the current rate for the USD/JPY pair in forex position trading is 120.93, which means it takes 120.93 Yen to exchange for 1 Dollar and if the trader buys the Dollar while selling Yen, he is buying or longing the USD/JPY pair.
When the value of the base currency, here the Dollar, is rising, the rate will be moving upwards. If the rate changes from 120.93 to 121.50, it will take more Yen to buy the same amount of Dollars.
If the trader was to sell the Dollar and buy Yen then he or she would be shorting the pair. By taking a long position on the pair in forex position trading, the trader will wish to sell the Dollar back versus the Yen at the higher price.
In forex position trading, when you enter a trade you either sell the currency pair, or buy the currency pair. When you exit you do exactly the opposite. So when entering forex position trading you may short the pair, which means you sell it in hope that it will go down, so you can buy it back at a lower price and make money on it.
In order to get out of the forex position trading you must buy back the pair that you sold. The same goes for going long on the pair. So effectively it is the position of the currency pairs, which govern the amount of profit you are going to generate in forex position trading.
"An Article from http://www.instantforexincome.com."
As an investor in the forex market, you must know the importance and impact of a methodology involving technical analysis.
Candlesticks and forex should therefore sound as inseparable phrase because it is perhaps the oldest and proven method for successfully predicting the future price trends from available price and volume data.
This method of analysis evolved from the techniques used by the Japanese Rice traders in 18th century in Japan where Munehisa Homma of Dojima Rice Exchange, used past prices to predict future price movements and generated an enormous amount of wealth. The same concept of Candlesticks was adopted to analyze the Forex market that turned out to be overwhelming.
The Candlestick in forex trading considers the thought processes of the majority of the investors in the markets and generates signals reflecting an investors’ emotion. This shows the unique appeal of Candlestick and forex studies based on them. A chart pattern in Candlestick presents forex data in a dramatically dynamic visual way where you can identify a change in trend to magnify your profits.
The Candlesticks in forex have basic patterns comprising Long days, Short days, White Marubozu, Black Marubozu, Spinning tops, Stars, Rain drops. The reversal pattern in candlestick for forex has Dark Cloud Cover, Engulfing, Evening Star, Harami, Morning Star Doji, Piercing Line, Three Black Crows, Three White Soldiers. Other than these the candlestick patterns in forex can be continuation in Falling Three Methods or Rising Three Methods.
You can present the open, high, low, and close in candlestick for forex. The candlestick will be a hollow (white) when the close is higher than the open,. If the close is lower than the open, the candlestick will be filled (black).
Thin lines above and below the candlestick body in forex data, represents the period's entire trading range, which is known as the shadow. The top of the upper shadow in candlestick for forex, represents the high and the bottom of the lower shadow represents the low.
Candlestick and forex are the best example of a winning combination. From the candlestick pattern the forex trader will be able to see whether the trading extended well beyond the opening and/or closing price or was it confined closely to the open and/or closing price.
If you know how to read the Candlestick in forex you can visualize the trends it reflects. Long white candlestick and forex will show strong buying pressure – which means that the prices advanced significantly from open to close and with aggressive buyers. A long white candlesticks in forex chart after an extended period of declines, can mark a turning point or support level.
"An Article from http://www.instantforexincome.com/."
Forex Mobile Trading Software is the latest technology enabled service for trading currencies while on the go! With Forex Mobile Trading Software you can operate your trading from anywhere and at anytime.
Most of the Forex Mobile Trading Software solutions are comparable to any Personal Computer based forex trading platforms with the advantage of physically carrying it with you wherever you go.
Forex Mobile Trading Software is user friendly and easy to operate. You can have an enhanced version of one such Forex Mobile Trading Software for your pocket PC as well. No matter where you go, you can keep up to date and place currency-trading orders on real tradable prices.
With a Forex Mobile Trading Software you can use your web-enabled mobile devices, including phones and Personal Digital Assistants (PDAs) to connect to the trading platform provided by the vendor to check rates and news.
With Forex Mobile Trading Software you can have live streaming quotes, full-color charting, complete access to real-time transaction history, account statements and position, margin and risk-analysis. Forex Mobile Trading Software is aimed at bringing the trader even closer to the market. With a Forex Mobile Trading Software, you can place stop and limit orders to perform as either protective orders for open positions or to open new trades at certain designated market levels.
Forex Mobile Trading Software can keep you connected to the market 24 hours a day, seven days a week, and from anywhere around the world. This sophisticated Forex Mobile Trading Software keeps you in touch with the vital market news and rates, and allows you to trade the market with greater ease.
With few simple steps you will be able to access the Forex Mobile Trading Software for practical use. First you will have to log into your account by using your account username and password. After you log in, the Forex Mobile Trading Software will ask you to select the option – for example, rate, which is the first step towards placing a trade.
In the next step the Forex Mobile Trading Software will ask for the other parameters like the currency pair and selecting to either Buy or Sell followed by details like Bid corresponds to a Sell and Ask corresponds to a Buy.
You can place orders including Market, Stop, Limit, and OCO through the Forex Mobile Trading Software trading platform. Confirmation windows will allow you to terminate your action. Forex Mobile Trading Software also offers you with the flexibility to open orders, open trades, and settled trades for the day and the week.
The security used in the Forex Mobile Trading Software is similar to that used for Internet sites and wireless Web sites: Security Socket Layer (SSL) and HTTPS, which is one of the safest and most secure systems in existence today.
"An Article from http://www.instantforexincome.com"
A Forex Trading Style based on sound study and technical analysis can become your magic wand while operating in the forex market. Some of the most common Forex trading styles may include scalping, swing, position, discretionary, and automated trading. However, if you are a new investor it is better to first understand which forex trading style suits you best.
There are basically two types of Forex trading systems -- mechanical and discretionary, on the basis of which you can formulate your forex trading style. The trading signals that come out of mechanical systems are mainly based on technical analysis applied in a systematic way. In discretionary systems you use experience, intuition or judgment on entries and exits.
If you are methodical and not willing to invest until you understand every aspect of how the different political, economic, and psychological factors going to affect the currency rates then your Forex trading style is going to be based on trends. Now you can predict currency momentum trends by understanding all factors that affect exchange rates between different economies.
On the other hand, if you are typically looking for the highest profits in the least amount of time, your Forex trading style will be based on the strategies. For example, Scalping is a favorite currency trading strategy as it involves predicting future exchange rates a few hours or days into the future.
By mobilizing capital faster, you can buy in, make a quick but reasonable profit, and get out before the rest of the market has had time to adjust. So in this particular forex trading style you can make your profits before the markets can retrace and are known as counter-trend investors.
If your forex trading style is based solely on technical analysis you will focus upon the recent history of the currency exchange rate movements to predict future changes. In this specific forex trading style, you consider the fundamental indicators such as economic or political news as inconclusive and unreliable predictors of future price movements.
However, through technical analysis, it is possible to examine how similar political or economic news events affected past prices - and then you can formulate your own forex trading style to predict the future price movements.
You should not develop your forex trading style exclusively based on only one type of analysis. Although you will find that the trend investors and counter-trend advocates do differ greatly in their forex trading style, trend investors are expected to do better when they focus on fundamental factors and their potential effects on currency exchange rates.
Here, as an investor you are incorporating many factors GDP growth, interest rates, trade deficit/credit figures, and commodity prices and their impact in your forex trading style.
For example your forex trading style should choose the right currency pair. You must decide on how long you plan to stay in a trade. You should also have clear exit plan. You can place your stops and limits accordingly.
Your forex trading style should guide you in deciding how much you are willing to risk and how much you are looking to gain. Always keep track of important news and technical levels, which may be tested within your time frame.
"An Article from http://www.instantforexincome.com."
The foreign exchange market is the market where currencies of different countries are bought and sold. It is primarily an over the counter market with trades accounting for most foreign currency transactions.
Apart from large commercial banks, the other participants of foreign exchange market are brokers who match buyers and sellers, customers of brokers or banks, and central banks. It is necessary to know the basics of foreign exchange market before you actually start trading forex.
But the main question is why do we need foreign exchange market? If we want to buy foreign goods or a country wants to invest in other country, companies or individuals first need to buy the currency of that country with which they are going to do the business.
There comes the requirement of foreign exchange market or FX market where one can buy and sell currencies. Here, the price of one currency is determined on the price of the other currency. This rate is called exchange rate.
When we talk about the basics of foreign exchange market, we should know that this market is not like traditional market where trade takes place. Foreign exchange market is a worldwide network of traders, connected by telephone lines and computer screens.
There is no central location of this market. However, there are three major centers that handle the majority of transactions: United States, United Kingdom and Japan. The remaining transactions in the market are controlled from Singapore, Switzerland, Hong Kong, Germany, France and Australia.
Usually, a trading day starts at 8 am in London and ends in Singapore and Hong Kong. When it is 1 pm in London, the New York market opens for business. Later in the afternoon the San Francisco market opens. As the market closes in San Francisco, the Singapore and Hong Kong markets start their day – so trading goes on 24 hours. The main reason that makes the markets open 24 hours a day is - high demand of currencies.
The foreign exchange market is not only an enormous market in the world; it is also the most volatile market with an estimated 2 trillion dollars changing hands everyday. Traders in the foreign exchange market make thousands of trade daily by buying and selling currencies while exchanging market information.
The money that is traded are used for the import and export needs of companies or individuals, for direct investment, to profit from short-term, fluctuations in exchange rates, to manage existing positions and to purchase foreign financial instruments.
According to the basics of foreign exchange market, 6 major currency pairs are traded most in the market. These are: EUR/USD, JPY/USD, USD/CHF, AUD/USD, GBP/USD and USD/CAD.
The basics of foreign exchange market also state that, as a trader you should constantly try to predict the behavior of other market participants. If the traders can correctly anticipate their opponents’ strategies, they can act first and beat the competition.
"An Article from http://www.instantforexincome.com/. "
Articles, Forex Scalping
Liquidity: Scalpers like to trade in more liquid market since they can make thousands of trades a day to add up their small profits offered on each trade.
Volatility: Stable forex market attracts forex scalpers. If the prices don’t move throughout the day, the scalpers can still make profits by placing their orders on same Bid and Ask and can make thousands of trades. They do well in trade, as they don’t have to think about sudden price changes.
Time frame: The scalping method of Forex trading is done on a very short time frame. People even make profit from the market waves that are too small to be seen even on the one-minute chart. Therefore, the more the number of moves during the day the scalper can make more profits.
I am doing a Google search and I found these sites about P&F charts:
http://www.investopedia.com/terms/p/pointandfigurechart.asp
http://www.investopedia.com/articles/technical/03/081303.asp
I am selling my sidebar space for trading money. You can buy links on my sidebar. Just click on the paypal donate icon and send me and email.
I not ashamed to say that I am accepting donations to my trading fund. I have decimated my account and my wife will not give me anymore trading money.
I have learned my lesson. I believe I can trade better now. So if any of you is willing to bet your $1 or more on this forex trader then click on the Paypal link on the right side bar.
I would be greatful for your donations. I will add place your name or a link on my sidebar for anyone who makes a donation to my trading fund.
I get my forex trading signals from P&F charts.
It is very simple. I scan every currency pairs P&F chart. Then when I see a possible reversal like a new 2 or 3 box reversal. Then I take the trade. I try to avoid reversals where the price has not moved away for a long time from the reversal point.
As for any existing trade. I add up to current trades where I see that the boxes are continuing in my direction. But I lesson the size of the lot relative to the initial trade. That way even if I lose on the suceeding trades, I would still come out a winner from the first winning trades.
I close my trade whenever I see a reversal.
Thats it. It is very simple that it makes me cringe just seeing it win. I have only tried it for a few weeks but I am very satisfied with tha simple trading system.
Check out my results by clicking here.
Trade Updates
This is an image of my latest trading strategy where I get my trading signals from Point and Figure currency charts aka P&F.
This is a description of a point and figure chart that I got for www.oanda.com:
Point & Figure (P&F) charts focus on price movements and do not present a linear representation of time. By removing the less-significant price movements (considered as noise), P&F charts potentially make it easier for traders to identify support/resistance levels and market trend lines.
In summary, P&F charts give traders a different perspective of the market comparing to the more traditional bar or candlestick charts and hence can be used as another guide to better understand the structure of the forex market.Point & Figure (P&F) charts focus on price movements and do not present a linear representation of time. By removing the less-significant price movements (considered as noise), P&F charts potentially make it easier for traders to identify support/resistance levels and market trend lines.
In summary, P&F charts give traders a different perspective of the market comparing to the more traditional bar or candlestick charts and hence can be used as another guide to better understand the structure of the forex market.
Click Here to go to the Oanda P&F webpage.
I am trading a demo account right now from Oanda and I am doing great! All my winners are great trades and even my losers are good trades also. The reason why I appreciate even my losers is because I was able to always get out when the market is about to turn. Then I take the reverse trade. It is just fantastic. I will try to follow the P&F charts and if I really do very well on my Oanda Demo Account then I will probably fund my real trading account again.
This is the lowest of the low of my account. I started with a seed money of $500. I was able to bring it up to $6000+. Then I was already dreaming of bringing it up to $20,000 but then it all started to crumble. Its like a wet sand castle that dried up in the heat of the sub-prime sun.
Now I only have $8 in my account. That is after I won a 600 pip trade on the USDCNY. Before it was only $7. Well all is well that ends well, whatever that means.