Ever wonder why the fOREX market has become so popular among investor?
Its because you can trade from anywhere in the world. You can execute you trades from the kitchen table, bedroom, or from the nearest deli or coffeehouse. All you need is a computer,an internet connection and a forex software trading application.
Another positive aspect of forex trading is you dont have to have any formal training,a college degree is not required nor do you need a license or diploma. What you do need is a basic understanding of economics and a good forex trading software.
Forex trading software application use algorithmic trading which is most commonly known as automated forex trading. Other commmonly used terms are algo trading, black-box trading, or robo trading. Automated trading is the use of computer programs for entering trading orders with the computer algorithm deciding on certain aspects of the order such as the timing, price, or even the final quantity of the order.
Not much capital is required to open a forex account. You can open a forex account with as little as $200 at most brokerage firms.
There are many forex trading platforms that offer state of art Trading. It is my recommendation you use a platform that allows you to place orders directly by clicking on the chart.
The foreign exchange market is unique because of:
Its trading volumes,
The extreme liquidity of the market,
Its geographical dispersion,
Its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday),
The variety of factors that affect exchange rates.
The low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
The use of leverage
FOREX (SPOT FX) and Currency Futures.
Forex SPOT FX
Foreign exchange spot trading is buying one currency with a different currency for immediate delivery, rather than for future delivery. The standard settlement timeframe for Foreign Exchange Spot trades (except in the case of the Canadian dollar and the Mexican Nuevo Peso, which settle the next day), as opposed to the futures contracts, which are usually three months.
The Spot FOREX market runs continuously on a 24-hour basis from 7:00 am New Zealand time Monday morning to 5:00 pm New York Time Friday evening.
Dealers in every major FX trading center (Sydney, Tokyo, Hong Kong/Singapore, London, Geneva and New York/Toronto) ensure a smooth transaction as liquidity migrates from one time zone to the next.
In spot FOREX, an investor can trade in almost any currency denomination, you may trade electronically any desired amount and up to $10 Million USD.
With Spot FOREX, you may trade foreign currencies vs. USD or vs. each other on a 'cross' basis, for example: EUR/JPY, GBP/JPY, CHF/JPY, EUR/GBP. An investor can trade in almost any currency denomination.
Most currency futures are traded only versus the USD. The Spot FOREX market offers constant liquidity and market depth much more consistently than futures.
Currency Futures
In finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a standardized quantity of a specified commodity of standardized quality (which, in many cases, may be such non-traditional "commodities" as foreign currencies, commercial or government paper [e.g., bonds], or "baskets" of corporate equity ["stock indices"] or other financial instruments) at a certain date in the future, at a price (the futures price) determined by the instantaneous equilibrium between the forces of supply and demand among competing buy and sell orders on the exchange at the time of the purchase or sale of the contract.
Foreign currency futures are exchange traded forward transactions with standard contract sizes and maturity dates — for example, $20,000 for next April at an agreed rate. Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.
The futures market is similar to the stock market,it also closes at the end of the business day. If important data is released overseas while the U.S. and the futures markets is closed. The next day's opening might sustain large gaps with the potential for substantial losses. That is if the direction of the move is against your position.
More well informed investor and entrepreneurs are diversifying their traditional investments like stocks, bonds & commodities with their forex trading due to the risks of currency trading. Currency trading is an extremely risky form of investment. It is most suitable for individuals and institutions capable of handling the potential losses it entails. An account with an broker allows you to trade foreign currencies on a highly leveraged basis. Where else could you get up to approximately 400 times your account equity? You can on the FOREX. NOw that is leverage! The funds in an account that is trading at maximum leverage may be completely lost if the position(s) held in the account experiences even a one percent swing in value. It is possible oflosing one's entire investment. But on the flip slide there is a potential to make a handsom return on your money. Speculation in the foreign exchange market should only be conducted with risk capital funds that, if lost, will not significantly affect the investors financial well-being.
All CFD Traders aim to make money from CFD Trading and to be successful CFD Trader and they all can be successful. They must have a great strategy to help them gain profit and avoid loses. As a CFD trader there are six very simple steps that you can follow to help you become a more successful CFD Trader.
As a CFD Trader you must be realistic. Your goals must be attainable so that you can easily achieve them. An example if you are starting with $5000, don’t expect to make $1,000,000 per month as this is unrealistic however if you aim to make $1000 per month this is achievable.
Make sure you have a great CFD Trading plan and trade the plan, never move away from this.
Monday, February 16, 2009
Currency Trading Pitfalls
Currency Trading Pitfalls - How to Avoid the Top 5 Mistakes in Forex Trading
The currency trading market offers many great opportunities to make money. However, before you jump into the financial forex market, you'll need to proceed with caution and not to rush into it. Here are some of the mistakes or pitfalls you must avoid in order to protect your life savings:
1. Over Leverage
This is a one of the most common mistakes committed by forex traders, especially those who are relatively new to trade the forex financial market. If you can only afford $5000, do not trade $10,000. Trade what you can afford to lose. Do not put all your entire savings at risk. Just like any business, losses will happen, but you need to control your risks and protect your capital.
2. Over Confidence
Don't ever forget that the forex market is smarter than you. So don't ever think you can look into a crystal ball and see where it's going to happen. Otherwise, your capital will be wiped out pretty quickly and your confidence level adversely affected. You will need to do your homework, study the market trends to understand what the market is doing. Some good forex indicators will tell you what the forex financial market is up to. Get a good simple forex trading system that works and follow it closely. Do not ever try to outsmart the market by acting before your forex trading signals tells you to.
3. Over Attach To The Trade
If you have entered a forex trade and is losing you money, get out of it. This is another common mistake of people trading as they become attached to the trade or think it will eventually turn around. If it's losing, it's a loser. The best way to do this is to set a stop loss for every trade you enter. If you're wrong in the trade and got taken out by the stop loss, just move on and focus on the next currency trade.
4. Over Bid
Another major mistake some forex traders make is to chase the price. They entered the market after the currency pair has already made large moves and is prone to price correction. There is no place in the forex trading market for emotional traders. If you allow your emotions to dictate your trading, you'll end up with an empty account. Getting emotional is something you want to avoid at all costs. If the price is unfavorable, do not trade but wait for the next opportunity. Remember, good traders control risk, inexperienced traders chase gains.
5. Over To You, Coach
The most successful forex traders usually find themselves a good coach or mentor. This can be a friend who has been trading forex for quite some time or a forex trader who is willing to share his knowledge and experience. Learn as much as you can from him. Study his forex trading guide and learn how he trade the forex. Do demo trading on the forex trading strategies taught to test it out. And don't hesitate to ask him questions.
Forex trading is a long term business and you need to spend time and effort to master it. Successful traders are those who are patient with the market and themselves. Remember, only serious traders can make serious money. Are you serious enough to trade profitably?
The currency trading market offers many great opportunities to make money. However, before you jump into the financial forex market, you'll need to proceed with caution and not to rush into it. Here are some of the mistakes or pitfalls you must avoid in order to protect your life savings:
1. Over Leverage
This is a one of the most common mistakes committed by forex traders, especially those who are relatively new to trade the forex financial market. If you can only afford $5000, do not trade $10,000. Trade what you can afford to lose. Do not put all your entire savings at risk. Just like any business, losses will happen, but you need to control your risks and protect your capital.
2. Over Confidence
Don't ever forget that the forex market is smarter than you. So don't ever think you can look into a crystal ball and see where it's going to happen. Otherwise, your capital will be wiped out pretty quickly and your confidence level adversely affected. You will need to do your homework, study the market trends to understand what the market is doing. Some good forex indicators will tell you what the forex financial market is up to. Get a good simple forex trading system that works and follow it closely. Do not ever try to outsmart the market by acting before your forex trading signals tells you to.
3. Over Attach To The Trade
If you have entered a forex trade and is losing you money, get out of it. This is another common mistake of people trading as they become attached to the trade or think it will eventually turn around. If it's losing, it's a loser. The best way to do this is to set a stop loss for every trade you enter. If you're wrong in the trade and got taken out by the stop loss, just move on and focus on the next currency trade.
4. Over Bid
Another major mistake some forex traders make is to chase the price. They entered the market after the currency pair has already made large moves and is prone to price correction. There is no place in the forex trading market for emotional traders. If you allow your emotions to dictate your trading, you'll end up with an empty account. Getting emotional is something you want to avoid at all costs. If the price is unfavorable, do not trade but wait for the next opportunity. Remember, good traders control risk, inexperienced traders chase gains.
5. Over To You, Coach
The most successful forex traders usually find themselves a good coach or mentor. This can be a friend who has been trading forex for quite some time or a forex trader who is willing to share his knowledge and experience. Learn as much as you can from him. Study his forex trading guide and learn how he trade the forex. Do demo trading on the forex trading strategies taught to test it out. And don't hesitate to ask him questions.
Forex trading is a long term business and you need to spend time and effort to master it. Successful traders are those who are patient with the market and themselves. Remember, only serious traders can make serious money. Are you serious enough to trade profitably?
Thought About Trading FOREX
Have We Thought About Trading FOREX? Here Are Some Good Reasons To Start
Are you looking to make money? Have you thought about trading on the forex? If you answered yes keep reading. Maybe you have thought that forex trading is just for people with a lot of knowledge and experience with traditional type of investments such as stocks, bonds and commodities. The true of the matter is forex trading is for anyone. Forex traders are made up of a large group of people ranging from everyday people to large corporations.
The foreign exchange market offers you, as an investor the potential to make a lot of money. I don't want to miss lead you but, with any investment there is also a chance to loss money. So do bet the farm, educate yourself and get all the proper tools that you need be a successful forex trader. I have come up with a few good reasons why you should start trading on the foreign exchange, which is commonly referred to as the forex or FX. More and more well informed, individuals and entrepreneurs are diversifying their traditional investments like bonds, stocks & commodities with FOREX
Here are some good reasons to start trading on the FOREX.
1) As a forex trader you will be trading in the world's largest financial market.
The FX market typically involves one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market is the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators , corporations, governments, and other institutions. The average daily volume in the global forex and related markets is continously growing and was has been reported to be over $4 trillion US.
2) The FX market is open 5 days a week / 24 hrs a day.
The stock market has set business hours and closed on banking holidays and weekends. The forex market is 24 hrs a day except on the weekends. The hours of the FX are 22:00 Coordinated Universal Time (UTC) on Sunday until 22:00 UTC Friday. As one market is opening, another countries market is closing. This is appealing to traders because it gives them the flexibility of when they want to trade. This allows forex traders to trade before or after their daily obligations. Most forex traders are using automated forex software applications. The forex trader enters the data into the application and then lets it run. Amazing!
3) The FOREX market is never a bear or a bull.
As a forex trader you can have access to an array of currencies. When you trade on the forex you are trading currencies "pairs". For example, US dollar vs. CHF (Swiss franc), one side of every currency pair (for example, USD/CHF) is constantly moving in relation to the other. When you make a forex transaction you are buying a particular currency, but at the same time you are selling the other currency in that particular pair. As the market moves, one of the currencies will increase in value and other will decrease in value. The key it is up to you to choose the correct currency to be long (the currency you bought) or short (the currency you sold).
4) The FOREX market offers a great amount of leverage.
You are permitted to trade foreign currencies on a highly leveraged basis sometimes up to 400 times your investment (400:1) with some brokers.
The mini FX accounts allow you to trade with just 0.25-7 of the contract value. They will instantly recognize that the FX market provides much greater leverage. The stock trader, who must post at least 50% margin, there's no comparison. If you're looking for an efficient market to trade in look no further, the Forex Market is the place.
5) Predictable Cycles and Trends.
Currency prices in the FX market generally repeat themselves in relatively predictable cycles, creating trends. The trends that foreign currencies develop are
Advantageous for traders who use the "technical" analysis verse the "fundamental" analysis. It is my opinion that both methods should be used. But, as a technically trained trader, you can easily identify new trends and breakouts, to enter and exit positions.
6) Forex brokers commissions and FX liquidity.
There are none of the usual fees, which futures and equity traders pay. FOREX transactions are traded over-the-counter (OTC), via a global electronic network. When a FX transaction takes place, what you see on your trading screen, is what you get. Thus, allowing you to make quick decisions on your trades without having to worry or account for fees that may affect your profit/loss or slippage. But in the equity and commodity markets, you must pay both a commission and exchange fees. The OTC structure of the FX market eliminates exchange and clearing fees, which in turn lowers transaction costs.
Like all traded financial products, over-the-counter currency (OTC) trading involves a bid/ask spread. This spread represents the prices at which your counterpart is willing to trade. The broker receives a part of this bid/ask spread.
What is traded, bought and sold on the forex market is something that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is actually going to be cash. From one currency to another, the availability of cash in the forex market is something that can happen fast for any investor from any country. Because the currency market offers round-the-clock liquidity, you receive tight, competitive spreads both intra-day and night.
As you can see the FX market can be a very profitable market. As a forex trader you do not need a degree or any special training. But you do need to educate yourself and be aware economic factors that relate to FOREX. Using an automated software application will help you get the ball rolling. Happy trading
http://finan4you.blogspot.com/
Are you looking to make money? Have you thought about trading on the forex? If you answered yes keep reading. Maybe you have thought that forex trading is just for people with a lot of knowledge and experience with traditional type of investments such as stocks, bonds and commodities. The true of the matter is forex trading is for anyone. Forex traders are made up of a large group of people ranging from everyday people to large corporations.
The foreign exchange market offers you, as an investor the potential to make a lot of money. I don't want to miss lead you but, with any investment there is also a chance to loss money. So do bet the farm, educate yourself and get all the proper tools that you need be a successful forex trader. I have come up with a few good reasons why you should start trading on the foreign exchange, which is commonly referred to as the forex or FX. More and more well informed, individuals and entrepreneurs are diversifying their traditional investments like bonds, stocks & commodities with FOREX
Here are some good reasons to start trading on the FOREX.
1) As a forex trader you will be trading in the world's largest financial market.
The FX market typically involves one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market is the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators , corporations, governments, and other institutions. The average daily volume in the global forex and related markets is continously growing and was has been reported to be over $4 trillion US.
2) The FX market is open 5 days a week / 24 hrs a day.
The stock market has set business hours and closed on banking holidays and weekends. The forex market is 24 hrs a day except on the weekends. The hours of the FX are 22:00 Coordinated Universal Time (UTC) on Sunday until 22:00 UTC Friday. As one market is opening, another countries market is closing. This is appealing to traders because it gives them the flexibility of when they want to trade. This allows forex traders to trade before or after their daily obligations. Most forex traders are using automated forex software applications. The forex trader enters the data into the application and then lets it run. Amazing!
3) The FOREX market is never a bear or a bull.
As a forex trader you can have access to an array of currencies. When you trade on the forex you are trading currencies "pairs". For example, US dollar vs. CHF (Swiss franc), one side of every currency pair (for example, USD/CHF) is constantly moving in relation to the other. When you make a forex transaction you are buying a particular currency, but at the same time you are selling the other currency in that particular pair. As the market moves, one of the currencies will increase in value and other will decrease in value. The key it is up to you to choose the correct currency to be long (the currency you bought) or short (the currency you sold).
4) The FOREX market offers a great amount of leverage.
You are permitted to trade foreign currencies on a highly leveraged basis sometimes up to 400 times your investment (400:1) with some brokers.
The mini FX accounts allow you to trade with just 0.25-7 of the contract value. They will instantly recognize that the FX market provides much greater leverage. The stock trader, who must post at least 50% margin, there's no comparison. If you're looking for an efficient market to trade in look no further, the Forex Market is the place.
5) Predictable Cycles and Trends.
Currency prices in the FX market generally repeat themselves in relatively predictable cycles, creating trends. The trends that foreign currencies develop are
Advantageous for traders who use the "technical" analysis verse the "fundamental" analysis. It is my opinion that both methods should be used. But, as a technically trained trader, you can easily identify new trends and breakouts, to enter and exit positions.
6) Forex brokers commissions and FX liquidity.
There are none of the usual fees, which futures and equity traders pay. FOREX transactions are traded over-the-counter (OTC), via a global electronic network. When a FX transaction takes place, what you see on your trading screen, is what you get. Thus, allowing you to make quick decisions on your trades without having to worry or account for fees that may affect your profit/loss or slippage. But in the equity and commodity markets, you must pay both a commission and exchange fees. The OTC structure of the FX market eliminates exchange and clearing fees, which in turn lowers transaction costs.
Like all traded financial products, over-the-counter currency (OTC) trading involves a bid/ask spread. This spread represents the prices at which your counterpart is willing to trade. The broker receives a part of this bid/ask spread.
What is traded, bought and sold on the forex market is something that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is actually going to be cash. From one currency to another, the availability of cash in the forex market is something that can happen fast for any investor from any country. Because the currency market offers round-the-clock liquidity, you receive tight, competitive spreads both intra-day and night.
As you can see the FX market can be a very profitable market. As a forex trader you do not need a degree or any special training. But you do need to educate yourself and be aware economic factors that relate to FOREX. Using an automated software application will help you get the ball rolling. Happy trading
http://finan4you.blogspot.com/
Financial Independence Trading Currencies
How We Found My Way To Financial Independence Trading Currencies
It all started when I was doing nothing one night and I got on the internet looking around for anything interesting to read. Then I saw one of those little blue ads, which we all know now are from Google. That’s how long I have been doing this; there wasn’t even a Google then. So sad, not that there wasn’t a Google, but how long I have been on the computer looking for something appealing to do!
The advertisement said something like; “How I Make $50,000 A Month.” First, I thought it was a joke or just one more “Get Rich Quick Scream,” but I clinked on it anyway. That was the start of this tremendous adventure that can tear your heart out at one moment and make you feel like you’re the smartest person in the world five minutes latter.
The mouse click of the advertisement takes me to a site offering automated Forex Trading Systems for sale. I read their sales pitch and I will never forget what is said, “Just Turn Your Computer On and Plug in our System and go Play Golf and we will Make you Rich.” It sounded great, but I knew there was no way I could buy a piece of software for $100 and it was going to make me rich. But, the supposedly intelligent fellow I am I did it anyway.
The first few days went great. I forget the actual amounts I made, but it was something between $100 and $150 a day for the first three days. Then day four came and I lost $500 which wiped out all of my winnings and put me in the red. Enough of this I said to myself, if I want to really make money I need to find out what I am doing. Then I started searching the internet for free currency trading training tools.
The entire time I was reading everything I could get my hands on in the back of my mind I never forgot that the software did do a few things great. One was that it collected huge amounts of data, which I could never have done myself. Second, it sorted through that data and provided me specific information based on its initial programming. Third, it allowed me to tweak the program for what I wanted to see and turn the automated trading off.
When I first start searching the internet for free information relating to Forex trading for profits I found out there is not very much of it. Then I hit the mother-load. I keep noticing during my search that all the brokerage firms offer you free a free education on currency trading and a free demo account when you fill out their application for an account. I tried the first one and I did not have to deposit any money to receive the free educational material as well as the demo account. I tried a second one, and then a third one and found out they all worked that way.
I signed up for four of them and read everything they had. By the time I got to the fourth one I realized I was not getting very much more new information. They were just rehashing what I read at the previous sites. But, at least now I know what I am doing, or I thought I did. The next thing I did was I starting messing around with the demo accounts. And the same thing would happen sooner or later. I would do fine for a while making money and then I would crash and burn going broke time after time.
Then a revelation hits me one morning while I am reading the newspaper. I read a story about Japan’s economy and realize that was why the trade I made two days ago went bad. This was my first big turning point and a huge tip for those of you that ever read this short story. My newspaper had it two days after it happened, which does not help me at all. I check the records on my demo account and I able to determine what time the story was released. Because the Yen, started to weaken although the trend line from the software informed me it should getting stronger.
Anybody that has read the paper knows that all of the newspapers subscribe to wire services like the AP or Reuters. I do a search for Reuters because I wanted to keep their site up all the time and watch the news in the business section as it came up. After a day or two of doing this I notice a button for a RSS feed. I did not have a clue what that was, but I put the mouse on it and click it anyway. Wow, the “Holy Grail” of information for FREE. I could not believe it. What a RSS feed is a system where you receive continues information for free at the same time it is going across the wires to the newspapers. They will send to your computer after you sign up for it. Not only that, I am able to subscribe to the channel I want. Just like a newspaper that has different sections, such as; local new, world new, business, or sports Reuters offers you the same thing in a channel. I sign up for the business RSS feed. Finally, now I am starting to get somewhere.
I feel a lot more confident now and it is back to the demo account, again! I am not going to invest any more money until I am sure I can make money. Now I have three screens up constantly, the demo account from the brokerage firm, the software which is based on currency trends and the Reuters RSS feed from the business section. I keep playing with it and now instead of losing a load of money I am only losing a small portion. I am getting closer to where I want to be. But I am still losing money and I need to know why this is happening? I am never going to get where I want to go, which is quitting my job and telling my boss to stuff it if I can’t make money doing this.
Every time I go to bed I can’t sleep because I am now obsessed with be able to make money trading currencies. I just keep thinking about why I can’t make a profit at this. I finally decide to purchase a comprehensive currency training class online for a few hundred bucks. After all, I tell myself you can make that up in one trade. I take the class and I realize that all the free education I received from the brokerage firms, while it was great, I only received the equivalent of a high school degree in Forex trading and the online course really increased the level of training and I equated it to a college degree in currency trading.
Again, back to the demo account and I know now that I am going to start winning this time for sure. Finally I am able to start making real money, but no now I am just breaking even. WHY, WHY, WHY? I remember something they mentioned in the class quite a few times, “Trading Signals.” The first software I bought was programmed around trends, it other words which way has a currency been moving. After I bought the first software and started looking around for free educational information I noticed there was other software programmed specifically for trading signals. A software based on trading signal system sends you a notice instantly as soon as it is aware of what has been programmed into the software as its basis for signals has changed. By now, that is it; I am going to win at this I don’t care what I have to do. There goes another $100 bucks when I buy a piece of software for trading signals.
Back to the demo account again, one more time, will it never end? Now I have four screens up, if you can believe it. I have the two software systems based on trends and signals, the Reuters RSS feed and the demo account. I have so much information coming at me constantly I am starting to feel like a computer myself. After a while I get used to it and it is really not that tough.
My trend software is telling me which way a currency has been moving and my signal software is telling me every time something starts to change. I quickly find out I need to adjust the signal software down, because it is sending out so many signals with every little change in the market that it is driving me crazy. After I make that adjustment the signals slow down and I am getting fewer of them. As soon as I get a new signal from the software on a currency I check Reuters to see if they have news feed for that particular country.
At this point I realize I can’t concentrate on every currency that is traded and I need to narrow it down. I adjust the software to only process information on the US Dollar, the EURO, the Pound and the Yen. My information overload is decreasing as is my tension level. But, I am still not where I want to be. Now is when I start making a little money, but not enough. I am so close and of course I can’t sleep, it is driving me crazy.
What else can I do? Next I start playing around with my Stop-Loss (SL) and Take-Profit (TP) percentages when I enter a trade. I might want a profit of 100% (your never going to get 100%, don’t even think about it, this is just an example,) so I would put my SL at 50%. Or if I set my TP at 20% I might set the SL at 10%, 12% or 5%, whatever, you get the idea. Don’t worry if you don’t know what I am talking about, when you set up your demo account you will understand. This was finally the turning point; I am really starting to make good money with the demo account. Tomorrow the BIG TIME BABY, the real money account.
I don’t even want to tell you what I do next, I really could not be this stupid, but I am. I search the internet for a brokerage firm that has really low Pip’s which is how the brokerage firms make’s money. In stead of paying them a commission on each trade you pay them a percentage of your trade. The higher the Pip rate the higher the commission. My demo account worked great, I have no idea why I changed. I set up my account with the new broker and fund it with $10,000. After a week I am up $3,000, not so bad. And then the big bang hits, where their stinking server crashes for fifteen minutes while I am trying to get out of a losing trade. I was only down $200 when I wanted out. By the time the blasted server gets rebooted I am down $5,000. What an expensive lesson, I really could not be that dumb and head back to my broker where I had the demo account. I never once had the server crash on me and after I returned I never looked back from there.
That’s my story. The end! This is how I did it. I have never been able to make $50,000 a month like the first advertisement said I could. But, I have made enough to tell my boss to shove it and trade Forex for a living. Of course I learned a few other things along the way, like only trading when the markets at the most active and a few other little tricks. But, if you do what I did and refuse to give up, anybody with a reasonable intelligence can do it.
One really important suggestion to part you with and that is if you noticed I did not start trying to trade with real money until I was successful with the demo account. I think this is one of the most important factors of why I made it. It allowed to practice, learn and develop my own trading style until I really felt there was no way I was not going to make and did not feel the pressure of losing money that I would of felt had it been my own money.
Author : Willaim R Alheim Jr
It all started when I was doing nothing one night and I got on the internet looking around for anything interesting to read. Then I saw one of those little blue ads, which we all know now are from Google. That’s how long I have been doing this; there wasn’t even a Google then. So sad, not that there wasn’t a Google, but how long I have been on the computer looking for something appealing to do!
The advertisement said something like; “How I Make $50,000 A Month.” First, I thought it was a joke or just one more “Get Rich Quick Scream,” but I clinked on it anyway. That was the start of this tremendous adventure that can tear your heart out at one moment and make you feel like you’re the smartest person in the world five minutes latter.
The mouse click of the advertisement takes me to a site offering automated Forex Trading Systems for sale. I read their sales pitch and I will never forget what is said, “Just Turn Your Computer On and Plug in our System and go Play Golf and we will Make you Rich.” It sounded great, but I knew there was no way I could buy a piece of software for $100 and it was going to make me rich. But, the supposedly intelligent fellow I am I did it anyway.
The first few days went great. I forget the actual amounts I made, but it was something between $100 and $150 a day for the first three days. Then day four came and I lost $500 which wiped out all of my winnings and put me in the red. Enough of this I said to myself, if I want to really make money I need to find out what I am doing. Then I started searching the internet for free currency trading training tools.
The entire time I was reading everything I could get my hands on in the back of my mind I never forgot that the software did do a few things great. One was that it collected huge amounts of data, which I could never have done myself. Second, it sorted through that data and provided me specific information based on its initial programming. Third, it allowed me to tweak the program for what I wanted to see and turn the automated trading off.
When I first start searching the internet for free information relating to Forex trading for profits I found out there is not very much of it. Then I hit the mother-load. I keep noticing during my search that all the brokerage firms offer you free a free education on currency trading and a free demo account when you fill out their application for an account. I tried the first one and I did not have to deposit any money to receive the free educational material as well as the demo account. I tried a second one, and then a third one and found out they all worked that way.
I signed up for four of them and read everything they had. By the time I got to the fourth one I realized I was not getting very much more new information. They were just rehashing what I read at the previous sites. But, at least now I know what I am doing, or I thought I did. The next thing I did was I starting messing around with the demo accounts. And the same thing would happen sooner or later. I would do fine for a while making money and then I would crash and burn going broke time after time.
Then a revelation hits me one morning while I am reading the newspaper. I read a story about Japan’s economy and realize that was why the trade I made two days ago went bad. This was my first big turning point and a huge tip for those of you that ever read this short story. My newspaper had it two days after it happened, which does not help me at all. I check the records on my demo account and I able to determine what time the story was released. Because the Yen, started to weaken although the trend line from the software informed me it should getting stronger.
Anybody that has read the paper knows that all of the newspapers subscribe to wire services like the AP or Reuters. I do a search for Reuters because I wanted to keep their site up all the time and watch the news in the business section as it came up. After a day or two of doing this I notice a button for a RSS feed. I did not have a clue what that was, but I put the mouse on it and click it anyway. Wow, the “Holy Grail” of information for FREE. I could not believe it. What a RSS feed is a system where you receive continues information for free at the same time it is going across the wires to the newspapers. They will send to your computer after you sign up for it. Not only that, I am able to subscribe to the channel I want. Just like a newspaper that has different sections, such as; local new, world new, business, or sports Reuters offers you the same thing in a channel. I sign up for the business RSS feed. Finally, now I am starting to get somewhere.
I feel a lot more confident now and it is back to the demo account, again! I am not going to invest any more money until I am sure I can make money. Now I have three screens up constantly, the demo account from the brokerage firm, the software which is based on currency trends and the Reuters RSS feed from the business section. I keep playing with it and now instead of losing a load of money I am only losing a small portion. I am getting closer to where I want to be. But I am still losing money and I need to know why this is happening? I am never going to get where I want to go, which is quitting my job and telling my boss to stuff it if I can’t make money doing this.
Every time I go to bed I can’t sleep because I am now obsessed with be able to make money trading currencies. I just keep thinking about why I can’t make a profit at this. I finally decide to purchase a comprehensive currency training class online for a few hundred bucks. After all, I tell myself you can make that up in one trade. I take the class and I realize that all the free education I received from the brokerage firms, while it was great, I only received the equivalent of a high school degree in Forex trading and the online course really increased the level of training and I equated it to a college degree in currency trading.
Again, back to the demo account and I know now that I am going to start winning this time for sure. Finally I am able to start making real money, but no now I am just breaking even. WHY, WHY, WHY? I remember something they mentioned in the class quite a few times, “Trading Signals.” The first software I bought was programmed around trends, it other words which way has a currency been moving. After I bought the first software and started looking around for free educational information I noticed there was other software programmed specifically for trading signals. A software based on trading signal system sends you a notice instantly as soon as it is aware of what has been programmed into the software as its basis for signals has changed. By now, that is it; I am going to win at this I don’t care what I have to do. There goes another $100 bucks when I buy a piece of software for trading signals.
Back to the demo account again, one more time, will it never end? Now I have four screens up, if you can believe it. I have the two software systems based on trends and signals, the Reuters RSS feed and the demo account. I have so much information coming at me constantly I am starting to feel like a computer myself. After a while I get used to it and it is really not that tough.
My trend software is telling me which way a currency has been moving and my signal software is telling me every time something starts to change. I quickly find out I need to adjust the signal software down, because it is sending out so many signals with every little change in the market that it is driving me crazy. After I make that adjustment the signals slow down and I am getting fewer of them. As soon as I get a new signal from the software on a currency I check Reuters to see if they have news feed for that particular country.
At this point I realize I can’t concentrate on every currency that is traded and I need to narrow it down. I adjust the software to only process information on the US Dollar, the EURO, the Pound and the Yen. My information overload is decreasing as is my tension level. But, I am still not where I want to be. Now is when I start making a little money, but not enough. I am so close and of course I can’t sleep, it is driving me crazy.
What else can I do? Next I start playing around with my Stop-Loss (SL) and Take-Profit (TP) percentages when I enter a trade. I might want a profit of 100% (your never going to get 100%, don’t even think about it, this is just an example,) so I would put my SL at 50%. Or if I set my TP at 20% I might set the SL at 10%, 12% or 5%, whatever, you get the idea. Don’t worry if you don’t know what I am talking about, when you set up your demo account you will understand. This was finally the turning point; I am really starting to make good money with the demo account. Tomorrow the BIG TIME BABY, the real money account.
I don’t even want to tell you what I do next, I really could not be this stupid, but I am. I search the internet for a brokerage firm that has really low Pip’s which is how the brokerage firms make’s money. In stead of paying them a commission on each trade you pay them a percentage of your trade. The higher the Pip rate the higher the commission. My demo account worked great, I have no idea why I changed. I set up my account with the new broker and fund it with $10,000. After a week I am up $3,000, not so bad. And then the big bang hits, where their stinking server crashes for fifteen minutes while I am trying to get out of a losing trade. I was only down $200 when I wanted out. By the time the blasted server gets rebooted I am down $5,000. What an expensive lesson, I really could not be that dumb and head back to my broker where I had the demo account. I never once had the server crash on me and after I returned I never looked back from there.
That’s my story. The end! This is how I did it. I have never been able to make $50,000 a month like the first advertisement said I could. But, I have made enough to tell my boss to shove it and trade Forex for a living. Of course I learned a few other things along the way, like only trading when the markets at the most active and a few other little tricks. But, if you do what I did and refuse to give up, anybody with a reasonable intelligence can do it.
One really important suggestion to part you with and that is if you noticed I did not start trying to trade with real money until I was successful with the demo account. I think this is one of the most important factors of why I made it. It allowed to practice, learn and develop my own trading style until I really felt there was no way I was not going to make and did not feel the pressure of losing money that I would of felt had it been my own money.
Author : Willaim R Alheim Jr
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