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More Traders Fall for This One Than Any Other - (By : KELLY PRICE )

Forex Trading Myths - More Traders Fall for This One Than Any Other


It is incredible that the forex trading myth enclosed is believed by the majority of traders who start trading forex. If you believe the enclosed myth, you are 100% destined to lose all your money. So what is it?

The myth is that a track record designed and tested in hindsight will make real profits. Each year traders buy forex trading systems and courses, with great track records on paper and believe that they will pile up huge gains with them.
In fact many traders don’t even realize the track record is not real!

They simply don’t read the disclaimer below which you will find on 99% of supposedly profitable track records on the net - read it carefully:

“CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

Having read the above would you now trust a system which presented a track record with the above on it?
Think about it.

The track record is done in hindsight, knowing the closing prices and making money knowing yesterday’s closing price is easy, a child could do it - however forex trading is far harder.
When it comes to forex trading, people simply let their greed get the better of them and think they have an instant road to riches - but the simulated track record doesn’t help in real time and the market teaches them a lesson.

The problem is most forex trading systems are sold by marketing companies NOT traders and these marketing companies simply rely on great copy to sell their course or trading system. You wouldn’t take driving lessons from a person who hasn’t passed their test so make sure you don’t buy a system that has not traded - its common sense really!

In forex trading you can make big profits but like in all aspects of life you need to make money on your own and no one is going to give you success so easily. So get back to basics, do your homework and learn currency trading the correct way and you will soon be making big profits. There are no short cuts to success, so never believe the above forex trading myth instead, go and get some proper forex education and enjoy currency trading success in real time.

 

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Forex Traders - Your Psychological Makeup

Forex Traders - Your Psychological Makeup


Your individual psychological makeup will make the single biggest impact on your trading results. It’s not enough to understand the market; you’ll also need to understand yourself as a trader.
Aggressive Or Non-Aggressive?

Take some time to figure out whether you are an aggressive or non-aggressive trader. If you are a naturally non-aggressive trader, an aggressive trading system will never feel right to you and will most likely cause you lots of stress and frustration. As you can see, choosing the right system according to your psychological makeup is crucial for increasing your trading productivity.

There are many ways to trade the market. Be patient and choose the right approach for you.

How Much Technical Information?

Another aspect of your psychological makeup is the amount of technical information that you’re comfortable with handling. The ability to stick to a trading system may be lost if you feel overwhelmed by too much technical indicators and information. You’ll thus need to determine exactly how much or little market or technical information is enough for your own comfort.

To do this, ask yourself what benefit you’ll get from an additional piece of technical information. Will this information help you to better time your trades or improve your trade winning probabilities? If not, then don’t waste your time. Don’t let superficial information clutter your thoughts and distract you from the important trading decisions that you’ll have to make.
Keep your information tools clean, clear and concise.

Environment

This is one aspect which many retail traders ignore. You’ll need to determine just how much or little environmental stimuli is need to maintain your top mental trading performance. Some traders like having sights and sounds around them while others prefer quieter, tranquil surroundings. Having the right environmental surroundings can substantially help improve your mental alertness and well-being when trading.

 

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Technical Analysis, Forecast a Market

The forex technical analysis is concerned with what has actually happened in the forex market, rather than what should happen. A technical analyst will study the price and volume movements and from that data create charts (derived from the actions of the market players) to use as his primary tool. The technical analyst is not much concerned with any of the “bigger picture” factors affecting the market, as is the fundamental analyst, but concentrates on the activity of that instrument’s market.

Technical analysis is based on three underlying principles:

1. Market action discounts everything
This means that the actual price is a reflection of everything that is known to the market that could affect it, for example, supply and demand, political factors and market sentiment. The pure technical analyst is only concerned with price movements, not with the reasons for any changes.

2. Prices move in trends
Technical analysis is used to identify patterns of market behaviour which have long been recognised as significant. For many given patterns there is a high probability that they will produce the expected results. Also there are recognised patterns which repeat themselves on a consistent basis.

3. History repeats itself
Chart patterns have been recognised and categorised for over 100 years and the manner in which many patterns are repeated leads to the conclusion that human psychology changes little with time.

List of categories of the technical analysis theory:
* Indicators (Oscillators, eg: Relative Strength Index RSI)
* Number theory (Fibonacci numbers, Gann numbers)
* Waves (Elliott wave theory)
* Gaps (High-Low, Open-Closing)
* Trends (Following Moving Average)
* Chart formations (Triangles, Head & Shoulders, Channels)

 

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Fundamental Analysis Which Drive a Trend

The forex fundamental analyst identifies and measures factors that determine the intrinsic value of a financial instrument, such as the general economic and political environment, and including any that affect supply and demand for the underlying product or service.

If there is a decrease in supply but the level of demand remains the same, then there will be an increase in market prices. An increase in supply produces the opposite effect.

For example, an analyst for a given currency studies the supply and demand for the country’s currency, products or services (Merchandise Trade); its management quality and government policies; its historic and forecasted performance; its future plans and the most important for the shorter term, all the economic indicators.

From this data, the analyst constructs a model to determine the current and forecasted value of a currency against an other. The basic idea is that unmatched increases in supply tend to depress the currency value, while unmatched increases in demand tend to increase the currency value. Once the analyst estimates intrinsic value, he compares it to the current exchange rate and decides whether the currency ought to rise or fall.

One difficulty with fundamental analysis is accurately measuring the relationships among the variables. Necessarily, the analyst must make estimates based on experience. In addition, the forex markets tend to anticipate events and discount them in the currency value in advance.

Finally, serving as both a disadvantage and even as an advantage (depending upon the timing), the markets often take time to recognise that exchange rates are out of line with value.

 

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What You Didn’t Know About The Psychology Of Forex Market Trading (by: Joseph Plazo)

What You Didn’t Know About The Psychology Of Forex Market Trading – And How It Might Bankrupt You


When it comes to trading on the Forex market, winning is a matter of the mind rather than mind over matter. Any trader who’s been in the game for any length of time will tell you that psychology has a lot to do with both your own performance on the trading floor and with the way that the market is moving. Playing a winning hand depends on knowing your own mind – and understanding the way that psychology moves the market.

Studying the psychology of the market is nothing new. It doesn’t take a genius to understand that any arena that rides and falls on decisions made by people is going to be heavily influenced by the minds of people. Few people take into account all the various levels of mind games that motivate the market, though. If you keep your eye on the way that psychology influences others – including the mass psychology of the people that use the currency on a daily basis – but neglect to know what moves you, you’re going to end up hurting your own position.

The best Forex coaches will tell you that before you can really become a successful trader, you have to know yourself and the triggers that influence you. Knowing those will help you overcome them or use them. Are you saying ‘Huh?” about now? Believe me, I understand. I felt the same way the first time that someone tried to explain how the mind games we play with ourselves influence the trades and decisions that we make. Let me break it down into more manageable pieces for you.

Anything involving winning or losing large sums of money becomes emotionally charged.
All right. You’ve heard that playing the market is a mathematical game. Plug in the right numbers, make the right calculations and you’ll come out ahead. So why is it that so many traders end up on the losing end of the market? After all, everyone has access to the same numbers, the same data, the same info – if it’s math, there’s only one right answer, right?

The answer lies in interpretation. The numbers don’t lie, but your mind does. Your hopes and fears can make you see things that just aren’t there. When you invest in a currency, you’re investing more than just money – you make an emotional investment. Being ‘right’ becomes important. Being ‘wrong’ doesn’t just cost you money when you let yourself be ruled by your emotions – it costs you pride. Why else would you let a loser ride in the hope that it will bounce back? It’s that little thing inside your head that says, “I KNOW I’m right on this, dammit!”

Bottom line: You can’t keep emotions out of the picture, but you can learn not to let them control your decisions.
To most people, being right is more important than making money.
Here’s the deal. The way to make real money in the forex market is to cut your losses short and let your winners ride. In order to do that, you have GOT to accept that some of your trades are going to lose, cut them loose and move on to another trade.

You’ve got to accept that picking a loser is NOT an indication of your self-worth, it’s not a reflection on who you are. It’s simply a loss, and the best way to deal with it is to stop losing money by moving on – and really move on. Moving on means you don’t keep a running total of how many losses you’ve had – that’s the way to paralyze yourself. This brings us to the next point:
Losing traders see loss as failure. Winning traders see loss as learning.

Not too long ago, my twelve year old son told me that before Thomas Edison invented a working light bulb, he invented 100 light bulbs that didn’t work. But he didn’t give up – because he knew that creating a source of light from electricity was possible. He believed in his overall theory – so when one design didn’t work, he simply knew that he’d eliminated one possibility. Keep eliminating possibilities long enough, and you’ll eventually find the possibility that works.

Winning traders see loss in the same way. They haven’t failed – they’ve learned something new about the way that they and the market work.
Winning traders can look at the big picture while playing in the small arena.

Suppose I told you that last year, I made 75 trades that lost money, and 25 that made money. In the eyes of most people, that would make me a pretty poor trader. I’m wrong 75% of the time. But what if I told you that my average loss was $1000, but my average profit on a winning trade was $10,000? That means that I lost $75,000 on trades – but I made $250,000, making my overall profit $175,000. It’s a pretty clear numbers game – but how do you keep on trading when you’re losing in trade after trade? Simple – just remember that one trade does not make or break a trader. Focus on the trade at hand, follow the triggers that you’ve set up – but define yourself by what really matters – the overall record.

 

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How To Win At Forex

How To Win At Forex


Foreign currency exchange, the greatest game in the world with a daily trading volume of over a trillion and a half dollars (thirty times larger than the volume of all the U.S. equity markets combined), has it’s share of winners and mostly losers. Do you want to learn how to be in the winners circle?

Like any game it’s important to know the rules in order to win. You don’t have to be a professional to enter the sport, but you should have a basic understanding of the game and how it’s played. Most of this can be learned for free from the online brokerage houses who also give you free trading software so you can actually practice playing the game and gain your confidence and skills before plunking down your real cash in the big leagues.

As in any sport, the most important thing to do is practice before you actually play in the real game. I can’t stress that enough. Practice, practice, practice makes perfect. The only thing it will cost you is your time. When you think your ready to step on the playing field, start small. Most brokers will allow you to start trading in mini accounts with as little as 300 dollars.

 

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Retail Sales

Retail Sales


Retail Sales is very closely watched by both economists and investors. This indicator tracks the dollar value of merchandise sold within the retail trade by taking a sampling of companies engaged in the business of selling end products to consumers. Theretail sales report is a measure of the total receipts of retail stores. The changes in retail sales are widely followed as the most timely indicator of broad consumer spending patterns. Retail sales are often viewed ex-autos, as auto sales can move sharply from month-to-month. It is also important to keep an eye on the gas and food components, where changes in sales are often a result of price changes rather than shifting consumer demand.



Retail sales can be quite volatile and the advance reports are subject to rather large revisions. Retail sales do not include spending on services, which makes up over half of total consumption. Total personal consumption is not available until the personal income and consumption reports are released, typically two weeks after retail sales.
Retail Sales is enough to describe inflation, because closely relate with moving of price from a month to another month. If retail sales increases, the price of this nation rises too. This is because the increase of the goods and service than previous period, so the inflation come.

 

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Is Forex a Sound Investment for Your Money?

Is Forex a Sound Investment for Your Money?


You’ve likely heard of Forex, or the Foreign Exchange Market, and it’s viability as an investment vehicle for your money. However, does the current global financial outlook mean that Forex is not a sound choice for your investments? What does the market offer you, in terms of growth potential? How can these investments help you grow your money?

Forex can be very complicated, even though the basic premise is quite simple. Forex investors do little more than buy one currency at a specific rate and sell it in a global area where that currency is worth more than the amount they originally paid for it. However, the global economic meltdown that has been making news for the past few months may have made you a bit timid about testing the waters. Are Forex investments still sound? Will your money grow, or will you find yourself holding the bag?

Thankfully, Forex is still a viable option for most investors. The current economic problems simply mean that you have to watch your investments very carefully. For instance, the American dollar has been performing very weakly against a strengthening pound on the Asian markets. This means that offloading dollars is going to be somewhat difficult, unless you choose to do so in an economy that is more depressed than what the US is currently suffering.

In order to use Forex as a sound investment option for your money, you will need to be vigilant. Invest only in currencies that have a strong demand and that you know can be sold for more than what you paid. Doing otherwise can be devastating. In addition, the Internet now has numerous resources providing you with accurate, real-time news about the industry, currency values and performance analytics to help you ensure your investment decision makes the most money possible.

 

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Most Attention for Candlestick Chart

Most Attention for Candlestick Chart


I have posted this article before, but in this occasion I will post again because I want to describe about candlestick chart deeply. Why candlestick chart get the extensive interest? There are many reasons and a few are:

1. Candlestick charts are flexible. Users run the spectrum from first-time chartists to seasoned professionals. This is because candlestick charts can be used alone or in combination with other technical analysis techniques. A significant advantage attributed to candlestick charting techniques is that these techniques can be used in addition to, not instead of, other technical tools. I am not trying to convince veteran technicians that this system is superior to whatever else they may be using. The candlestick charting techniques provide an extra dimension of analysis

2. Candlestick charting techniques are for the most part unused in the United States. Yet, this technical approach enjoys a centuries-old tradition in the Far East, a tradition which has evolved from centuries of trial and error.

3. Then there are the picturesque terms used to describe the patterns. Would the expression “hanging-man line” spark your interest? This is only one example of how Japanese terminology gives candlesticks a flavor all their own and, once you get a taste, you will not be able to do without them.

4. The Japanese probably know all the Western methods of technical analysis, yet we know almost nothing about theirs. Now it is our turn to benefit from their knowledge. The Japanese use a combination of candlestick charting techniques along with Western technical tools.

5. The primary reason for the widespread attention aroused by candlestick charts is that using them instead of, or in addition to, bar charts is a win-win situation.

 

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Forex Auto Trader, Full Automation

Forex Auto Trader, Full Automation


Forex is a spectacular business, because it can give the highest of Return of Investment. But, we must have a good skill and enough of experience, because in other side, forex can make us bankrupt. You see, computer technology has come a long way these past 10 years. Artificial Intelligence and Neural Networks have been around for many years and have been used by the greatest financial institutions to give them an edge. Commercially released Artificial Intelligence (AI) applications however were unsophisticated compared to what’s been used by the large corporations.

By using revolutionary Forex AI AutoTraderTM system, any home PC can be turned into a money making machine. It will place the trades automatically, place stop loss orders, exit the trade, just like a human would do, only better.Forex AI AutoTraderTMdoesn’t have emotions. It trades with discipline and learns from its mistakes. Do you want to win with your daily forex? Just get this smart machine for drive your income significantly.