Category: Forex

Forex trading news is part of the Traders-Paradise website. Here you’ll find a valuable explanation about the Forex trading and investing strategies, analysis, predictions.

Forex market or shorter FX is the market where different national currencies are traded. It is the largest, most liquid market in the world. Also, it is an electronic network of banks, brokers, institutions, and individual traders.
If you want to know more about trading forex and the Forex market as a whole, you’ll be the regular visitor of the Traders-Paradise website.

Want to know more about how to trade forex?

We have free Forex guides that cover how to get started, support you to make your first trades. Moreover, Traders-Paradise outlines how to create a long-term trading plan for long-term success.
There are several reasons why anyone should opt for forex trading. By trading forex, you can access a market that is far larger than any other market in the world.

And Traders-Paradise gives you an insight on how to start. guides you through the registration process. Our team will teach you how to start forex trading with little money, how to avoid traps of trading. Our posts are for all of you who know nothing about the Forex market but at the same time, for those seeking advanced and rare techniques.

What else will you find here?

Most important news about forex trading and investing. But our primary goal is to show you how simple is Forex trading and investing.
Join us, follow us, to become successful traders and investors.

Best Lot Size In Forex – Which to Choose?

The lot size matters because it has a great impact on how much market movement will change your account.

To know what is the best lot size in Forex we have to know what lot size is. Particularly if you just stepped to this world of currency trading. The lot represents the smallest trade size you can set on the forex market. Keep in mind that the lot size will reflect how much risk you are willing to take.

Without a doubt, the forex market can produce unbelievable growth. For beginner traders, it sounds promising but if you don’t understand how the forex market works, your chances to have success are close to zero. Everyone would like to know what is the best lot size in Forex to start the trading. First of all, you have to know that your account must be kept safe. What does it mean?

If you choose the wrong lot size and have several losing trades in a row, which could happen even for the experienced traders, your account is at risk. It can be closed and deleted. For that not to happen, you’ll have to choose the best lot size in Forex. At least the right one.

Everyone will tell you to choose the best lot size, but how to do that? For example, you can use risk management as a great tool. You have to decide what amount you are prepared to risk without consequences. The same comes both for your demo trading account and for your real trades.

The lot size affects how much a market move changes your accounts. For example, a 100-pip move on a small trade is not the same as a 100-pip move on a large trade.

What is the lot size in Forex?

Forex is traded in precise amounts that are called lots. The Standard size for a lot is 100.000 units of the base currency. However, there are other lot sizes such as Mini lot size with 10.000 units, Mikro lot size with 1.000 units, and Nano lot size with 100 units. A lot represents the predetermined number of currency units you can buy or sell when entering the forex trade.

The standard lot in forex trading represents 100.000 units of the account currency. For example, if you are trading a dollar, this means your trade value is $100.000. Since the average pip value for the standard lot is roughly $10, this means every 10 pip move in the forex market will produce you $100 of profit or loss. Experts recommend trading this lot size only if your account is filled with at least $25.000.

As we said, the mini lot size represents 10.000 units based on your account currency. If your account is in dollars, the average pip will be about $1. Do you think it is modest? Well, the forex market can move for 100 pips per day and you can profit or lose $100 in your trading in an hour or two. Experts’ recommendation is to trade a mini lot size only if you have at least $2.000 on your trading account. For beginners, they have a suggestion, also: Avoid this lot size.

The micro lot size was the smallest lot size for a long time. It represents 1.000 units with a pip value of 10 cents. Experts highly suggest to the beginners to trade forex in this lot size. The suggested account value for trading in micro lot size is from $200 to $500, which varies depending on how many pairs you want to trade.

Several years ago, arrived the nano lot size with its 100 units of currency and an average pip value of 1cent. Beginners may start trading this lot size at just $25. You cannot find a lot of brokers that will offer you to trade this nano lot size but it can be useful to figure out how your new trading strategy is working, so you can use this lot size for testing it.

How to choose the best lot size for your forex trading?

One of the best criteria is to determine your risk. You can calculate it in percentages with regard to the rule of 1%. This means in case you have to close out your trade for a loss but your risk has to be less than 1% of your total account. For example, if you have an account with $5.000, you shouldn’t risk losing more than $50 in any position. If your limit risk is 0,5% then you can lose $25 in any position.

Trade size is an important factor since larger lots boost profits and losses per pip. To identify how big your position size should be, use calculation cost per pip. Always calculate it.

How to calculate the trade size?

As with trading stocks, for every open position, you’ll need a stop-loss to set. In other words, you have to figure out where you want to exit the trade if the market starts to move against you.

There are numerous ways to set stops. You can use the main lines of support and resistance to place the order. For example, price action, , Fibonacci, pivots, can help to find these values. The point is to count the number of pips from your open price to your stop-loss order.

The last action in discovering the best lot size is to define the pip cost for your trade. Pip cost means how much you will lose, or gain per pip. When your lot size increases your pip cost will do the same and vice versa. So, how big should trade size be?

Let’s calculate the perfect cost per pip using the 1% risk rule, a $5.000 account, and a stop-loss 10 pips away to find the best lot size in Forex trading. Let’s do some math.

Starting balance = $5.000
1% risk x 0,1
Trade risk is $50
Trade risk : Stop-loss in pips = $50 : 10 = $5
5 : 0,0001=50.000

This means you can trade one lot of 50.000 for $5 per pip cost.

Determine position size when trading Forex

In Forex trading, the position size comes before determining entry or exit levels. That is to say, it is more important. What does it mean? Despite the prevalent thinking that the most important thing in trading is to have the best possible strategy, in Forex trading position size is more important. Your position size shouldn’t be too small or too big if you want to avoid taking too much risk. The same comes with taking a too small risk. Taking too much risk could lead you to drain your account to zero and quickly.

The position size is defined by the number of lots and the size of the lot you buy or sell in Forex trading. The risk you are taking consists of two parts: account risk and trade risk. You’ll have to fit these parts if you want an excellent position size. Your position size doesn’t depend on the market condition or your setups. It even doesn’t depend on your strategy. It is all about account risk limit per trade, pip risk per trade, and pip value.

You can calculate it. Here is the formula

the amount at risk = pips at risk x pip value x lots traded

The number of lots traded represents your position size.
Let’s imagine you have a $5,000 account and you risk 1% of your account on any trade. Your amount at risk is $50. If you’re trading the EUR/USD currency pair, you may decide to buy at 1.2051 and place a stop loss at 1.2041. This indicates you’re willing to put 10 pips at risk or $100.

Let’s imagine further that you are trading in mini lots. Any pip change will have a value of $1 So, put this in the formula.

$100 = 10 x $1 x lots traded

Let’s divide both sides of the formula by $10, and you’ll have

lots traded = 10

This means you are trading 10 mini lots. But this number of lots is equal to the one standard lot, so you could trade one standard lot, right? But what if the result in this formula is, for example, 7,18? That would mean that you should trade 7 mini lots and one micro lot.

Bottom line

The truth is that Forex traders usually trade in mini lots or micro-lots. You might think it isn’t so sexy, but it is a more secure path. When you keep your lot size as small as possible you have more chances to play this game longer and profit. The reason behind this is that these sizes of lots represent the ideal balance between capital you invest and the risk you are willing to take. Moreover, if you use a higher lot size and have less capital on your account, it is more possible to end up with empty hands than to have any profits. In other words, you will have losing trades.

The beginners should start to trade forex in micro-lots size or mini lot size. After they gain experience and confidence, they can pass to the next level. Also, as in any trading activity, you have to maintain balance in your trading account. One of the most important actions in trading is extremely visible here, in forex trading. The usage of stop-loss and target levels is extremely important.

In conclusion, the best lot size in forex trading depends on your capital, experience, goals, risk tolerance. Never risk too much, or the risk you’re not able to handle. Risk management is an essential part of any trade.

21st May 2020
Forex Strategy That Works For You

Having discipline is a key feature of forex trading. How can you have discipline when you are in a trade? One way is to have a trading strategy that works for you. The key part is the profit.

By Guy Avtalyon

It will require some time to find a forex strategy that works for you especially. Every forex trader has a unique style, risk tolerance, amount of money available, and trading goals. So, your forex trading strategy that works for you not necessarily will work for other traders. But some forex trading strategies can be suitable for everyone.

First of all, let’s explain what a forex trading strategy is.

What is a forex trading strategy?

It is a technique that a forex trader uses to discover when to buy or sell a currency pair. There are numerous forex strategies that traders can practice. For example, technical analysis and fundamental analysis. A forex trading strategy that works should provide you to analyze the market and execute trades with clear risk management systems.

A Forex strategy that works

Forex strategies are divided into several organizational structures which is a great help to traders to find a forex trading strategy that works for each trader the best. The main point is to locate the most suitable strategy.

So, we can divide forex trading strategies into main categories: Price action trading that includes Trend trading, Scalp trading, Position trading, Range trading, Day trading, Swing Trading, and Carry trading.

Forex trading demands to put together various factors to form a particular forex trading strategy that works for you. There are innumerable strategies that traders can use. What really matters is to understand and feel comfy with the strategy you create and use. Each forex trader has individual intentions and sources. That fact must be taken into factor when you want to pick or create a forex strategy that works for you particularly.

You can use three criteria to analyze distinct strategies based on their convenience. To find a forex strategy that works you have to determine what time resource is required. Further, what are the frequency of trading chances? And last but not the least, what is the ideal distance to a target.

To compare the forex strategies based on these three criteria, you have to know how efficient they are based on other traders’ experiences. It is always smart to check how a particular forex strategy works for others.

How to find a forex strategy that works?

The crucial is the risk-reward ratio. So, based on historical data and traders’ experience position trading will provide you the highest risk-reward ratio.

Further, you have to examine how much time you’ll need to invest to monitor your trades. For example, scalp trading is a high-frequency strategy so it will require most of your time.

In order to help you to find a forex strategy that works for you, we’ll explain how each of them works.

What is price action trading?

Price action trading means studying historical prices to create technical trading strategies. The advantage of this strategy is that you can use it as a stand-alone. However, you can use it in combination with an indicator. Fundamentals are rarely applied, but sometimes it is smart to include economic circumstances as a supporting part.

The price action strategy actually covers several other strategies.

For example, the length of trade. The strategy gives you an opportunity to use multiple time frames in trading. It is suitable for long, medium, and short-term tradings.

What is most important with this strategy and the most convenient you can use it without any indicators, complex techniques. It can be used based on simple price action.

Few more words about price action strategy

All price action in forex trading comes from buyers (that are bulls) and sellers (that are bears). When the GBP/USD currency pair goes up it’s due to more bulls than bears. Of course, when this pair is going down it is vice versa. So, you may conclude, and you’ll be right, that we have a permanent fight between bulls and bears in the forex market.

This forex trading strategy is all about examining who controls price, bulls, or bears and who’ll control the price.

When bulls are in control and you have proof they will continue that, it is the right time to go long, meaning you can buy. The opposite is when the bears are in control of price. That means it’s time to short, meaning you can sell.

But how to examine who is in control?

This forex strategy that works always is quite simple to use. The essential is to use just two price action methods or techniques.

One is support and resistance zones. The buy and sell zones are easy to identify and add them to your charts. When the price hits these zones there are two possible directions: the price will halt or reverse. So you’ll know that is the right time to buy or sell.

The price action forex strategy that works in all conditions

It doesn’t matter if it is trending, low volatility, high volatility forex market, this strategy will work anyway, and generate profit. It is different from strategies based on indicators that are suitable for particular market conditions. For example, if you use an indicator strategy that is good for the high volatility market, it will slip in other market conditions. It is due to indicators’ inability to adjust for different market conditions. One indicator is good for one market condition.

Price action is what can be adjusted to the time frames, different currency pairs, market conditions, and moreover, and to many traders though. The point of this forex trading strategy is that it literally works for everyone because it keeps the trading simple.

What is the purpose of price action strategy

The best forex strategies use price action. As we mentioned above it is also known as technical analysis. Speaking about technical currency trading strategies, we can recognize two main techniques: follow the trend and counter-trend trading. Both are aimed to profit by identifying and utilizing price patterns.

To profit from price patterns, the most powerful approach is to identify support and resistance. In other words, both show the market tends to bounce back from prior lows and highs. Support means the market tends to increase from an earlier confirmed low. Resistance is the market that tends to fall from an earlier confirmed high. This happens because traders want to predict the next prices against current highs and lows.

What happens when the market approaches recent lows?

It is obvious that buyers will seek what they see as cheap and buy. On the other hand, when the market nears the recent highs, the sellers will lock in a profit since it is a great opportunity to sell at expensive prices. So, recent highs and lows are measures to evaluate the current price.

Also, support and resistance levels. Both happen because traders predict specific price action at these points and play according to their expectations. This has a great impact on the market because their actions can cause the market to go in their direction.

But keep in mind some rules.

First, support and resistance levels aren’t fixed rules. They are a consequence of the action of traders.
When traders follow the trend they actually want to profit from support and resistance break-downs.
Counter-trending is the opposite of trend following. The traders that use this technique will sell when a new high is touched, and buy when a new low is reached.

The main goal in forex trading is the same as it is in any other trading: eliminate the losses and have more winning trades. You can have it if you use the forex trading strategy that works. It is essential to find the one that suits you the best. That means you have to develop a set of rules and follow them if they work. If not, simply change them. However, the best practice is to follow some proven strategy. Especially if you are planning to enter forex trading and you don’t have enough knowledge and experience. Relying on strategies that are not proven and tested might lead you to enormous losses and failures. So, the best chance for you is to find the right forex trading strategy that works and use it.

Stay tuned, we will write more about forex trading and powerful forex trading strategies and techniques.

15th April 2020
Forex News: Dollar weaker despite the trade optimism

Forex News for December 27: According to FXStreet, the US dollar ends on the last day (December 26) with losses against most major competitors in weak market conditions. Major pairs continue in limited ranges while trading is boring because most markets are closed due to holidays.

Good news comes from the Chinese Foreign Minister and US President Trump. Both of them confirmed that the signing of phase one of the trade deal is just around the corner.

The EUR/USD pair advanced above 1.1100, while the GBP/USD pair re-took the 1.3000 marks, due to the dollar’s weakness, and chances of bigger gains are actually limited.

The Bank of Japan Governor Kuroda said that the central bank would ease policy further if its 2% inflation goal came under peril. He also showed more confidence in the global economic outlook. USD/JPY near December high.

The Canadian dollar is the strongest.

All major markets are opened today (Friday 27), but there is a little action.

Forex News: Dollar Index

The Dollar Index is tanking today as traders await the signing of the “phase one” trade deal.
There are two support levels in the focus of the psychological 97.00 area and below that 96.72 wave low.
There is also a trendline marked in red that might act as support a support area.
Finally, looking at the RSI there seems to be room for a move lower as we are not in the oversold area.

Image source: FXStreet

EUR/USD consolidated near five-day highs of 1.1122 while the Cable traded choppily around the 1.30 handle

Asian stocks hit 1-month highs, Treasury yields traded on the back foot while S&P 500 futures recorded modest gains.

Gold kept its bullishness above $1500. Crude oil traded close to three-month peaks on trade deal hopes and good US Consumer Spending data.

Cryptocurrencies reversed the recent upsurge. Bitcoin slid below $ 7,200 mark.

Don’t miss this: Math Guide for Forex Trading

27th December 2019
Forex signals – How Do They Work?

Are you going to use Forex signals or not, depends on your personality and trading plan. In case you are an individual with little time, Forex signals offer an alternative to manual trading.

Forex signals behave like a trade alert for the currency market. In Forex, trading signals are used by traders all over the world. They help them to make crucial decisions about trades.

Trading signals in Forex are one of the most valuable tools you can have. Almost all traders prefer to use them because they can profit from proper signals. A trading signal is completely a suggestion of when and how to trade. The information is based on special price analysis. The trading signal is commonly formed by an expert or it is formed by the program which uses multiple technical indicators.

By using trading you will be methodical. All you have to do is to find a trustworthy source that is compatible with your trading strategy.

Find a signal provider able to provide the individual support, and a ‘strike rate’ of previous signals.

The Forex signal has to show you the entry point.

Your entry point shows you the price level at which to open a trade on the forex pair. The signal must show the level which will trigger market activity and it will be your entry point.

Some signal providers will automatically create the order to open a new forex position if the price hits the settled level. That is a great advantage because you don’t need to be in front of your device when the entry point is breached. The other choice is to set a price alert at the entry point level. Then you can manually open a trade when the alert is triggered.

The Forex signal has to show you the exit point.

A good trading signal must provide you with two exit points. It must indicate where to close every position formed as a response to the signal. This means it must show the stop level and the limit level. The limit level is where you could make a profit.

The stop level is important information because it is the point where you have to close the position if your trade is moving unfavorably. That will protect you from taking a loss.

The limit level will show you the point where to close the position if the trade is moving in your benefit. That will secure your profit.

For example, the signal could indicate a short-term price rise will result in a reversal. Well, you would like to pick a profit at the peak of the rise, just before your earnings go reversal.

Stop and limit levels are an essential component of your trading plan. That’s why the good trading forex signal must have the exact information about them.

Forex Signals can be placed into three groups:

News trading signals
Technical signals
Real-time trading ideas – Webinars

The first one in the list is the fundamental approach to Forex signals. This signal aims to get the news release as quickly as possible and provide a trader to gain the maximum level of profit in a short time.

Forex signals often come with daily or weekly commentary and analysis.

Technical trading signals are simply trading tips on the basis of technical analysis.

That means you trust the experience and follow the record of the signal provider. You are sure it is the best Forex signals service. You may prefer to trade on this data rather than to open trade on your senses.

Technicals are usually given along with various risk management strategies. The purpose is to guarantee minimum losses if the plan does not act as it was originally supposed.

Most online Forex signals have this feature. So, searching for the best Forex trading signal provider can be a much harder and longer task.

General knowledge of Forex signals may help you in finding the best Forex trading signals provider.

Forex signals can be received from many firms that have this service.

Also, you can get them from top Forex brokers. They provide them with other traders. Forex signal is an impulse for entering a trade on a currency pair, typically at a specific price and time.

The signal is produced either by a human expert or an automatic Forex robot.

They must be timely. So you will need some very fast communication. You will receive the signals via email, website, SMS, RSS, tweet or other comparably quick methods. And you can find a lot of them for free.

To find the best for you, try to search: best free forex trading signals, free forex signals live, live forex signals no registration, free forex signals providers, free forex signals online in real-time, free forex signals software, etc.

Services that you get by signing up usually vary from provider to provider.

You can receive almost anything from performance trackers, email, or SMS alerts, customer support via email or phone and, of course, advanced analysis.

Forex signal providers must protect their strategies. That’s why trading with them always means full trust, to some degree. More about this you can find HERE

18th December 2019
Math Guide for Forex Trading

Behind Forex trading lies simple mathematical operations easy to learn.

Okay, math has never been your excellent skill but this math guide for Forex trading will make you clear. The truth is that you are afraid of math and this will help you.

Anyway, let’s see how simple it can be. There are some mathematical formulas that every trader has to know if he wants to be successful in the Forex market.
These math concepts are very simple and easy to learn even if you think that math is difficult.

Change in currency pairs value is estimated in pips. The minimum pip you can see is the fourth digit after the decimal place. The exception to this rule is Yen pairs. The minimum pip there you can see in the second digit after the decimal place.

Let’s use the hypothetical values in this math guide for Forex trading

For example, if the EUR/USD currency pair increases from 1.2530 to 1.32560. It is an increase of 30 pips for this currency pair. In Yen pairs, if the USD/JPY pair rises from 85.20 to 85.40, that is an increase of 20 pips for this pair.

The value of a pip is different for different currency pairs.

Let’s use the forex math formula to calculate the pip value of a currency pair:

Value of a pip is calculated

1 pip/exchange rate x trade size

We are going to use the EUR/USD currency pair with imaginary values.

One Pip = 0.0001
Base Currency: EUR
Exchange Rate: 1.3500
Trade Size: 1 lot meaning 100,000 units of currency
Pip Value = 0.0001 / 1.3500 x 100,000 = 7,407 EUR

How it works on the example on the USD/JPY currency pair

One Pip = 0.01
Base Currency: USD
Exchange Rate: 85.50
Trade Size: 100,000 units of currency which is 1 lot
Pip Value = 0.01 / 85.50 x 100,000 = 11.468 USD

Or let’s see this example GBP/CHF

One Pip = 0.0001
Base Currency: GBP
Exchange Rate: 1.3840
Trade Size: 100,000 ( 1 lot)
Pip Value = 0.0001 / 1.3840 x 100,000 = 7.22 GBP

Let’s talk about probability and numbers to see what lies behind the successful forex trading. Let’s find if a math talent necessary for good trading. We are focused on short-term forex strategies.

So, this math guide for Forex trading led us to the margin and leverage.

In Forex trading, leverage provides you to control a larger position. You will use a smaller part of your own funds and the rest you will borrow from your broker.
Margin is the deposit demanded by your broker. He or she will ask you for a margin/deposit to allow you to open a position.
Leverage is calculated by math formula:

Trade Size/Account Size = Leverage

In this math guide for Forex, here is a realistic example to illustrate this.

For example, you want to enter the position with a value of $200,000. But you have $ 4,000 on your trading account. Your goal is to control $200,000 with the $4,000 you actually have.

$200,000/$2,000 = 50

Your leverage in our example is expressed as 50:1.

What will happen if you instead of $4,000 have $10,000?

You will control $200,000 with the $10,000.

$200,000/$10,000 = 20

Your average will be 20:1.

Brokers can offer from 50:1 leverage for forex trading up to 500:1. But think twice before you accept any offer. It is true that leverage may increase returns but also increase losses.

Position Sizing

This is one of the most serious and frequent estimations that you have to make if you want to be a forex trader. Actually, before you decide to enter any trade, you have to calculate the position size.

We suggest you use one of the simplest calculations. It is a fixed fractional calculation strategy. The best is to risk 1-2% per trade, 1% is better and here is why. Take it as the rule for the fixed fractional risk.

So, you have to decide how much you can afford to risk a per-trade. When you make this decision you have to decide where to place the stop-loss.

Take a look where the most current swings are. Find support and resistance points. When you settle a level where you want to place stop-loss, you have to measure the distance in pips between this level and the entry you plan. Write down that number.

Then, discover the value of each pip. And you can calculate your position size.

Math is in this formula.

current account size x risk per trade/distance between entry and stop x value of the pip

Let’s say your current account size is $20,000 and the fixed fractional risk per trade is 2%. The distance between entry and stop is 100 pips

And the value of each pip is $20

$ 20,000 x 0,2 / 100 x 20 = 0.80 lots

This is just an example and you will find different situations but the principle is the same.

13th December 2019
Sterling is good, the US dollar is trading almost flat

EUR/USD is by far the most important and liquid pair

The dollar index closed yesterday’s trading session in the red zone. The Fed cut its main interest rate range by 25 basis points. The central banks of Canada and Japan held the essential marks of monetary policy at the same level. The release of important economic reports is expected.

Sterling stays good this week and it is possible to have another run at 1.3000 against the US dollar.

The EUR/USD pair is sitting moderately higher on the day at around 1.1160 levels. It is similar to where it was traded on Thursday during the European morning.

Prev Open: 1.11528
Open: 1.11517
Day’s range: 1.11487 – 1.11688
52 wk range: 1.0884 – 1.1623

While buyers are looking to place more upside control with near-term resistance, closer to 1.1179, the important level to look out for will be the 200-day MA 1.1196 and also the offers holding near 1.1200.

Traders are currently 51% net-short GBPUSD.

But wait for the US jobs report later at 1230 GMT.

Buyers are keeping near-term control since the FOMC meeting concluded but unless they can break the resistance levels above, sellers will look to drive the price back lower in the future sessions.

For now, large expiries are seen resting at 1.1150 and 1.1200 so that may factor into keeping the price within a more stingy range before they roll off later today.

The dollar was lower this morning but now losses are seen.

Sterling is good, majors have stabilized. Investors are waiting to see the publication of the US labor market report for October. That could have an important influence on the rate of adjustment of the Fed’s monetary policy. Current economic statements from the United States have been combined. Experts expect a decline in key indicators of the labor market. Presently, the local support and resistance levels on the EUR/USD currency pair are 1.11400 and 1.11750. We suggest opening positions from these marks.

1st November 2019
The Truth About Forex Trading

4 min read

(Updated November 2021)

Traders-Paradise got (and still get) a lot of emails with the questions: What is the truth about Forex trading? or Can you tell me the truth about Forex? or Tell me, please, is Forex profitable or it is a myth?

Okay, people, it’s time to tell you things that nobody will ever tell in one place.

First of all, the vast websites you visited searching for the answer to the question above, are sites with some Forex offers. Doesn’t matter if it is a brokerage, exchanges, system, signal providers, strategies, platforms. They all have one common interest: to present you only THE BEST. Their goal is to sell you their products. There is nothing bad in their goals and intentions, but you must be aware that some things will always stay covered and hidden from you. Until you build your own experiences.

We are giving you the shortcuts because all of us were struggling while we were novices in Forex trading. Actually, our struggle begins before we enter the Forex trading. Just thinking, measuring, asking, searching is struggle itself. And, still, you will find several sites or people ready to tell you the truth about Forex trading. Just because there are some characteristics to trading that the majority will never like to talk about.

And yes, those features of Forex trading are ugly. Some are evil and scary. But Traders-Paradise’s opinion is that we have to talk about everything, doesn’t matter if it is nice and affirmative or ugly and not-so-nice subjects.

We will share what we know to answer you what is the truth about Forex trading.

Just to give you a clear path to decide if Forex trading is for you or not. The benefits you already know, you can make a fortune trading Forex but we want to show you the other side of the same medal. One thing you must keep in your mind: none of us is going to tell you to give up.

Based on our personal experiences, the most common misconception is that you have to be some math geek if you want to trade Forex. Yes, it is beneficial if you can understand the math behind your trades but you don’t need to be genius for that. This has to be said, a lot of very successful traders never even started high education. Have you ever heard about some Forex trading college or university? Of course not. Because if you want to be a successful Forex trader you must have particular skills. You don’t need a diploma. Speaking about those skills, for the profitable Forex trader is more useful to be a strong personality, not to get panicked when trades go in an unexpected direction. If you are nervous and without self-confidence, then Forex trading isn’t for you.

Yes, numerous and complex trading strategies are out there.

And indicators, charts. OMG, Forex is for Nikola Tesla, not for me!

Just stay calm! The ability of self-control is more important. Forex markets are endless tension. Your nerves are what is really in a count, not your math knowledge.

Traders-Paradise will reveal you a secret. The winning traders very often practice one trading system. They learned that system, tested it on some demo account for several months, started the real Forex trades and VOILA! Their result is verified, the system is working, they have profit, so why change anything?

The other thing we would like to share with you is the fact that in Forex trading your entry and exit points are irrelevant. Sound like a blasphemy, right? Imagine us, we are laughing! Because it is the truth about Forex trading. How the mentioned points are important if you can place your trade while sitting in a restaurant with your friends or walking. All you have to do is to take your phone in your hand and start to trade, whenever you want. Sound crazy?

Wait, there are more!

We have heard so many times that humans generally are not good at trading.

The truth is that some are better.

Being a successful trader doesn’t mean that someone is naturally predisposed for that. That isn’t something the mother will give you with a birth.

What you have to do is to start thinking that you have to fight with the market. Just like in flight or fight situation. Imagine that the market wants to still all the money you placed there.

What does your brain tell you? Flight!

No, never if the Forex trading is for you. Your brain should command you – FIGHT! While you are sitting in front of your computer, you have to be the fighter. Or you will gain the loss. Whoever loses a profit, gets a loss. (That is wise, we should spread this sentence all over the world.)

When we are pushing the buttons to place our trades, actually we are pulling the triggers. On our brain’s command. And here is the trick. Our brains will send us variously commands. That’s why you must have a plan. It is a battlefield, you cannot just run around and shoot. That’s when you are afraid or you are disoriented.

To have winning trades you must have a logical plan while trading Forex. If you don’t, you are 100% losers.

One of the biggest lies about Forex trading is that some traders keep 100% successful trades.

No one can ever guarantee 100% success rate, no person and no algorithmic application

This truth about Forex trading you will find nowhere else:

Do you know how some brokers or signal providers, or strategy sellers want you to believe that they have a magic weapon for the markets? That’s a lie. They are lying to you. Trading isn’t so easy.

It may take years until you be able to gain a permanent profit from trading. Our aim is not to frighten you, but this is the truth. You will need months and years of analysis, testing and error corrections to be professional traders.

The biggest truth about Forex trading is that you don’t need superior software or multiple trading screen setups to be a prosperous trader. This is something that no one will tell you. Especially trading websites. All you need is a device with full access to some free charting app.

Remember, the most powerful tool in your trading armory is your brain, not trading software. Some very simple and cheap but user-friendly software can provide you more benefits than a robust one. Remember this.

Traders-Paradise revealed you the most hidden secrets about Forex trading and told you the whole truth and nothing but the truth.

Happy trading from Traders-Paradise Team!

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19th August 2019
Tom next what is it – explanation with examples

3 min read

by Gorica Gligorijevic

Tom next is a short-term transaction in foreign exchange when you buy and sell currency together over two separate days. Actually, it is a business day we are talking about. One day is tomorrow in the sense of one business day. The following day in sense of two business days from today is known as the spot date.

The main aim of this transaction is the traders and investors keep their position and are not forced to exercise real delivery.

So, suppose you already know that in the Forex market, each transaction carries an attached value date. That is the date when buying or selling activities will hit their value. The value date happens 2 business days after the transaction is executed. The profit or loss generated by the buying and selling is settled into a particular account.

To be more clear, when you take a position in a currency it is expected that you will deliver the currency in two days. But, a lot of Forex traders are gambling and don’t even think of taking delivery on the currency.

That is the point where tom next comes to the scene.

If you open and close a position in the same business day, the value dates will be identical for every transaction. Your positions will not be carried over into the next day. Your payment has already been accomplished and will complete on the same value date.

In currency trade, delivery happens two days after the date of the transaction. Tom next trade occurs because the majority of currency traders want their positions to be rolled-over daily. Their goal is not taking delivery.

The purpose of tom next is to restrict traders from having to take delivery of currency and keep their forex positions open to the next day.

Like stocks, forex trades end when the trader takes delivery of the asset. In forex, the delivery day is two days after any transaction. That is the spot date, but tom-next can be applied to prolong the trade after this date. So, the position will be extended by using tom next and you’ll be able to swap any overnight positions for an equal contract that begins the next day. The difference between these two arrangements is the tom next adjustment rate.

So, this simultaneous transaction is a Forex swap.

Depending on what currency you hold, you’ll be charged or earn a premium. If you are holding high yielding currencies you will roll it over at a more pleasant rate (minimum is the best) because of the interest rate differential. This differential is the cost of “carry”.

For example, if two currencies have the same interest rates, they will be swapped at an identical rate.

If you choose not to roll over your position you will be forced to take delivery of that currency. Well, this is unusual, so the tom next transaction is basically the prolongation of your position.

The policy of rolling a position over is more valuable in commodities trading. If it is not finished, you will be left with the delivery of the underlying assets.

How does it work?

Your broker will swap or rollover your position for a new deal that starts the next day. The final result is an adjustment, higher or under, to the opening price for your position on the next day. You will see a tiny difference in the opening price from one day to another day.

Your broker will debit or credit your trading account depending on the change in interest rate. Let’s say you are long with a currency with a higher interest rate.

What your broker will do?

Your broker may credit your account with interest payments. However, if you are long with a currency with a lower interest rate, your broker will pay interest payments from your account.

A tom next will not be applied if you close the position the same day before 17:00 EST. How? There is no overnight delivery involved.

How do you calculate tom next?

The calculation is based on the closing level of the former position, and the change in interest. Swap points plus any interest on your unrealized profit or loss will produce the change on your account.

Rollovers that appear on Wednesday will have an added two days worth of interest. You know, for the weekends the banks are not working, so the broker will automatically credit or debit your account.

Tom next example

For example, you are long USD/EUR at rollover and the average entry price is 120.00. In this case, you select to hold your position. Let’s say, just for the purpose of this example, the quote for the tom next swap points received from the bank is 0.025 – 0.012.

What will happen? Do you remember, this is a simultaneous transaction?

A rollover, your broker will sell and buy USD, and at the same time buy and sell EUR. The final result is that you get a bid rate of 0.012 in your favor. The average price of your position will diminish by the number of Tom-next swap points.

The adjusted price of your position will be

120.00-0.012 =119.988

Tom next adjustment is used to calculating the overnight funding charge on your trading position. You have to pay it if you want to keep your trade open for more than one business day.

The rates can be changed on a daily basis because they are based on the underlying market price.

If you want to buy a currency with a higher interest rate, you will get an interest payment. Hence, if you choose to buy a currency with a lower interest rate, you will pay interest. This payment is known as the cost of carry.

You might also like:

>>> Best Trading Strategy Without Indicators In Forex

>>> How to Use Technical Indicators to Analyze Stocks?

>>> MACD Indicator – Moving Average Convergence Divergence

>>> Indicator Trading And How To Use It

>>> P/E Ratio An Quick Method to Value a Stock

18th August 2019
How well are you doing?

5 min read

by Hans Stam – Trader, Mentor, Author

Impressive

In my journey as a Forex Trader, I come across many different ways of thinking.

Some really think they are the only ones that are right, and everyone else is wrong.

Some contact me and tell me my claims are false or I do them on hindsight trading.

When I show my live accounts where they can see live trading and history, I’m usually getting a response like… Impressive.

Others I never hear from again.

It’s really our loss if we let ego dominate our thoughts.

Always keep an open mind as there might just be something to learn.

Spreadsheets

When you are trading, we like to succeed at a given goal.

One thing that happens a lot is that traders see a certain return, and start calculating.

Some make a spreadsheet and calculate their returns as being static.

Then on their spreadsheet, you can see they are 5-10 years ahead and often millionaires.

Unfortunately, it doesn’t work like that in real life.

Long term goals are good once you have reached short term goals.

What is realistic and doable for you?!

Algorithms

Now that you are all set up, you probably have developed your style of trading.

It’s normal to want an outside opinion on your trading so some sign up for a company that has algorithms running.

But be aware, you might do perfectly in one group and totally fail in another.

How is that possible?!

Algorithms are being programmed by the opinion of the Programmer/Company.

There’s a lot of difference on where their focus is and their results on your trading might be way off.

I have had discussions with some of them, and in many cases, they had to agree they did not think of other things after seeing my live trading.

So, in the end, your results are just based on their opinion and how well you agree with them.

Performances

My suggestion would be to trade for a year and keep an eye on your results Quarterly, Six Months and annual returns.

Keep an eye on the DrawDown and Risks you took by exposure to the market.

Goalsetting is a tricky thing to do when Trading.

It might be best to focus on the number of deposits you are willing to make and set it as being a goal regardless of performances.

You are the one that decides what you do and why.

It’s your money on the line so if you keep on losing ask yourself who you are following.

Is this really your plan or someone else’s plan?

Nothing wrong with that, but it has to be your decision as well.

Don’t just pick a trade because someone tells you if you don’t agree!

So… How well are you doing?

No matter what others say, you are the only one that can determine if you are doing well or not.

You have your own algorithm to perform to.

What are your intentions?

Is it you want to deposit $100 every month for a year?

Is it you are focussed on not having a bigger drawdown than 25%?

So my guess is that you are the one that determines how well you are doing.

Did you reach your goals?

What works and what doesn’t?

Probably the profit-taking results will not work as the market is depending on movement, so maybe it’s better to focus on what you can control.

Opinion

When it comes to trading, you are your own boss.

Only your opinion counts as you are the one making the trades.

Now, that does not mean you never listen to anyone.

Weigh the information, see if it makes sense, apply what is useful!

Sometimes I get good ideas presented, and it doesn’t take long before seeing the goal which supports that idea.

The idea itself may be good, but it doesn’t always apply to my goals.

When I would try different outcomes for different goals, it might become mixed up which makes both goals fail.

Some people lose money fast, and they get very frustrated because their opinions were not their own.

When you find yourself losing money because of someone else’s ideas, review and see why you are losing. And see how well are you doing.

I’m lost?!

When you are doing your thing and just came across a new idea, you might want to throw everything overboard and go for this new idea.

You might feel you are lost once that is not working out.

What you could do is demo test this new idea first, but most don’t have the patience because of their excitement.

What you might do when you find yourself in that place is to open a subaccount and usually it is easy to transfer from one account to the other.

Use your idea on the new account if you don’t choose demo first and let your initial strategy run as usual. When this new idea is producing what you want to do, it will grow on its own, but you will always have a backup from where you already are having experiences.

Easy

It’s easy to do well as long as you have a clear target in front of you which you can control.

When you can’t reach your targets, don’t try to catch up, reduce the targets to a smaller target.

If your first targets failed, then catching up is even more difficult.

Adjust to what is doable for you, and keep the goals closeby and short.

If you commit to depositing $500 a month for the next 5 years, you might want to adjust to depositing $400 for the rest of the year and review in December.

Did your circumstances change? Was it easy to do? Do you want to dedicate more?

You might have lost your job, or got a raise? Lot’s of things can happen in between the plans you make.

Keeping your goals close makes you reach them faster, if you fail the goal, reduce the goal to what fits you at that time.

You can do this!

All the best,

Hans Stam
[email protected]

3rd July 2019
Can I start Forex trading with $100?

Forex Education Part 7

5 min read

by Hans Stam Trader, Mentor, Author

Can I start Forex trading with $100?

Forex trading can be started with a small amount, don’t worry. Brokers usually have a minimum deposit to serve the large group of people who want to deposit as little as possible.

That definitely is a huge market for them.

In all fairness, I think the minimum deposit is not helping you.

What it does is make you think you can make a quick profit, and it’s true, sometimes you can.

The other side of that is, you don’t have much buffer to work with, so you could very easily lose your deposit.

Due to the leverage, taking the lowest amount into a trade would be 0,01 LOT also called a mini-LOT by some, and that would already take you down several percentages in Margin Used.

Then you probably are negative right away due to the Spread which varies per Broker.

When your trade goes against you, and you reach a total drawdown of about 50% of your account, some Brokers will close your trade called a Margin Call.

You would not have enough money to sustain your trade.

I’m not saying it’s impossible, but chances are that even though you managed to get your account up to $200,- it would not take you out of the danger zone.

When it does go your way, you are most likely going to take too much risk which can crash your months of hard work and stress in 5 minutes if you take the wrong trade.

What is the alternative?

When people ask me to mentor them, or if I can help grow their small accounts, the answer I have to give is just as frustrating as it is for them.

I can only tell them to keep demo trading where they can’t lose any money.

It would be unethical of me to tell them to pick a trade which I know will not work in the long run.

The best thing people can do is to gain knowledge and experience, read the articles and create a plan on how to come up with a proper account to make a start.

Career

What most do not understand is that once you really want to go for Trading the Forex (Foreign Exchange) market, it is nothing less than becoming a doctor, dentist, bookkeeper or any other occupation.

Forex trading takes dedication, patience, time and money to start that career.

Same goes for Forex Trading, it would be misleading to tell you it’s easy to do while I know how difficult simplicity can be, and often you are your own worst enemy.

You can’t become a doctor overnight, no matter how dedicated you are but you can make a start educating yourself.

Even a mentor can not magically make you a top trader in a few hours as you would still have to come up with a reasonably sized account.

It’s not that mentors do not want you to help you, but they have gone through the same education most others have and also made all the mistakes before which made them smarter over the years.

Often mentors have made all the mistakes unless they too had a mentor guiding them.

How would you feel if you lost $25.000,- in just 15 minutes and accept that as an expensive lesson? Many mentors have been in that position so you can imagine “losing a patient” on the operating table is really something else to deal with.

So if you apply to become a Forex Trader, please understand it would be similar to asking your doctor to help you to become a surgeon. If all you have is a kitchen knife, what is your doctor to do with your request?

So Forex trading is not for me?

Maybe not, maybe it is.

It really depends on who you are.

Some people have a better position in life to start than others.

I was one that had to struggle all the way and although I was set back a lot of times, I just kept learning and investing in my goals.

To me, that meant making a lot of sacrifices and thinking back, that sometimes still hurts.

Perhaps I was better off doing something completely different, but this was my goal and here I am. Who is to say what would have happened if I took another route.

Right now I just feel blessed to be where I am but it really is your choice to make a decision and do whatever it takes to become what you want to be.

People and circumstances may try to keep you away from your goals so it really takes strength to go after your dreams and there’s nothing dreamy about that.

Why would Forex be my choice?

Often I hear stories about why people start trading.

Some have a nice career but want to do something else, others want another income, some need to take care of their families or children, some are selling their business and want to move elsewhere so they need a new income. But not many of them will actually succeed in the short term.

Still, those people will work on becoming a Forex Trader.

My best guess is that those people are really dedicated to making it work, and I am working with some of them to achieve that goal.

I also know those people will be working with me for the years to come, as they will need solutions in all kinds of Market conditions.

What some do is buy a course and then they are on their own, the best they can get is some live Signals or live chatroom, but before they are there already a lot of money has been spent. I think that doesn’t work as they will not grow to a point where they can anticipate the changing Markets themselves.

It takes the experience to do that and a course alone doesn’t provide that.

When it comes down to business, you will have to go with the information you have and make it your own.

Yes, courses can help understand certain things, but in the end, it’s your money on the line and your decisions that determine the outcome.

Misleading in Forex trading

Hopefully, this gave you a little insight.

It’s misleading to accept the image of fast expensive cars and tropical beaches.

Many traders are down to earth people, realistic about the profits, and those that step out of that zone, usually are being smacked into reality within months.

So yes, there is a lot of misleading going on, but you have to be smart enough to skip through the nonsense and make sense of it all.

I will not say you can’t have those things, but it sure is a long way there starting from scratch. It’s not unusual traders are constantly learning during decades of trading.

On the other hand, it really is possible to become a very good Trader and it really comes down to who you are and what you are willing to learn and do.

Success!

So far this sounded sobering but there is, of course, the other side of the medal too.

I know some traders and others related to trading in the supporting sector, who are really hard working smart people willing to help you.

Like this article you’re reading right now at Traders Paradise, it’s all here to help you get smarter.

Many devoted people are willing to support you on your journey and it took them sacrifices to get to this point where they can.

We’re here to your benefit, serving you the best we can, so one day you too will be successful and have changed your life.

We’re not selling you a glamorous picture, but the reality of what it means to be a Trader.

Most traders still have jobs on the side and some really made this their career, and I admire those people no matter where they are on their journey.

A common characteristic is, they will not give up on their goals and the rewards will be worth it eventually for them.

It’s up to you if you will join that group or not but hopefully, this article has given you a fair look at both sides of success.

Sincerely,

Hans Stam

risk disclosure

13th June 2019