A strange sense of mystery is something that can often be felt when talking with people about stocks, and that's without mentioning Futures or the Forex market. Well, let me tell you, trading the financial markets can be very rewarding both financially and personally.
It is so liberating just to know that you have taken (at least some) control of your financial future, and that's even without taking to consideration the short term financial benefits and all the thing you could do with a little of extra money in your pocket.
There are two main schools to consider when approaching the financial markets: Investing and Trading. While a trader will buy look to buy a financial asset (bonds,stocks, options, futures, currencies, ect) in order to sell when the price rises. Trading usually refers to holding financial assets for a relatively short period of time. Time frames can change from trader to trader. A trade can be buying and selling in a few weeks period, few days, hours or even minuets.
Investing on the other hand, usually refers to holding a financial asset for a long period of time in order for it to gain value. A long term investor could ignore short term movements of price that a trader might like to take advantage.
As there are two main schools for handling the market there are two main approaches to analyzing it and the financial assets. One analyzing method is usually referred to as Fundamental Analysis. Fundamental analyst considers mainly economical data such as business environment, macro analysis, annual reports with balance sheets, cash flows and profit statements.
The second method is called Technical Analysis. A technical analyst makes his decisions based on price movement, price patterns and various statistical tools, he gets his data from price charts. Usually, technical analysis is more associated with trading than with investing, while fundamental analysis usually comes to mind when talking about investing for long periods of time.
As I wrote at the beginning of the article trading (or investing for that matter) can be very satisfying both personally and financially, BUT, and that's a big but, you have to take small steps when begging to trade (or invest) starting with learning as much as you can about it, and the reason is very simple, as money can be made it can be lost, the educated and the experienced is more likely to succeed.
If you want to find out more about the subject, just browse this site.
Monday, October 27, 2008
Sunday, September 7, 2008
Can You Be A Successful Trader ?
The internet is bombarded with so many advertisements that promise you, you can achieve great wealth in a very short time and with almost no effort of your side. Well, I find it very hard to believe. A few times I even checked out some of those and not surprisingly, found out it turned out to be just a waste of my time. I'm quit sure you have seen at least a couple of those advertisements.
Many of those advertisements are forex (or forex trading) related and try to tell you about huge gains are waiting for you, YOU JUST HAVE TO START TRADING and money will pour your way. They make it seem as if it's easy like growing dollars in a planter.
Well, real life as I know it doesn't work that way. There's no money lying around and waiting for you (or for me) to pick it off the floor. If there was some magic formula for instant wealth with no hassle, why all the lists of the richest people always contain people that worked hard for a very long time (the wealth is sometimes accumulated thru whole generations)??? That said, you can try and use the forex market to MAKE SOME CASH. But it probably won't be easy, at least at first. In addition it will probably take some time to learn and it could cost you money if you lose some trades.
The way to make money by trading forex (or any other financial market for that matter) starts with learning and practicing. In time you could acquire the necessary skills and tools to be a successful trader. Today it's more accessible via the World Wide Web, so you can easily participate.
Some traders I talked to say that it could take month (maybe even more) until you start making some real money. As I wrote above you should start by learning. You can read books, read online and take courses and so forth. After you do that (or even while you learn) you can start paper trading (doing as if you are really trading but without real orders. just write on paper what you would have done for real if you were trading with real money.) or trading with a demo account, the later is probably more convenient and you can find on the internet forex brokers that will allow you to open a demo account.
If you want to start building your way to wealth you have to start learning and practicing. A good place to start is this site . Whether you are a beginner or an experienced trader you can find this site useful, it contains useful articles and links.
Good luck and successful trading.
Many of those advertisements are forex (or forex trading) related and try to tell you about huge gains are waiting for you, YOU JUST HAVE TO START TRADING and money will pour your way. They make it seem as if it's easy like growing dollars in a planter.
Well, real life as I know it doesn't work that way. There's no money lying around and waiting for you (or for me) to pick it off the floor. If there was some magic formula for instant wealth with no hassle, why all the lists of the richest people always contain people that worked hard for a very long time (the wealth is sometimes accumulated thru whole generations)??? That said, you can try and use the forex market to MAKE SOME CASH. But it probably won't be easy, at least at first. In addition it will probably take some time to learn and it could cost you money if you lose some trades.
The way to make money by trading forex (or any other financial market for that matter) starts with learning and practicing. In time you could acquire the necessary skills and tools to be a successful trader. Today it's more accessible via the World Wide Web, so you can easily participate.
Some traders I talked to say that it could take month (maybe even more) until you start making some real money. As I wrote above you should start by learning. You can read books, read online and take courses and so forth. After you do that (or even while you learn) you can start paper trading (doing as if you are really trading but without real orders. just write on paper what you would have done for real if you were trading with real money.) or trading with a demo account, the later is probably more convenient and you can find on the internet forex brokers that will allow you to open a demo account.
If you want to start building your way to wealth you have to start learning and practicing. A good place to start is this site . Whether you are a beginner or an experienced trader you can find this site useful, it contains useful articles and links.
Good luck and successful trading.
Sunday, July 20, 2008
3 Sure-Fire Ways to Enhance Your Forex Trading Education
Author: John J Callingham
Forex trading education is in all sense of the word, vital to those who are keen on entering the foreign exchange market. Contrary to what most people think, success in foreign exchange trading is extremely dependent upon one's level of financial literacy, which in turn determines one's ability to make sound investment decisions. Treating the foreign exchange market as a Las Vegas Casino is often the recipe for financial ruin. In this article, we provide you with 3 sure-fire ways to enhance your Forex trading education.
About the Author:
Click Here to get FREE access to the secret Forex Trading newsletter where you can learn about Forex Currency Trading. John Callingham is an authority on Forex Trading providing valuable advice at http://www.forexsimpletrading.com.
Forex trading education is in all sense of the word, vital to those who are keen on entering the foreign exchange market. Contrary to what most people think, success in foreign exchange trading is extremely dependent upon one's level of financial literacy, which in turn determines one's ability to make sound investment decisions. Treating the foreign exchange market as a Las Vegas Casino is often the recipe for financial ruin. In this article, we provide you with 3 sure-fire ways to enhance your Forex trading education.
Enhance Your Forex Education Tip #1- Expose to Forex Strategies
One of the best ways to enhance your Forex trading education would be to exposure to a wide variety of Forex investment strategies. It is often the case that the best Forex investors are often the most voracious readers of investment literature.
Exposing yourself to various investment strategies is often the key for success in Forex trading as you would be able to learn from the experience of these individual's who have written the books in the first place. Over time, you would be able to evaluate the feasibility of each strategy, modifying these to suit your investment needs.
With the proliferation of the internet as a telecommunication tool, information has become more readily available than ever. Make use of these to your advantage. Most Forex brokers periodical analyst reports on various currencies, so read them in order for you to determine the best strategy to follow in order for you to be able to reap the highest returns on your investments.
Enhance Your Forex Education Tip #2- Practice, Practice, Practice
Practice is perhaps one of the fastest means of enabling you to enhance on your Forex trading education. As with most other things in life, theory without practice would often be of little value.
The same statement could be made here with regards to Forex trading as experience is often the key to improvement. Most online brokers today provide a free demo account for use by members of the public. Sign up for one of these and use these.
These accounts allow you to use the same state-of-the-art charting tools and resources, while allowing you to make real time trades using "paper credits". As a result, you would be able to get practical hands-on experience as you are now able to experiment with the various trading strategies you have come into contact with through your investment literature reading list.
With no risk, you would then be free to evaluate for yourself the trading strategies that suit you the best. Critically evaluate your paper profits and losses and learn from your successes and failures.
Enhance Your Forex Education Tip #3- Get into a Forex Mastermind Group
Finally, it is important for you to get into contact with a bunch of like-minded Forex investors who are ever keen on improving themselves. It is relatively easy to find internet forums dedicated to Forex trading.
Sign up for one of these forums and participate actively on them. You would be able to profit from the mistakes of others through the various sharing sessions held online. Likewise, seek constructive opinions from others with regards to your current trading strategies such as:
- What are the upsides?
- What are the downsides?
- Can things be further improved?
Such constructive feedback sessions would definitely go a long way in enhancing your Forex trading education. Keep the above mentioned methods in mind and you can be sure of greater returns through your Forex trades in the future. All the best!
About the Author:
Click Here to get FREE access to the secret Forex Trading newsletter where you can learn about Forex Currency Trading. John Callingham is an authority on Forex Trading providing valuable advice at http://www.forexsimpletrading.com.
Thursday, July 17, 2008
How to Profit From Forex Using Technical Analysis
Author: Ian Armstrong
Technical analysis is price movement study. You can track the history of price movement by using price charts and try to work out which way the prices are likely to go in the future.
About the Author:
Ian Armstrong is an avid Forex enthusiast.
Technical analysis is price movement study. You can track the history of price movement by using price charts and try to work out which way the prices are likely to go in the future.
Online Forex brokers will give you a variety of different tools which you can use in technical analysis. Here are some of the most common ones:
Bollinger Brands
These are used to measure the volatility of the market. They comprise 3 lines:
1. A moving average in the center.
2. A lower band which shows the moving average minus 2 standard deviations.
3. An upper band which shows the moving average plus 2 standard deviations.
When the volatility of the market is low, the bands will come further together. When the volatility of the market is high, the bands will spread further apart.
The Bollinger Bounce
The middle band usually stays between the outer bands. The outer bands can be compared to border control. When the middle band gets too close, it is bounced back towards the middle. This is why it is called the Bollinger Bounce. It is helpful to be aware of this because if you see the middle band getting close to an outer band, it will probably bounce away.
This strategy works the best when there are no clear trends and prices seem to be fluctuating.
A good strategy to use to spot an early trend is called the Bollinger Squeeze. This is when the bands squeeze closely together and can often mean that a breakout is imminent. If the middle band breaks through either the lower band or the upper one, this means that the trend is likely to continue to go in that direction.
Parabolic SAR (Stop and Reversal)
This indicator is used to identify trend reversals. It is an easy indicator to read. Dots appear on the chart in positions either below or above the candles (the formula used to work out where the dogs must go is rather complicated).
Dots below the candles are an indication to buy and dots above the candles are an indication to sell.
Parabolic SAR does not work well when price movement is small but it does work well when there are clear trends, either in an upward or downward direction.
Stochastics
Stochastics has a scale from 0 to 100. It is an indicator used to measure oversold and overbought conditions in the market. When the lines are over 80, that means the market is overbought. If this happens, a downward trend might form. When the lines are below 20, this means the market is oversold and an upward trend might form.
Stochastics can be useful in working out when to issue sell or buy orders and when to lock in profits. You should never use just one indicator. It is better to combine several of them and adjust these to your own trading strategy.
About the Author:
Ian Armstrong is an avid Forex enthusiast.
Ian recommends Avi Frister's "Forex Trading Machine", which uses only price and time as trading indicators. Full details at Frister's FX Trading Machine
Tuesday, April 29, 2008
10 Easy Steps to a More Productive Trading Day
Author: Leroy Rushing
Being a successful market trader can encompass your entire life. The market bell may sound before your morning coffee is ready, and it runs through your lunchtime. When the day is over, you may be too exhausted to even heat up that gourmet dinner. By taking 10 easy steps, however, you can ensure that your mind, body, and portfolio are enjoying a more productive trading day.
1. Turn Off the TV - The TV may provide some financial information, but can be very distracting. Turning down the volume or putting it in an out of sight location will help you focus on day trading. Your trading style can easily be affected by the things you’re hearing without you even knowing.
2. Keep in Touch - Skill-building activities will help you stay in the state of mind you need to be profitable. An online home study course is a great tool to get away from the stresses of trading and to learn more about trading. Leveraging your down time into something productive will yield better results.
3. NetWorking - The secrets of profitable traders can only be learned by networking. Indeed, in the financial market, the phrase, “it isn’t what you can do but who you know” still reigns true. Professional traders usually know someone who trades and talks to them to bounce off trading ideas and strategies.
4. Take a Lunch - Don’t keep yourself tied down to your trade station. Resuming normal activities, such as taking a lunch then a brief break, will make life more normal. Day trading is stressful, and you need the time off to unwind.
5. Look for Quality Trades - Consistent profits don’t come from taking every single trade. You need to force yourself to make only quality trades to cut down on commissions and the stress that comes with many open positions.
6. Develop a Trading Plan - Develop a trading plan for certain markets. It is always wise to have your trading plan down on paper so that you instantly see it and act accordingly. If you have extra time, fine tune your strategy with a trading plan planner for certain market conditions . The time investment more than pays off in your portfolio returns.
7. Day Trading Is Not Investing - You’re not buying for the long haul so plan your investments around the current time. Avoid stressful situations by selling before the market close. Holding positions overnight is a quick way to wreck your trading capital.
8. Trade With the Market - Only take positions that go with the overall market. If the decliners are outpacing the advancers, it probably wouldn’t be a good time to go long, regardless of how great the trade looks.
9. Avoid the News - A complete trading plan should touch on topics such as news events and other large market movers. However, avoiding the daily news will keep random variables from hurting your capital and make you a more productive trader.
10. Take Days Off - If you need to, take a day off from trading to relax. Stressful traders are not productive traders.
Article Source: http://www.articlesbase.com/day-trading-articles/10-easy-steps-to-a-more-productive-trading-day-389418.html
About the Author:
Leroy Rushing is an active, professional day trader ; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide. Trading EveryDay also has many articles with unique perspectives on day trading .
Being a successful market trader can encompass your entire life. The market bell may sound before your morning coffee is ready, and it runs through your lunchtime. When the day is over, you may be too exhausted to even heat up that gourmet dinner. By taking 10 easy steps, however, you can ensure that your mind, body, and portfolio are enjoying a more productive trading day.
1. Turn Off the TV - The TV may provide some financial information, but can be very distracting. Turning down the volume or putting it in an out of sight location will help you focus on day trading. Your trading style can easily be affected by the things you’re hearing without you even knowing.
2. Keep in Touch - Skill-building activities will help you stay in the state of mind you need to be profitable. An online home study course is a great tool to get away from the stresses of trading and to learn more about trading. Leveraging your down time into something productive will yield better results.
3. NetWorking - The secrets of profitable traders can only be learned by networking. Indeed, in the financial market, the phrase, “it isn’t what you can do but who you know” still reigns true. Professional traders usually know someone who trades and talks to them to bounce off trading ideas and strategies.
4. Take a Lunch - Don’t keep yourself tied down to your trade station. Resuming normal activities, such as taking a lunch then a brief break, will make life more normal. Day trading is stressful, and you need the time off to unwind.
5. Look for Quality Trades - Consistent profits don’t come from taking every single trade. You need to force yourself to make only quality trades to cut down on commissions and the stress that comes with many open positions.
6. Develop a Trading Plan - Develop a trading plan for certain markets. It is always wise to have your trading plan down on paper so that you instantly see it and act accordingly. If you have extra time, fine tune your strategy with a trading plan planner for certain market conditions . The time investment more than pays off in your portfolio returns.
7. Day Trading Is Not Investing - You’re not buying for the long haul so plan your investments around the current time. Avoid stressful situations by selling before the market close. Holding positions overnight is a quick way to wreck your trading capital.
8. Trade With the Market - Only take positions that go with the overall market. If the decliners are outpacing the advancers, it probably wouldn’t be a good time to go long, regardless of how great the trade looks.
9. Avoid the News - A complete trading plan should touch on topics such as news events and other large market movers. However, avoiding the daily news will keep random variables from hurting your capital and make you a more productive trader.
10. Take Days Off - If you need to, take a day off from trading to relax. Stressful traders are not productive traders.
Article Source: http://www.articlesbase.com/day-trading-articles/10-easy-steps-to-a-more-productive-trading-day-389418.html
About the Author:
Leroy Rushing is an active, professional day trader ; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide. Trading EveryDay also has many articles with unique perspectives on day trading .
Cherry Picking Stocks and Stock Scanning
Author: Leroy Rushing
Modern examples of cherry picking are all over the street. Investors follow large institutions and investors like Warren Buffett, who is known for quality trades. Cherry picking is simply following the trades of a profitable trader or institution that has a long history of trading success. For the cherry picker, trading structure is based around the proven techniques and strategies of other investors. Cherry picking provides easy profits in both bear and bull markets. Professional traders are quick to follow the advice of other professional traders.
Following the Big Names
When firms like Berkshire Hathaway take positions, investors follow suit and invest in the same company with minimal research of their own. Rather than using their own investment techniques and strategies, they rely on the track records of other investors. When word hits that Warren Buffett made a sizeable investment in a company, various firms are quick to follow and rapidly push up prices. Day traders and swing traders also make large amounts of money by following the advice of TV personalities like Jim Cramer by entering a position based on his take, as other investors will likely follow suit.
Save Time on Researching
Cherry picking can be used to make quality trades without using technical analysis or studying the business. Cherry picking saves time for the swing trader who would rather rely on the history of others than use their own algorithms to define worthy investments. A cherry picking strategy is usually profitable for swing traders in both the short and long terms; short-term volume pushes the stock prices up, while history’s best investors rarely make terrible long-term trades.
Cherry picking can also be used much like momentum trading, or buying stocks that have already done very well. A quick look at a mutual fund prospectus will show the best performing stocks out of an already good list of investments. The cherry picker thinks that the stock is likely to do even better because the stock is doing the best out of stocks that were already heavily researched. Cherry picking is like picking a lawyer from Harvard, knowing they’re the best in the business without checking out the credentials of the particular individual.
Shop at the Bottom
In much the same way, cherry pickers also find stocks that have bottomed. Mutual funds only take quality trades that have been well researched and studied. If a stock has tanked since the fund made an investment, sentiment would be that the company is even more of a buy at its deflated price than it was when the fund invested. Swing traders and day traders find it easy to profit when the prices are already deflated and ready for a big run.
Article Source: http://www.articlesbase.com/day-trading-articles/cherry-picking-stocks-and-stock-scanning-394144.html
About the Author:
Leroy Rushing is an active, professional day trader ; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide. Trading EveryDay also has many articles with unique perspectives on day trading.
Modern examples of cherry picking are all over the street. Investors follow large institutions and investors like Warren Buffett, who is known for quality trades. Cherry picking is simply following the trades of a profitable trader or institution that has a long history of trading success. For the cherry picker, trading structure is based around the proven techniques and strategies of other investors. Cherry picking provides easy profits in both bear and bull markets. Professional traders are quick to follow the advice of other professional traders.
Following the Big Names
When firms like Berkshire Hathaway take positions, investors follow suit and invest in the same company with minimal research of their own. Rather than using their own investment techniques and strategies, they rely on the track records of other investors. When word hits that Warren Buffett made a sizeable investment in a company, various firms are quick to follow and rapidly push up prices. Day traders and swing traders also make large amounts of money by following the advice of TV personalities like Jim Cramer by entering a position based on his take, as other investors will likely follow suit.
Save Time on Researching
Cherry picking can be used to make quality trades without using technical analysis or studying the business. Cherry picking saves time for the swing trader who would rather rely on the history of others than use their own algorithms to define worthy investments. A cherry picking strategy is usually profitable for swing traders in both the short and long terms; short-term volume pushes the stock prices up, while history’s best investors rarely make terrible long-term trades.
Cherry picking can also be used much like momentum trading, or buying stocks that have already done very well. A quick look at a mutual fund prospectus will show the best performing stocks out of an already good list of investments. The cherry picker thinks that the stock is likely to do even better because the stock is doing the best out of stocks that were already heavily researched. Cherry picking is like picking a lawyer from Harvard, knowing they’re the best in the business without checking out the credentials of the particular individual.
Shop at the Bottom
In much the same way, cherry pickers also find stocks that have bottomed. Mutual funds only take quality trades that have been well researched and studied. If a stock has tanked since the fund made an investment, sentiment would be that the company is even more of a buy at its deflated price than it was when the fund invested. Swing traders and day traders find it easy to profit when the prices are already deflated and ready for a big run.
Article Source: http://www.articlesbase.com/day-trading-articles/cherry-picking-stocks-and-stock-scanning-394144.html
About the Author:
Leroy Rushing is an active, professional day trader ; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide. Trading EveryDay also has many articles with unique perspectives on day trading.
Finding Chart Patterns That Can Lead to Big Profits
Author: Leroy Rushing
Professional traders have their own set of patterns and indices they use to predict the markets. Profitable traders are aware enough to generate a profit in nearly every market. Sideways trends, uptrends, and even downtrends can all be profitable with the proper tools and investment strategy. Creative techniques will help you preserve trading capital while generating huge profits. To master day trading, you must first understand the basic chart patterns.
The Double Top and Bottom
The best and easiest chart pattern to recognize is the double top or double bottom. It is marked by two consecutive peaks or dips in price to about the same level. This chart pattern works because the first movement tests new boundaries, and then investors take profit and push the price down. Then investors re-enter and push the market again to test its new area, while the market again corrects – although this time, there is usually plenty of buying or selling interest that is removed by the large price movements, and the price either tops or bottoms. When the price moves to a position twice, it encounters plenty of orders that were left at the last peak. On a double top, seller sentiment is extremely high, and investors are looking to short the stock hard. Very rarely do people buy when they see a double top, further compounding the move.
Flagging Trendlines
Pennant flags are also a very identifiable charting pattern. A pennant flag is a sideways trend that forms where two trendlines meet. When two trendlines touch, buying and selling pressure battle each other out and usually end in a huge downtrend or uptrend immediately following the breakout. Professional traders have developed very popular strategies such as “straddling” a position, or placing a short order below the pennant and a long order above the pennant. When the breakout does happen, in either direction, a trader will automatically enter a position and profit from the breakout.
Head And Shoulders are Important
Head and shoulder patterns are also very popular with professional traders . A head and shoulder formation is created when the stock makes a three topped chart, with one high peak in the middle surrounded by two lower peaks on each side. These usually mark a downtrend at the top of a chart and an uptrend when found upside down at the bottom of a chart. The head and shoulders shows large buying strength that eventually tapers off as investors take a profit.
Reading charts are important in finding profitable opportunities in the market. Developing your ability to recognize patterns is key to growing a portfolio.
Article Source: http://www.articlesbase.com/day-trading-articles/finding-chart-patterns-that-can-lead-to-big-profits-394152.html
About the Author:
Leroy Rushing is an active, professional day trader ; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide. Trading EveryDay also has many articles with unique perspectives on day trading.
Professional traders have their own set of patterns and indices they use to predict the markets. Profitable traders are aware enough to generate a profit in nearly every market. Sideways trends, uptrends, and even downtrends can all be profitable with the proper tools and investment strategy. Creative techniques will help you preserve trading capital while generating huge profits. To master day trading, you must first understand the basic chart patterns.
The Double Top and Bottom
The best and easiest chart pattern to recognize is the double top or double bottom. It is marked by two consecutive peaks or dips in price to about the same level. This chart pattern works because the first movement tests new boundaries, and then investors take profit and push the price down. Then investors re-enter and push the market again to test its new area, while the market again corrects – although this time, there is usually plenty of buying or selling interest that is removed by the large price movements, and the price either tops or bottoms. When the price moves to a position twice, it encounters plenty of orders that were left at the last peak. On a double top, seller sentiment is extremely high, and investors are looking to short the stock hard. Very rarely do people buy when they see a double top, further compounding the move.
Flagging Trendlines
Pennant flags are also a very identifiable charting pattern. A pennant flag is a sideways trend that forms where two trendlines meet. When two trendlines touch, buying and selling pressure battle each other out and usually end in a huge downtrend or uptrend immediately following the breakout. Professional traders have developed very popular strategies such as “straddling” a position, or placing a short order below the pennant and a long order above the pennant. When the breakout does happen, in either direction, a trader will automatically enter a position and profit from the breakout.
Head And Shoulders are Important
Head and shoulder patterns are also very popular with professional traders . A head and shoulder formation is created when the stock makes a three topped chart, with one high peak in the middle surrounded by two lower peaks on each side. These usually mark a downtrend at the top of a chart and an uptrend when found upside down at the bottom of a chart. The head and shoulders shows large buying strength that eventually tapers off as investors take a profit.
Reading charts are important in finding profitable opportunities in the market. Developing your ability to recognize patterns is key to growing a portfolio.
Article Source: http://www.articlesbase.com/day-trading-articles/finding-chart-patterns-that-can-lead-to-big-profits-394152.html
About the Author:
Leroy Rushing is an active, professional day trader ; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide. Trading EveryDay also has many articles with unique perspectives on day trading.
Win With No Stop Currency Trading
Author: Robert
No-Stop, hedged, Forex Grid system trading (“the No Stop system”) is one of the most newest techniques in forex trading. I am going to describe the No Stop system as best I can in the limited space available. There is a series of 7 other articles describing the elements below in greater detail.
There are many hedged systems around and the No Stop system below is one that is being traded profitably.
The No Stop system is an investment technique which creates favourable dollar cost averaging on all transactions entered into. For this reason the technique is too much of a paradigm shift for most conventional traders who like charts, support and resistance and indicators.
It is strictly speaking, it is not a trading technique. It has however become very popular as a trading technique because of the short term gains that can be made.
The No Stop system trades without stops. No stop loss orders are used at all except for when a group of transactions have a positive result and we want to liquidate the entire group of transactions at a net gain. Because the No Stop system cashes in its transactions regularly it becomes a trend following No Stop system too. There is no need for charts when using this No Stop system as we use predetermined price levels to cash in transactions positively (The No Stop system loves price spikes).
Transactions can or should be slow at a rate of about 3 to 4 a week. As price levels are determined well in advance orders can be placed well in advance so the No Stop system takes very little supervision. The technique is highly systematic and can easy be converted into an automatic trading system or expert advisor very easily.
The No Stop system is always in a sell and a buy at the same time and therefore can cash in on any move the market makes. Being in a sell and a buy at the same time also created a hedge. Predetermined cash in levels create a grid of price levels there positive transactions will be cashed in continuously until the group of transactions are profitable.
In simple terms you will enter the market at a particular level with an active bay and a sell. You would have predetermined levels at which you would cash in positive transactions. For instance one could decide to cash in on every 100pip (grid gap) move made in the market. When the price moves 100 pips you would cash in your positive transaction and then enter into another buy and sell transaction at that point. This process will continue until the total for the group of transaction is positive and then you would liquidate. You would then start again – as simple as that. No need for charts. Patience is the biggest virtue required.
Money is made when the price revisits some of the cash in levels over and over and over again (which it does).
In the above example should the price return to the starting level (after moving 100 pips) the group of 4 transactions in total will be positive and you would then cash in the unwanted transactions, bank your profits and start again.
The big danger of this No Stop system is strong trends with no or very few retracements. You will lose money in trends. There are however specific techniques to manage and contain these losses.
The biggest one is to start with a big grid gap. What is a trend on a 5 minute chart could be a small spike on a daily or weekly chart. Grid gaps of between 150 pips and 300 pips have been found to work well.
One could also vary the grid sizes relative to the trend to reduce the number of unhedged transaction. For example have grid gaps of 100, 200, 300 etc.
The other way is to vary the number of lots used when entering into the buy and sell transactions at a particular cash in point to ensure balanced hedging.
Trends tend to scare people away from this technique but if one views this as an investment technique and not a trading technique the trends could have a reduced impact on the annual return on investment. The market only trends 20% of the time any way. Talking about return on investment some current trading groups are showing returns of between 200% p.a. and 1000% p.a. on current investment levels. There are many trading records are available to back this up. The longer you trade this No Stop system the lower your risk and the better your return. That said, you can lose more than just your boots (your whole trading account) if you treat this No Stop system with disrespect.
Success factors for this No Stop system are: - Selecting appropriate grid sizes, currency pairs, lot sizes, cash in times and an investment mentality. All very easy, if you have done it for a few years.
This No Stop system is not for everybody however, and is not the best Forex system since sliced bread, but is does very nicely for some traders, thank you very much. It is important to know about this system as using its principles could help your conventional trading. For freely available information on this No Stop system search the net for “no stop forex trading”
Article Source: http://www.articlesbase.com/finance-articles/win-with-no-stop-currency-trading-399602.html
About the Author:
Mary McArthur is a Trader associated with www.expert-4x.com She works with http://www.forextradersupportservices.com providing educational input. She is considered an expert of the hedged grid system.
No-Stop, hedged, Forex Grid system trading (“the No Stop system”) is one of the most newest techniques in forex trading. I am going to describe the No Stop system as best I can in the limited space available. There is a series of 7 other articles describing the elements below in greater detail.
There are many hedged systems around and the No Stop system below is one that is being traded profitably.
The No Stop system is an investment technique which creates favourable dollar cost averaging on all transactions entered into. For this reason the technique is too much of a paradigm shift for most conventional traders who like charts, support and resistance and indicators.
It is strictly speaking, it is not a trading technique. It has however become very popular as a trading technique because of the short term gains that can be made.
The No Stop system trades without stops. No stop loss orders are used at all except for when a group of transactions have a positive result and we want to liquidate the entire group of transactions at a net gain. Because the No Stop system cashes in its transactions regularly it becomes a trend following No Stop system too. There is no need for charts when using this No Stop system as we use predetermined price levels to cash in transactions positively (The No Stop system loves price spikes).
Transactions can or should be slow at a rate of about 3 to 4 a week. As price levels are determined well in advance orders can be placed well in advance so the No Stop system takes very little supervision. The technique is highly systematic and can easy be converted into an automatic trading system or expert advisor very easily.
The No Stop system is always in a sell and a buy at the same time and therefore can cash in on any move the market makes. Being in a sell and a buy at the same time also created a hedge. Predetermined cash in levels create a grid of price levels there positive transactions will be cashed in continuously until the group of transactions are profitable.
In simple terms you will enter the market at a particular level with an active bay and a sell. You would have predetermined levels at which you would cash in positive transactions. For instance one could decide to cash in on every 100pip (grid gap) move made in the market. When the price moves 100 pips you would cash in your positive transaction and then enter into another buy and sell transaction at that point. This process will continue until the total for the group of transaction is positive and then you would liquidate. You would then start again – as simple as that. No need for charts. Patience is the biggest virtue required.
Money is made when the price revisits some of the cash in levels over and over and over again (which it does).
In the above example should the price return to the starting level (after moving 100 pips) the group of 4 transactions in total will be positive and you would then cash in the unwanted transactions, bank your profits and start again.
The big danger of this No Stop system is strong trends with no or very few retracements. You will lose money in trends. There are however specific techniques to manage and contain these losses.
The biggest one is to start with a big grid gap. What is a trend on a 5 minute chart could be a small spike on a daily or weekly chart. Grid gaps of between 150 pips and 300 pips have been found to work well.
One could also vary the grid sizes relative to the trend to reduce the number of unhedged transaction. For example have grid gaps of 100, 200, 300 etc.
The other way is to vary the number of lots used when entering into the buy and sell transactions at a particular cash in point to ensure balanced hedging.
Trends tend to scare people away from this technique but if one views this as an investment technique and not a trading technique the trends could have a reduced impact on the annual return on investment. The market only trends 20% of the time any way. Talking about return on investment some current trading groups are showing returns of between 200% p.a. and 1000% p.a. on current investment levels. There are many trading records are available to back this up. The longer you trade this No Stop system the lower your risk and the better your return. That said, you can lose more than just your boots (your whole trading account) if you treat this No Stop system with disrespect.
Success factors for this No Stop system are: - Selecting appropriate grid sizes, currency pairs, lot sizes, cash in times and an investment mentality. All very easy, if you have done it for a few years.
This No Stop system is not for everybody however, and is not the best Forex system since sliced bread, but is does very nicely for some traders, thank you very much. It is important to know about this system as using its principles could help your conventional trading. For freely available information on this No Stop system search the net for “no stop forex trading”
Article Source: http://www.articlesbase.com/finance-articles/win-with-no-stop-currency-trading-399602.html
About the Author:
Mary McArthur is a Trader associated with www.expert-4x.com She works with http://www.forextradersupportservices.com providing educational input. She is considered an expert of the hedged grid system.
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