THE BEST FOREX ONLINE

2008-07-15T09:23:00.000-07:00

trading

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Each forex trader must have his own strategy, we can’t rely on others strategies and forex signal, we can build up more profitable technique.
For me forex trading is not easy and it needs a good focus , but we can make profit by doing simple techniques and follow it. Don’t use difficult economic indicators, indicators describe the market and not predict it.
I develop a strategy which is not rely on news release, we can do that by closing a trade before a news release or open it after a news release, and by this way you will not be stopped out because a report came worse than your expectation. The main thing in forex trading is the entry point, good entry point leads us to profit, bad entry point leads us to loose. Maybe you hear a lot of traders telling you do not trade against the trend, and that’s right but it is not enough, you must know where to enter a trend , time is the most important.Forex trading gives you many chances, you must change your way of thinking slightly and see trading from a diverse viewpoint and have our own forex signal.

2008-07-15T09:19:00.000-07:00

some principles

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Do you want to increase your profit by applying some of the more important forex currency trading rules? Do it consistently with a suitable amount of discipline. Here are some of my principles that can help you improve your chances of success, practice them in your trading on a regular basis. Set up and practice specific goals. In forex trading, the primary goal is clearly to make money. Have a specific idea of what you want to achieve in your trading and the exact time frame you want to achieve it, make your efforts more focused. Develop your discipline and personal forex currency trading system. In order for any business to succeed it must have measurable goals that are both rational and possible. The common part of forex traders who often find themselves on the losing end of a trade make the same common and frequent mistakes.

2008-07-15T08:54:00.000-07:00

my experience

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Are you sick and tired watching your investments drop but at the same time others make money?Maybe you have read thousands of forex trading e-book but it doesn`t work and your forex trading systems failed.
Have you bought forex trading systems or methods and your trading outcome still were not up to scratch.Why you experience with unproductive results? I am using well known indicators which are offered in most free or fee based forex charts. Keep on trying is the rule that must be followed to become an expert in anything.
A forex trading method with a high winning percentage is reward psychologically, keeps your confidence high and enjoy trading. A string of profits will build your confidence. If you look for a system with no losing trades, forget trading and find a different trade or hobby. Losses have to kept small and wins should be larger than losses. Soon you will know how to “read’ the market better, when to let your profits run, how to use higher time frames to measure how price will react on lower time frame charts and how strategies can be implemented without buying any costly software or subscribing to expensive data services.

2008-04-19T21:31:00.000-07:00

Taking a Look at Forex Technical Analysis Theory

Making use of charts to understand the flow of the currency market is an essential tool for the Forex trader. The use of such charts can help determine the flow of the market and guide the Forex investor into make better investment decisions in the future. The theory that involves technical analysis of the Forex market includes five categories that one should be familiar with.

These five categories would include the indicators, number theory, waves, gaps, and trends.

Relative Strength Index or RSI and Stochastic oscillator are examples of Indicators. RSI would measure the ratio of up and down moves and eventually, would normalize the calculation in such a way wherein the index is shown in ranges of zero to a hundred. The Stochastic oscillator, on the other hand, is often used to convey conditions of over buying or over selling on a zero to one hundred percent scale. This indicator bases itself on observing strong up trends wherein period closing price will end up gathering towards the higher level of a period's range. The divergence that occurs in between stochastic lines and price activity of an underlying instrument can relay powerful signals for trading.

The second category or number theory would include Fibonacci numbers and Gann numbers. The Fibonacci numbers, would entail that the sequence is 1,1,2,3,5,8,13,21,34 and so on. Such a number sequence is made by the addition of the first 2 numbers wherein the third number is the outcome. Gann numbers on the other hand, draws its roots from the use of methods developed for instruments of trade that bases themselves on time or price equivalents. Angles in charts were used in order to determine areas of support and resistance, predicting future trends and changes.

Thirdly, there are the Waves which is based on the Elliot wave theory that studies wave patterns that are repetitive in nature and involves also the Fibonacci sequence of numbers.

The fourth category involves the Gaps. These are spaces that are left on a bar chart wherein there has been no trading to have taken place. There are many forms of gaps. An up gap, for instance, is created when the smallest price on a day's trading has become high in comparison to the highest high price of the day before.

Lastly, we have the Trends! This would refer to a price's direction or to the direction of various prices in the market. The rising peaks would pertain to an up-trend, while the falling ones, would pertain to downtrends.

The technical analyst bears no concern over the whole picture of the market. Nor is he concerned with any of the factors which would affect that given market. His only main concern is on the market's instruments and their perspective activities.

2008-04-08T23:32:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
1,9658. GBP USD is in a consolidation after the last bearish movement. The volatility decreases. Bollinger bands are tightened. ForexTrend 1H, 4H (Mataf Trend Indicator) is in a bearish configuration. 1H, 4H ForexSto (Modified Stochastic) indicate a bearish pressure on GBP USD. The downtrend should continue to gather momentum. The target is expected at 1,9400 (260 pips).

Resistances
1,9710 - 1,9750
Supports
1,9650 - 1,9575
Long term chart
GBP/USD - British Pound Dollar

updated 09 avr 2008 06:00 GMT

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2008-04-08T23:31:00.000-07:00

USD/JPY - Dollar Yen
Short term (Intraday)
102,33. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. ForexTrend 4H (Mataf Trend Indicator) is in a bullish configuration. The price should continue to move in 101,70 / 103,00 range. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
102,90 - 103,10
Supports
102,20 - 101,70
Long term chart
USD/JPY - Dollar Yen

updated 09 avr 2008 05:52 GMT

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2008-04-08T23:30:00.001-07:00

USD/CHF - Dollar Swiss Franc
Short term (Intraday)
1,0138. USD CHF is in a range between 1,0070 and 1,0165. USD CHF moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility decreases. Oscillators are neutral. The price should continue to move in 1,0070 / 1,0165 range. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
1,0165 - 1,0220
Supports
1,0120 - 1,0070
Long term chart
USD/CHF - Dollar Swiss Franc

updated 09 avr 2008 05:55 GMT

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2008-04-08T23:28:00.000-07:00

EUR/USD - Euro Dollar
Short term (Intraday)
1,5703. EUR USD moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility decreases. Bollinger bands are tightened. ForexTrend daily (Mataf Trend Indicator) is in a bullish configuration. The price should find a support above 1,5700 / 1,5680. If the support is broken then the target will be 1,5650. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
1,5730 - 1,5770
Supports
1,5680 - 1,5650
Long term chart
EUR/USD - Euro Dollar

updated 09 avr 2008 06:03

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2008-04-03T22:38:00.000-07:00

The dollar failed to hold on to gains versus the European currencies and closed flat versus the euro, franc, plus the yen, and lower against the pound. The early strength of the US currency followed signs that the credit crisis is finally starting to impact the Eurozone. Regional retail sales fell and a German bank needs $9.4 billion to cover mounting losses. But the sliding US services ISM and the upcoming release of the non-farm payrolls weakened the dollar later in the day. The dollar downtrend remains in place.

Euro/dollar

Euro/dollar reversed early losses again to close flat on Thursday. My model remains short, but I prefer to be square. I expect a move higher.

Initial resistance now comes at 1.5745. Then, there is resistance at 1.5770. Distant resistance now comes at 1.5904 from a pivot high.

Immediate support is now seen at 1.5605. This is followed by 1.5565 and 1.5535. Below 1.5480, there is distant support is now seen at 1.5350.

Oscillators are mixed.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Dollar/yen

Dollar/yen consolidated on Thursday after surging for two days. My model remains long. Once again, hold long positions VERY carefully because the upside seems to be in its final stages. The key level is 102.30 from another 50-point pivot, which targets 101.80 and 102.80.

Immediate resistance is at 102.80. Above 103.40 there is resistance at 104.10.

Initial support is seen at 101.80. The next level is 101.15. This is followed by 100.25 from a 50-point Gann pivot, which targets 99.75 and 100.75. 101.25.

Oscillators are rising.

NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish

Sterling/dollar

Sterling/dollar reversed early losses on Thursday to rally after forming a bullish reversal a day earlier. Model went long. I expect a rally.

Initial resistance now comes at 1.9995. A break above 2.0060 would signal a further upmove to the peak at 2.0190.

Immediate support is seen at 1.9875. The next level is 1.9805. Below 1.9730, there is distant support at 1.9620.

Oscillators are mixed.

NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed with upside bias
LONG-TERM: Mixed

Dollar/Swiss franc

Dollar/Swiss reversed gains to close flat on Thursday. The medium-term outlook remains bearish.

Immediate support is still seen at 1.0060. This is followed by 0.9950. Below 0.9880, distant support is now pegged at 0.9775.

Initial resistance is still seen at 1.0155. The next level is 1.0200. Further resistance is at 1.0250. Distant resistance is at 1.0390

Oscillators are rising.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish

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2008-04-03T22:31:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
1,9950. GBP USD is in a consolidation after the last bullish movement. The volatility decreases. Bollinger bands are tightened. 4H ForexSto (Modified Stochastic) indicate a bullish pressure on GBP USD. The price should find a resistance below 2,0000. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
1,9970 - 2,0000
Supports
1,9920 - 1,9900
Long term chart
GBP/USD - British Pound Dollar

updated 04 avr 2008 06:13 GMT
Print

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2008-04-03T22:29:00.000-07:00

USD/JPY - Dollar Yen
Short term (Intraday)
102,58. USD JPY is in an uptrend supported by 1H exponential moving averages. USD JPY is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H (Mataf Trend Indicator) is in a bullish configuration. 1H ForexSto (Modified Stochastic) indicate a bullish pressure on USD JPY. The price should find a resistance below 103,00. The consolidation should continue. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
102,70 - 103,00
Supports
102,15 - 101,50
Long term chart
USD/JPY - Dollar Yen

updated 04 avr 2008 06:06 GMT

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2008-04-03T22:27:00.000-07:00

USD/CHF - Dollar Swiss Franc
Short term (Intraday)
1,0116. USD CHF is in a consolidation after the last bullish movement. USD CHF moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility decreases. Bollinger bands are tightened. ForexTrend 1H (Mataf Trend Indicator) is in a bullish configuration. ForexTrend daily (Mataf Trend Indicator) is in a bearish configuration. The price should continue to move in Bollinger bands. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
1,0135 - 1,0200
Supports
1,0075 - 1,0000
Long term chart
USD/CHF - Dollar Swiss Franc

updated 04 avr 2008 06:08 GMT

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2008-04-03T22:23:00.000-07:00

EUR/USD - Euro Dollar
Short term (Intraday)
1,5676. EUR USD is in a range between 1,5520 and 1,5700. EUR USD moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is high. ForexTrend daily (Mataf Trend Indicator) is in a bullish configuration. The price should continue to move in Bollinger bands. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
1,5700 - 1,5730
Supports
1,5620 - 1,5520
Long term chart
EUR/USD - Euro Dollar

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2008-04-02T06:23:00.001-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
1,9790. GBP USD is in an downtrend directed by 1H exponential moving averages. GBP USD is in a consolidation after the last bearish movement. The volatility is low. Bollinger bands are flat. Oscillators are neutral. The consolidation should continue. The price should find a support above 1,9740. If the support is broken then the target will be 1,9400.

Resistances
1,9840 - 1,9890
Supports
1,9745 - 1,9720
Long term chart
GBP/USD - British Pound Dollar

updated 02 avr 2008 14:00 GMT

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2008-04-02T06:22:00.001-07:00

USD/JPY - Dollar Yen
Short term (Intraday)
102,43. USD JPY broke 100,20 resistance. USD JPY is in an uptrend supported by 1H exponential moving averages. The volatility rises. Bollinger bands are deviated. ForexTrend 1H (Mataf Trend Indicator) is in a bullish configuration. 1H, 4H ForexSto (Modified Stochastic) indicate a bullish pressure on USD JPY. The uptrend should continue on 103,50 (110 pips) resistance.

Resistances
102,60 - 103,50
Supports
101,70 - 101,50
Long term chart
USD/JPY - Dollar Yen

updated 02 avr 2008 13:53 GMT

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2008-04-02T06:21:00.001-07:00

USD/CHF - Dollar Swiss Franc
Short term (Intraday)
1,0159. USD CHF broke 1,0000 resistance. USD CHF is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. 4H ForexSto (Modified Stochastic) indicate a bullish pressure on USD CHF. The price should find a resistance below 1,0165. If the resistance is broken then the target will be 1,0250 (90 pips).

Resistances
1,0165 - 1,0250
Supports
1,0090 - 1,0000
Long term chart
USD/CHF - Dollar Swiss Franc

updated 02 avr 2008 13:56 GMT

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2008-04-02T06:18:00.000-07:00

EUR/USD - Euro Dollar
Short term (Intraday)
1,5591. EUR USD broke 1,5750 support. EUR USD is in a consolidation after the last bearish movement. EUR USD moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. Oscillators are neutral. The price should continue to move in Bollinger bands. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
1,5670 - 1,5750
Supports
1,5580 - 1,5525
Long term chart
EUR/USD - Euro Dollar

updated 02 avr 2008 14:02 GMT

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2008-03-31T23:18:00.000-07:00

Asian Morning Update 1st April 2008

Dollar fails to breach old lows…

European releases overnight:

March Forecast Actual
Euro-zone CPI (Est) (YoY) +3.3% +3.5%
Italian CPI (P) (MoM) +0.3% +0.5%
Italian CPI (P) (YoY) +3.1% +3.3%
Euro-zone Business Climate Indicator 0.70 0.80
Euro-zone Consumer Confidence -12.0 -12.0
Euro-zone Economic Confidence 100.0 99.6
Euro-zone Industrial Confidence 1.0 0.0
Euro-zone Services Confidence 10.0 9.0

Mixed numbers from Europe with inflation pushing above forecasts and in general confidence numbers ticking lower. That consumer confidence remained stable is a surprise given recent softer indications from the retail PMI. It will be interesting to see how the rest of the PMI releases fair over the course of this week and could set a marker for future numbers.

Even ECB board members are not bouncing with confidence. If they were then interest rates would be higher. Yesterday Liikanen confirmed that by highlighting the continuing risk of a global slowdown. It is clear too that he doesn’t rule out worsening conditions in Europe when commenting “experience and history shows that price stickiness in Europe is higher than for instance in America, so changes take place at a slower pace.”

Even Bafin, the German banking supervisor, is estimating a minimum of EUR 43bn in writedowns and possibly as high as EUR70bn. There are also risks for LBO’s which have been facing problems in meeting debt repayments so the seeds are there to be grown.

And while both ECB and BOE make warnings on second round inflation frankly control is mostly out of their hands as oil prices remain at extremely elevated levels that are causing consumers to hold back on spending as they see their wealth at risk.

These are testing times indeed.

States releases overnight:

March Forecast Actual
Chicago PMI 46.5 48.2
N.Y. Current Business Conditions 43.4 (prior) 46.3

There was limited data from the States with just the Chicago PMI and N.Y. business conditions which both saw healthy upticks. Certainly it is nowhere close to indicating any strong recovery but they provide time for the market to consolidate and for the fiscal stimulation to begin taking effect next month.

So while the doomsayers were out in force crying for a weaker Dollar as it spiked towards the 1.5901 peak there were no signs of follow-through and conversely a sharp pullback. While it shows the market’s preference to sell Dollars it also suggests that momentum conditions aren’t quite right yet.

Indeed, there still remain several possibilities at this stage of the game and one of those could be a return to the 1.5340 low…

However, as we start the day in Asia focus will be on the Japanese Tankan report and the growing pessimism that has been developing as the penny has clicked that Japan is stuck between a rock and a hard place. The domestic economy has never recovered from the 1980’s bubble and the export economy is facing a bleak outlook as the globalization bubble also threatens to dump the country back in not only recession but the possibility of stagflation.

More later once the daily analysis has been done…

There following releases are due from Asia due today:

Australia
March AiG Performance of Manufacturing Index
The RBA are due to announce their rate decision

Japan
Q1 Tankan Large Manufacturer’s Index 13.0
Q1 Tankan Large Manufacturer’s Outlook 9.0
Q1 Tankan Non-Manufacturing 12.0
Q1 Tankan Non-Manufacturing Outlook 10.0

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2008-03-31T23:14:00.001-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
1,9837. GBP USD is in a consolidation after the last bearish movement. The volatility is low. Bollinger bands are parallel and form the trend. ForexTrend 1H (Mataf Trend Indicator) is in a bearish configuration. The downtrend should continue on 1,9720 (110 pips) support.

Resistances
1,9875 - 1,9935
Supports
1,9810 - 1,9770
Long term chart
GBP/USD - British Pound Dollar

updated 01 avr 2008 05:57 GMT

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2008-03-31T23:12:00.000-07:00

USD/JPY - Dollar Yen
Short term (Intraday)
99,94. USD JPY is in a range between 99,10 and 100,20. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily (Mataf Trend Indicator) is in a bearish configuration. The price should continue to move in Bollinger bands. We won't take a position. The risk/reward ratio is too high to take a position..

Resistances
100,20 - 100,70
Supports
99,65 - 99,10
Long term chart
USD/JPY - Dollar Yen

updated 01 avr 2008 05:51 GMT

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2008-03-31T23:11:00.000-07:00

USD/CHF - Dollar Swiss Franc
Short term (Intraday)
0,9942. There is an horizontal range between 0,9900 and 0,9960. Support and resistance are given by Bollinger bands. USD CHF moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily (Mataf Trend Indicator) is in a bearish configuration. The price should continue to move in Bollinger bands. If the support is broken then the target will be 0,9800.

Resistances
0,9965 - 0,9990
Supports
0,9930 - 0,9890
Long term chart
USD/CHF - Dollar Swiss Franc

updated 01 avr 2008 05:53 GMT

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2008-03-31T23:05:00.000-07:00

EUR/USD - Euro Dollar
Short term (Intraday)
1,5775. EUR USD is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. ForexTrend 4H, daily (Mataf Trend Indicator) is in a bullish configuration. The consolidation should continue. The price should continue to move in 1,5725 / 1,5860 range. If the resistance is broken then the target will be 1,5950.

Resistances
1,5805 - 1,5850
Supports
1,5725 - 1,5700
Long term chart
EUR/USD - Euro Dollar

updated 01 avr 2008 05:59 GMT

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2008-03-31T09:02:00.000-07:00

GBP/USD - British Pound Dollar
Short term (Intraday)
1,9876. GBP USD is in a consolidation after the last bearish movement. The volatility is high. Bollinger bands are parallel and form the trend. ForexTrend 1H (Mataf Trend Indicator) is in a bearish configuration. 4H ForexSto (Modified Stochastic) indicate a bearish pressure on GBP USD. The downtrend should continue on 1,9800 support.

Resistances
1,9900 - 1,9975
Supports
1,9800 - 1,9765
Long term chart
GBP/USD - British Pound Dollar

updated 31 mars 2008 14:14 GMT

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2008-03-31T08:59:00.000-07:00

USD/JPY - Dollar Yen
Short term (Intraday)
99,53. There is an horizontal range between 99,00 and 100,00. Support and resistance are given by Bollinger bands. USD JPY moves without trend and swings around exponential moving averages (EMA 50 and 100). Bollinger bands are flat. ForexTrend daily (Mataf Trend Indicator) is in a bearish configuration. The price should continue to move in Bollinger bands. If the support is broken then the target will be 97,00.

Resistances
100,00 - 100,90
Supports
99,10 - 98,70
Long term chart
USD/JPY - Dollar Yen

updated 31 mars 2008 14:08 GMT

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2008-03-31T08:57:00.000-07:00

SD/CHF - Dollar Swiss Franc
Short term (Intraday)
0,9938. USD CHF moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily (Mataf Trend Indicator) is in a bearish configuration. The price should find a resistance below 1,0000. The downtrend should resume.
=> We could take a short position at 0,9940. We will put the stop loss above 0,9980 (-40 pips). The targets are 0,9800 (+140 pips) 0,9700 (+240 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 2.

Resistances
0,9960 - 0,9990
Supports
0,9920 - 0,9870
Long term chart
USD/CHF - Dollar Swiss Franc

updated 31 mars 2008 14:10 GMT

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2008-03-31T08:51:00.000-07:00

UR/USD - Euro Dollar
Short term (Intraday)
1,5808. EUR USD is in an uptrend supported by 1H exponential moving averages. EUR USD is in a consolidation after the last bullish movement. The volatility is low. Bollinger bands are flat. ForexTrend 1H, 4H, daily (Mataf Trend Indicator) is in a bullish configuration. The price should find a support above 1,5790. The uptrend should continue to gather momentum.
=> We could take a long position at 1,5800. We will put the stop loss below 1,5750 (-50 pips). The targets are 1,5900 (+100 pisp) 1,6000 (+200 pips). Each trade is dangerous, take care and put your stop loss. Trade configuration (1 Speculative -> 4 Trend following): 3.

Resistances
1,5820 - 1,5860
Supports
1,5790 - 1,5750
Long term chart
EUR/USD - Euro Dollar

updated 31 mars 2008 14:16 GMT

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2007-11-06T19:41:00.000-08:00

By: James Woolley
Economic data releases occur almost every day and can have a dramatic effect on the forex markets, and indeed all major markets. They can cause wild swings and increased volatility which is great for traders, but can you successfully profit from them as a forex trader?Before I address that question, let me start off by talking about data releases in more detail. As a trader the first thing you should do every day is

consult an economic calendar to see what releases are scheduled for the forthcoming day. This will allow you to determine when you should be out of a trade if you don't want to trade through them, or when to turn your computer on and be ready to trade if you do wish to trade them.The best economic calendar in my opinion is at Forex Factory as this tells you not only what releases are scheduled for the day, but also the predicted and actual figures for each release, plus the importance of each one and the effect that they may have on specific currency pairs.Different data releases affect currencies in different ways. For example, interest rate decisions and non-farm payrolls have a major impact on dollar currencies whereas other less significant data releases will hardly have an effect at all and will remain little changed. So it's best to arm yourself with all this information and be fully prepared for any scheduled releases, but can you profit from them?Well in my opinion I don't think you can consistently make profits trading the news as soon as it's released simply because it's extremely difficult to predict how the market will react to any given news.For example, sometimes you will get seemingly bullish figures and expect the currency to go up, but it will do the complete opposite. Other times it will go up initially and then reverse as analysts and traders digest the news.It really is an extremely difficult way to trade the markets, particularly for the individual trader working alone. Trying to second guess the market is a very dangerous game.In my opinion there are far easier ways to trade the forex markets using solid technical analysis methods. You don't need to trade during those times when market-moving figures are announced because all they will do is distort any technical analysis and make it very difficult to enter a trade with confidence.Furthermore I always believe it's best to exit trades in advance of economic data releases simply because prices can move very fast and your stop losses may not get filled at the price you requested. I'm sure there are people who can make profits from news releases, but in my experience it's extremely difficult and akin to gambling in some instances.

2007-11-02T09:01:00.000-07:00

By: articles_s2p@yahoo.com
This article is about money management and trading psychology. This is the lesson that you never get with 99% of other Forex systems

that you have come across. I find it interesting that most of the systems out there don't include this because if they actually were successful traders, they would know that this was the key to success and to leave it out makes an incomplete system that won't work!! This tells me that the people that wrote them or are selling them aren't traders at all. They are just in the business of selling HOPE! Well, if you haven't noticed yet, I am a trader, and I am different than the others. Don't get me wrong, there are honest trainers out there, I learned from one and I am eternally grateful to him. So let's get on with this. First of all, this is my own interpretation of several sources, and the practices that have worked for me. Please read EVERYTHING you can find on trading psychology, and money management. There are a lot of slightly different views but overall, they are very similar and the main important points are all pretty much the same. There are two main issues that cause 99% of the problems. Can you guess what they are? If you answered FEAR and GREED, you are correct. These two emotions are probably responsible for 99% of the worlds problems as well but that is beyond the scope of this course À . So, now that we know what the big obstacles are, let's try and figure out how to overcome them. In the course of my lessons, I have listed a few but I will put them all together here in one place so that it is easier to follow, and perhaps make it easier for you to develop your own system to help you trade better. We can't eliminate fear and greed. They will still be there in your heart and mind, but we can make some rules so that they don't interfere with your trading success. We can come up with systems and procedures to follow, since we KNOW ahead of time that fear and greed are major problems. I'm sure you have heard the statistic that 95% of all speculative leveraged traders FAIL. This is absolutely true. Here is another statistic that I believe... 100% of traders that don't know how to overcome fear and greed will FAIL. So does that mean that if I can teach you how to overcome these problems that your chance of success is 100%? Of course not. But I can tell you that you cannot be successful if you don't protect yourself from yourself. In lessons 1-3 I have outlined a trading system. The first thing you must do, whether you follow my system, another system, or your own system is to follow the rules of the system WITHOUT FAIL. If your system calls for a certain entry point, do not enter until there is a signal to enter. Systems are designed for a reason. That is why it is called a system. What do we learn from this? Patience. Perhaps the stupidest thing you can do is enter a trade on a hunch. This brings us to our first FACT: The odds are in your favor before you enter a trade. This is true for most trading systems. Void of fear and greed, if you follow each system exactly, you will profit. Some systems may offer better profits than others, but overall you should be able to profit with any system, IF you have no fear and no greed. This brings us to THE BIG SECRET. Other than omitting trading psychology, other systems also don't tell you that you are playing a game of odds. Let's say for example that we are playing "coin toss." Theoretically, for 100 flips of the coin, 50 will come up heads, and 50 will come up tails. Of course, the first 100 may be 55/45, but the more you play, the closer to 50/50 the numbers will get. Our system for "coin toss" is as follows: We play for 20 hours, and flip the coin exactly 5 times each hour, and for every heads that comes up, we get paid $2, and for every tails that comes up we pay $1. This should be a profitable system. After our game we see that heads came up 50 times and tails came up 50 times. (Stay with me here). So at the end of 100 tosses, we have paid $50 and received $100. A profit of $50. So let's say that during our second game of coin toss, we decide that we are going to let the flipper(hint: the market is the flipper) keep flipping the coin for an hour while we take lunch but we are not going to pay or be paid for those flips. During our lunch hour, heads comes up 5 times in a row (which is theoretically possible, and not that unlikely). And now we are back from lunch, and we are down $10 for the hour. Now, theoretically the odds of 5 tails in a row coming up after 5 heads in a row are pretty good because for every ten tosses, you should have about 5 heads and five tails. So now we get 5 tails in a row and now we are down another $5, for a total of $15. So not counting the 5 tosses during lunch, this leaves 90 tosses that we still have to account for and let's say that they were 45 heads and 45 tails. Our profit for these tosses is $45 (45x2 minus 45x1), now if we take away the $15 for the tosses we didn't take, and that string of losers, we are left with a profit if $30. So lunch and 5 lousy spins cost us 40% of our profits. Now this is theory but it absolutely applies to this market. If you are picky about what trades you want to take and what trades you don't want to take, you are MESSING WITH THE ODDS. My point for this whole big story about "coin toss" is this: If the conditions are met, TAKE THE TRADE without hesitation. The odds are in your favor, but only if you take ALL of the trades that meet the conditions. When I say ALL trades I know the market is open 24 hours a day and you can't possibly take every trade. You need to pick a time frame and stick to that same time frame everyday and take ALL trades during that time frame. I can tell you that in the month before I realized this (my first month of trading real money actually), my total profit was 92 pips. I had an idea of what I was doing wrong so I was keeping track of the trades that I didn't take along with the ones that I did. I included entry point, day, time, and whether the profit target was hit or if it was stopped out. Don't get me wrong, I was extremely happy to be in profit after trading for only one month with real money. But then I went back and looked at the numbers for "what could have been." Guess what? Had I taken every trade that met my conditions, my profit for the month would have been 355 pips! I was not happy. But soon I realized that I had messed with the odds. After realizing what I had done wrong (or not done right in this case) I began to have more confidence in my systems. The very next month my total profit was 515 pips, or a 560% improvement just for taking all of the trades that met the conditions. I think that is enough said about that. Sorry to stay with the coin flip game here but it actually works very well in teaching these principles. This brings us to:FACT #2. You do not need to know what is going to happen to make money. If we know that we are going to make $2 fifty times and pay $1 fifty times as long as we flip the coin, are we going to play? Of course! Well, all trading systems have similar odds. From my testing, I know that this system on average will produce 9 wins of 20 pips for every 1 loss of 40 pips (that number may vary but that is the maximum loss I ever take). So we know ahead of time that 9 wins at 20 pips is 180 pips, and minus the loss of 40 pips, leaves us with 140 pips profit. Now keep in mind that you may be 8 and 2 this week and 10 and 0 next week. We never know when a loss is going to come. We may even lose every trade for a week, but not lose a trade for the next 9 weeks. Believe me it happens. You do not need to know exactly what is going to happen, you just need to take every trade that meets the conditions and then count your profits at the end of the month/week/year etc.This section deals with money management as well as psychology. Back to coin toss for a minute. We know that each win brings us $2. And we know that for each win in this trading system we get 20 pips. We know that each tail that comes up costs us $1. And in our system we know that each loss is 40 pips. If we know what our loss is going to be ahead of time, we know what it is going to cost us to find out "what is going to happen." From this we can decide how much we want to risk based on our account size. FACT 3: You know how much it will cost to find out. I have decided not to ever risk more than 5% of my account on any one trade. So knowing that, I can figure out how many lots to trade ahead of time based on my account size. It may cost $250 in margin for a 1 lot position but this is not what we are risking, we are actually risking ten dollars times the number of pips in our stop. If our stop is 40 pips, we are risking $400. Now we know that we better have at least $8000 in our account to take a position of this size. If this trade turns out to be a loser, and our balance falls to $7600, we know that we can't afford to take that trade again because a loss of $400 is more than 5% of our balance. We would need to adjust our number of lots down accordingly to keep our risk.
Author BioBen Rose