Tag: Forex trading

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Forex is the area to focus on

Forex Educational Series – Part 2

6 min read

by Hans Stam, A Forex trader

The terminology of trading Forex

When I first started showing interest in trading, I might have been where you are now, so I will go back a long way to put myself in that place again and try to help you.

The first obvious attempt was going for stock trading and I didn’t have a clue what I was looking at.

After I had done a course on stock trading I soon got stuck on terminology.

Also, I figured out very quickly, stock trading was not for me.

At the end of the course I was getting really good grades, but in real life that didn’t do much for me as I simply did not have the money to buy stocks in masses and get something of real value back. Back then I had to go to the bank and buy stocks, but the commissions were very high and it wasn’t really worth the effort.

The other problem I had was I did not understand the language traders used, so in my writing, I will try to explain every step so you can follow this series with ease.

First, I will try to explain trading to you, before going to set up an account and trading platform, as that is a totally different story.

Options vs Forex

When I figured out stock trading was not for me simply because I did not have the money, I soon found out about trading options.

The big plus of trading options was that you didn’t actually buy the stocks, but you bought a contract to buy these stocks at a certain price.

Think of it as getting an option to buy a house, it simply means the house is being taken off the market for a while because there is a potential buyer.

Now I was able to trade at leverage. Instead of buying 100.000 shares hoping they would go up to sell them again against a profit, I could buy a contract to buy at current price and keep that option for say 3 months, if the price went up I could still buy these shares at the previous price and make an instant profit.

Instead of actually buying and selling these stocks or commodities like oil etc. the put and call options that were being traded.

The contracts were much cheaper than buying the actual stocks or commodities, but the negative to me was that if the stock went against the option, the option was worthless.

Why would anyone buy a contract that would allow them to buy a stock at a higher price than they could at the current price? If that happened, the money to buy the option was gone.

So back to Forex. Again, forex trading is being done using leverage. But this time, although you may lose some of your money, it’s always worth something.

Closing out your position (your trade) will still have some value even if the other currency went down. That’s when I knew, Forex will be the area to focus on.

Bull and Bear Market

You might have seen this before, and you probably have.

Think of the bull of Wall Street, or the phrase bullish or bearish markets.

Maybe it seems irrelevant to write about this, but once you are looking at a chart, it’s good to see of the Pairs go up or down.

When the market is heading upwards, we call that a bullish market. When it’s heading down, it’s called a bearish market.

The way to see this clearly, think of it like a bull that takes you on his horns and throws you up in the air, as where the claw of a bear crashes you down.

Explaining Pairs

In our previous example, I used the pair EUR/USD.

But how about Base and counter currency?

In this example, it’s simple to understand you can buy the Euro against the Dollar.

But what if I want to buy the Dollar against the Euro, I don’t see that pair anywhere?

That’s correct, so instead of buying the Dollar, you will now Sell the Base currency, the Euro.

That also explains the next bit of terminology, Buying the Euro (EUR/USD) now becomes going LONG, and buying the Dollar now becomes going SHORT on the pair EUR/USD.

Simply put, Long is buying, and Short is selling the Euro against the Dollar pair (Where in fact you are buying the Dollar as the counter Currency of the pair)

Analyzing the market

As you may have read in the previous article, there is a difference between trading and gambling.

So what makes the difference? And why are traders not agreeing with each other on where prices will go?

The final judge is the market itself, and sometimes you are right and sometimes you’re wrong.

To make sure you are more right than wrong, you would want to try to analyze what the market is going to do based upon what other people think.

Although, there are analyses of the market, even so, if everyone would disagree with the projections and still went another way, the market as the judge would rule that the price would head towards supply and demand.

Unfortunately, that doesn’t happen often in real life. If you’re interested in reading more about this, Google George Soros and see what he did.

The majority of traders will try to analyze based upon two different types of analyses, Fundamental or Technical.

Knowing that other traders have the same information, they will very likely try to figure out what most others decide to do based on the presented information and go along with the flow.

Fundamental vs Technical in Forex

Fundamental analyses, in a nutshell, are more or less analyzing where the market will go based upon the news and events that happen around the world.

It’s possible the influence of these analyses are very high, high enough to even close the markets temporarily. Think of an event like 9-11 or a war for example.

More common in this type of analyses are reports that are presented publicly like unemployment rates or elections etc.

Whatever the news is, usually this is affecting the market greatly and prices will go up or down rapidly, sometimes in seconds.

Once the move happens, you probably are too late already because of the speed, so many will preset orders in case the market goes up or down fast, others will already have the trade open based upon their expectations of what will happen with certain rates like unemployment.

Technical trading Forex

…is something completely different.

When trading based upon technical indicators, many will look for patterns in all kinds of shapes and sizes.

There are many tools to use, think of moving average price waves based on the last X numbers of price values.
Others are Elliott waves or Fibonacci for example.

Also, support and resistance levels are used a lot. When a price is trying to go upwards, it often happens it will try to break a ceiling, bounce back, and have another attempt to breakthrough. Once that happens often, a resistance level is forming. Other traders will see that too, and will most likely trigger a lot of buying orders once that level is broken which is a self-fulfilling prophecy as it will go up because others will buy in that direction which supports the move.

The support level works the same, the difference here is that it supports the lower side of a move.

So the difference between Gambling and Trading basically is that you can try to analyze what most traders will do and go along with that direction.

If you made it this far, you really seem dedicated to learning! Well done!

When you need mentorship, please contact me by clicking here.

Is there another way?

In short, Yes.

We’ve been over Emotions, we’ve been over Analyses. So basically I need to be a robot?

No, you don’t, you can be a vibrant human being and still get very good results.

In fact, it doesn’t have to be difficult at all, but it does require a bit of money to do it right.

I’ll say it out loud, it will take between $5.000 – $10.000 to get started, so a few hundred doesn’t really get you very far with this option.

If you want to know more about this option, please contact me here and I’ll set it up for you.

What is PIP?

For consumers, the best-known decimal is in cents.

For example, if the rate EUR/USD is 1,12 it means that 1 Euro is worth 1,12 Dollar.

It would be very difficult to trade on that decimal.

So in trading, we add a few numbers behind the comma and start trading in PIPs.

PIP (Price Interest Point) Although some have other versions, it’s the point on the market.

1 PIP equals 1/100 cent on the dollar.

Example:

1.1200 to 1.1300 equals a price change of 100 PIP’s and that equals 1 cen

1.1200 to 1.1201 equals a price change of 1 PIP…

But wait, there are more digits when I’m trading?

Correct…

When you see 1.12000 to 1.12001 that’s 1/10 PIP So we call that a Pipette.

Hopefully, this is a simple way to understand how that works.

Demo Trading

The best way to start learning is to open an account and start demo trading. You can do that by clicking here.

Those account with real live numbers are FREE to use, and most will be temporarily but on request, most brokers will extend the trial period.

It might be overwhelming at first, but the good part is, you can get to learn how it works, and you can see directly if you make or lose money.

By the time you are ready, you can open a live account, and start trading for real.

Be aware, going live is really different!

The main difference is, you can refresh your demo, where on a real account your money is gone when you lose.

I have seen people trade on a demo and all seemed reasonable, but when they switched to a real account their balance went south.

The most common difference I noticed was the demos were being traded without much stress in comparison to live-accounts.

It didn’t really matter if this was about thousands of dollars or a few dollars; the tension was just making traders fail a lot quicker on the live account.

Most common mistakes were taking profits way too early, and experiencing fear of loss which totally ruined their trades.

Although some brokers do have their tricks, it’s usually something you can figure out and workaround, but the human factor makes trading more difficult than you may think for most people.

Many also think it will not affect them until they realize they too are human.

Artificial Intelligence (A.I.)

Many of us are aware of Alexa, Siri, and other A.I. which to a lot of us is very intriguing.

For us Forex Traders this is the future.

If you want to experience A.I. which checks your trading and gives you advice on where to focus, you can try that out for free by clicking here.

What you will need is a Free demo account or set up a live-account by clicking here.

This A.I. does not give you strategies, but it makes you aware of the risks you are taking, and if you are doing well or where you need to improve.

If you are struggling to get a good score, and need to perfect your strategy, wait until upcoming articles where I will explain how to create a strategy of your own.

This is not like the trading robots you may have heard about, as I believe you always will have to keep a close eye on your trading instead of letting whatever robot take your decision from you because to a robot it doesn’t matter if it is blowing your money away or not. And of course, we don’t want that to happen.

We will go through more valuable information coming very soon!

Hopefully, you appreciate the value offered to you on this website, stay tuned!

Best Regards,

Hans Stam

risk disclosure

27th May 2019
Forex – What is it – The Differences and Similarities With Other Tradings

Forex Educational Series

by Hans Stam

As a Forex Trader, I would like to create a series of short explanations about how this market works. What are the pros and cons etc?

My aim is to make this as clear as possible, so you can follow the process step by step.

What is Forex?

Forex (FX) is the abbreviation for Foreign Exchange.

When you travel to another country, you may want to exchange your local currency to the currency of the country you’re traveling to.

At the bank or airport, you can exchange your money into the currency used in the country you are heading.

The exchange office works with an exchange rate, depending on the current value of both currencies of a “pair”.

A Pair is, for example, a euro against a US dollar which would be the EUR/USD pair, where the EUR is the base currency, and the USD the quote or counter currency.

EUR/USD – Base / Counter

At the end of your trip, you like to exchange the remaining funds again, back to your currency.

Again, the exchange rate can be changed as it is constantly changing.

So it could be very possible that you will get more value back compared to when you first exchanged it, or a lot less value.

The excitement of Forex trading

This exchange can make or lose you money, and that is very interesting to investors, especially the part where the trader can make money of course.

Just like stocks, currency can be traded on the Market, and you don’t have to go to an exchange office to do it.

So what makes Forex different from trading stocks?

First of all, you don’t have to find a buyer for the trade you are holding, you can close the trade any time you want and instantly get the current value credited back to your trading account.

The second main difference is, leverage!

For instance, the broker gives the trader a 1:100 Ratio with your broker, which means you can trade 100 times the value you pay for.

An example would be trading the Pair EUR/USD and you would buy 10.000 Euro’s, the broker will then take 100 Euro’s locked in your account while you trade the exchange rate over 10.000 euro.

It’s easy to understand you can make far more profit over 10.000 euro, than over 100 euro.

When the market goes your way

Now, when the market goes your way, and close the trade to take the profit, you get the initial 100 euro credited back into your account. So all that happened was that you win or lose the price difference from where you entered the trade to where you closed the trade over 10.000 euro.

It’s logical that when you take profits over 10.000, you make a high percentage on 100 initial deposit.

This goes both ways, so it can be risky, but the rewards can also be a very nice ROI (Return on Investment)

If you like to find out more about how you can enter this market, please visit my page.

Can you really make a living trading the Forex Market?

That is a question I’m getting a lot, so I will try to give some clarity.

The exact percentage of the people who really make a consistent profit is low.

Some speak of a top 5% and that is going as low as a top 1%.

What most traders will agree on is that the number is low whatever that percentage might be.

So how come many people are still trading this market and how come so many are struggling?

The first answer on to why so many people still have an attraction to this market is that it’s possible to make a lot of money really quick, on the other hand, they can lose it just as fast.

But in the end it is very simple, you either are right in the direction your trade will go, or not.

I will elaborate in later articles some more about market directions, but this is the basis of all trading.

The trader buys or sells at a specific price, hoping the counter currency will have a positive price change for their trade.

Forex isn’t the same as gambling

Some traders are hooked on the possibility of great profits, and you could compare it to Las Vegas Casinos, and it can be very addictive.

So that it the why people keep on trying, it’s like gold fever or putting your money on Black or Red in a Casino.

Second, why are so many people struggling with this fairly simple way of trading?

The biggest reasons are emotions and lack of knowledge which basically makes it like gambling.

The lack of knowledge speaks for itself, but how about emotions?

Many struggling traders have fear of loss and get excited too quickly when they are winning.

It’s usually when people are doubting a strategy they bought or came up with themselves and experience fear of losing.

When they see the trade going against them, they let the trade go really deep, but when the trade finally goes their way, they can’t wait to take the profit and have that excitement produce an adrenaline kick.

The strategies can be altered

Often strategies are altered, without really knowing why, but if they had that strategy a bit different on the last trade, then their loss would have been profitable in their mind, forgetting the trade would probably have been closed well before it matured.

Hindsight trading has been used a lot with this type of trader, and that doesn’t count.

The top percentage of the traders who make a consistent profit have learned to do things differently, and it would be wise for traders to have a mentor who knows where the pitfalls are.

Also, it is typical for this kind of gambling trader to put in a few hundred dollars, while in reality, the minimum should be at least $5.000 just to have a buffer.

Once a trade goes against the direction desired, it will need some breathing space. The bigger the buffer, the longer you can keep the trade open.

Fact is, you will not lose a trade until you take the loss, or when you run out of margin. So part of that is a decision, the other part financial.

If you like to find out more about strategies or have specific questions, please visit my page.

I hope this short explanation has your peaked interest, and it is clear to you how the basics work.

In the next article, I will go deeper into some facets of trading the FX Market and its terminology.

Make sure to bookmark this page, and come back to read more soon.

24th May 2019
Trading Forex at the Weekend Gaps

3 min read

Trading Forex at the weekend gaps is a growing field of investment. Forex weekend trading hours have extended away the traditional trading week.

Forex trading the weekend gaps are becoming popular because of trader’s expecting Sunday’s opening price to return to Friday’s closing price.

There is a mistake that you can’t trade over the weekends.

So, you surely can trade online at the weekend. To be honest, weekend trading in currency, stocks, CFDs, and futures is increasing fast.

Actually, the forex market is opened during the weekend.

How Trading Forex at the weekend gaps is possible if we know that the forex market is working 24/5?

Well, it is decentralized. And technically the forex market is open 24/7. It is true that the majority of dealers close transactions on the weekend. For retail traders close at around 5 p.m. EST on Friday and open around 5 p.m. EST on Sunday.

And we can see a gap during the forex open time only when the price movement is great because of some news.

But gaps are quite obvious in the forex market when the market is closed over weekends.

How does it come?

The market prices are moving over the weekend. You can not stop the currency transaction. For retail traders, the price isn’t the same on Friday when the market closes trades and on a Sunday afternoon when it opens.

If the price is higher on Sunday, we have a gap up. But we will have a gap down if it opens lower than the Friday afternoon price.

Trading Forex at the weekend gaps is very familiar to forex traders. It is a very often use strategy. Why is that?

Well, the Forex market is, in fact, open 24/7. Yes, trading ends on Friday and can be opened on Sunday evening.

But so many things can influence the currency price movement over the weekend. So, when traders are trading at weekend gaps, they are expecting the opening price will hit the closing price.

The gap traders believe that the price will continually fulfill the gap. Really? In fact, it constantly does. But it isn’t feasible always.

That’s why some traders make losses. Some gaps are tradable some are not.

For example, we recognize four varieties of gaps.

Breakaway gap

The breakaway gap regularly rises a new trend.

The price frequently develops out of the consolidation phase. Moves up or down with powerful momentum. What leave behind is the gap.

Some crucial, breaking events may cause movement. That new trend isn’t always tradable. Breakaway gaps happen at the end of the price pattern. They indicate that the new trend is starting.

The breakaway gap

Exhaustion gap

Exhaustion gap occurs close to the end of a price pattern. It indicates a definitive try to reach new highs or lows. Usually, it comes after a sudden move. It has an unnatural rise in volume and then turns strongly. Also, you have to know that it comes after some news or reports. For example, after the earnings announcement. That is the period when trading activity increase. Traders are closing their big positions. That causes an obvious reversal. You can find the exhaustion gaps no matter if it is an up or down trend.

The exhaustion gap

Common gap

It simply represents a space where the price shows a gap.

They are gaps seen on a price chart and they are very common and the most generally traded.

Also, they regularly arrive late Sunday and early Monday market openings.

They are suitable for short-term intra-day trading. You should look for a common gap around Sunday midnight and trade those Forex gaps at that time.

The Common gap

Runaway gap

Runaway gaps mark trend continuing. A runaway gap is fairly one of the most secure ways to trade. Particularly if you combine them with other price tools.

A runaway gap happens when the price is gapping into the course of the trend. When the trend is strong you may see them.
Runaway gaps regularly work inside a trend.

Traders need to recognize the gap before they find the potential increase in price. This means that runaway gaps are traded after the action.

The bottom line

The gaps can give a lot of news about market moving.

Trading at the weekend gaps is risky.

But you can use the information produced by a price gap to develop a complex trading plan. It can be helpful with other trading ideas.

risk disclosure

18th April 2019
Forex Trading – What Are You Really Selling or Buying?

A forex market can be profitable for beginner traders but have to know what exactly they are trading

By Guy Avtalyon

Forex trading is for many people still unclear, many are confused with what they are really selling and buying in the currency market. So, let’s make clear what forex trading is!

The forex market sharpens on the trade of currencies by both large investment banks and individuals all over the world. All trading is done over-the-counter. That adds to the market’s liquidity, enabling trades 24/7. Trading can be done in almost all currencies. However, there is a small group known as the ‘majors’. They are used in most trades. These currencies are the U.S. dollar, the euro, the British pound, the Japanese yen, the Swiss franc, the Canadian dollar, and the Australian dollar.

It is possible to trade many minor currencies also known as ‘exotics’. Such currencies are the Mexican peso (MXN), the Polish zloty (PLN), or the Norwegian krone (NOK). As these currencies are not so often traded the market is less liquid. So the trading spread may be wider.

What is the aim of forex trading

Forex trading is like any other speculation. The point is to buy a currency at one price and sell it later at a higher price. Also, traders van sell a currency at a high price and buy it at later a lower price. The point is to make a profit. Some confusion can occur as the price of one currency is always, of course, determined in another currency.

For instance, the price of one British pound could be measured as, for example, $2. That is in case the exchange rate between GBP and USD is 2 precisely. In forex trading, in this case, the value for the British pound would be expressed as a price of 2.0000 for the forex pair GBP/USD. Currencies are arranged into pairs to show the exchange rate between the two currencies.

In other words, the price of the first currency is expressed in the second currency. The forex market is important because it is the most liquid and largest market. Also, it is about how money is transferred around the world.

A trade is in the forex has two sides.

Someone is buying one currency in the pair, at the same time another person is selling the other. The positions traded in forex are often in excess of 100,000 currency units, but only a fraction of the total position comes from the investor.

Image currency pair. Source: Yahoo Finance

The rest is implemented by a broker, which offers the leverage required to make the trade.

How to make a profit in Forex trading

Traders want to make a profit by betting that a currency’s value will either appreciate or depreciate against the other currency in the pair. For example, suppose that you purchase US$100,000 by selling 70,000 euros. If you do so, you are actually betting that the value of the dollar will increase against the euro. If your bet is correct and the value of the dollar rises, you will make a profit.

But to collect this profit, you will have to close your position. This means, you must sell the US$100,000, in which case you will receive more than 70,000 euros in return. It isn’t required from traders to settle their positions on the delivery date. That usually occurs two business days after the position is opened. Traders can roll over their positions to the next accessible delivery date.

However, if traders take this way, they are left open to incurring a charge that can arise depending on their position and the difference between the interest rates on the two currencies in the pair.

Forex trading spread

It is like any other trading price. The spread for a forex pair consists of a bid price at which you can sell (that is the lower end of the spread) and an offer price at which you can buy (this is the higher end).

When buying, the spread always reflects the price for buying the first currency of the forex pair with the second.

For example, an offer price of 1.4000 for EUR/USD means that it will cost you $1.40 to buy €1. You would buy it if you think that the price of the euro against the dollar is going to rise. Of course, if you think you will later be able to sell your €1 for more than $1.340. That’s your betting.

When you want to sell, the spread provides you the price for selling the first currency for the second.

For example, a bid price of 1.4000 for EUR/USD means that you can sell €1 for $1.40. You would sell if you think that the price of the euro is going to fall against the dollar. Because you want to buy back your €1 for less than the $1.40 you originally paid for it.

How to calculate your profit?

This is just an example, don’t panic, please.

Suppose the spread for EUR/USD is 0.8414-0.8415. If you think the price of the euro is going to rise against the dollar you would buy euros at the offer price of 0.8415 per euro. Say in this case you buy €10,000 at a cost to you of $8415.

The spread for EUR/USD rises to 0.8532-0.8533 and you decide to sell your euros back into dollars at the bid price of 0.8532. The €10,000 you previously bought is now therefore sold for $8532. Your profit on this transaction is $8532 minus the original cost of buying the euros ($8415) which is $117.

Remember, your profit is always determined in the second currency of the forex pair.

Let’s suppose in the first example you believe the price of the euro is going to fall. So you decide to sell €10,000 at the first bid price of 0.8414, for $8414.

In this example, you are right and the spread for EUR/USD falls to 0.8312-0.8313. You decide to buy back your €$10,000 at the offer price of 0.8313, a cost of $8313. The cost of buying back the euros is $111 less than you originally sold the euros for, so this is your profit on the transaction. To repeat, the profit you’ll possibly make is determined in the second currency of the forex pair.

The most common patterns in Forex trading

There are 3: Head & Shoulders pattern, Pin Bar, and Double Top / Bottom

How to use Head & Shoulders pattern?

Head & Shoulders pattern is an easy way to develop trading skills.
The first thing you must know is that Head and Shoulders is a reversal pattern. Meaning, when it’s an uptrend, the price goes up, doing its shoulders and head patterns and then reverse for a downtrend.

Those are somehow easy to locate when using this image to see what we should look for in an actual chart.

In the image below, you can how it looks on a real EUR/USD chart:

How to use the Pin bar pattern?

One of the most important candlestick patterns you should pay close attention to.
If a pin bar appears it means that there is a very high probability that trend may reverse or pullback. The pin bar is often called “Pinocchio” bar, and it looks like this:

How to use a Double Top / Bottom pattern?

Often, if you see a double top like in the following image, it can mean there’s a downtrend on the way.

If you want to go for regulated forex trading, at least start with simulated trading.

However, only do this on a trusted platform because there are many scams on platforms that falsify your trades, They can make you think you are gaining, thereby seducing you to perform the real funds.
Happy Forex trading!

Don’t waste your money.

3rd March 2019
Forex Traders – Why Some Lose Money?

4 min read

by Gorica Gligorijevic

Forex traders are those who use price movement in the Foreign exchange currency market to make the profit. Generally, the fact is that most forex traders lose. About 95% of forex traders lose money and giving up at the end.

But you would like to be among 5% of successful traders.

First of all, Forex trading like any trading is a bunch of psychology.

Do you know the most common traps among failing forex traders?

Do you have what it is necessary to be a winning forex trader?

The purpose of forex trading is to exchange one currency for another in the expectation that the price will change. Like any other trading.

For example, you purchase 10,000 euros at the EUR/USD exchange rate of 1.2000. And one week later you exchange your 10,000 euros back into U.S. dollar at the exchange rate of 1.2500. So, the math says, you earn a profit of $500.

The currency you bought increased in value compared to the one you sold.

The aim of forex trading is simple:

You want to buy a currency at one price and sell it at a higher price in order to make a profit. Or, to sell a currency at one price and buy it at a lower price.

But, at the Forex market, the price of one currency pair can change the value several times in a few minutes.

In periods of intense trading, within one minute, the price may change the value tens or even hundreds times.

But you have to know something, the market is not your rival. You don’t have to conquer it. If you want to be a successful trader, you should define the trend and enjoy the trade.

The market can disturb you.

Especially, if you try to get too much with too small capital.

Having the wrong mindset frequently makes the trade too aggressively. Or if you try to go against trends, you are on your way to disaster.

There are so many reasons for the losses, including bad money management, bad timing, or an unproductive strategy. But there is a deeper reason why most forex traders lose.

Majority of forex traders will lose despite what techniques they apply. Every forex trader knows how to trade famously, but in theory. Because knowing and doing are two very different things.

So, why is that?

We are not going to tell you a story about psychological reasons or fears, greed, and hope. Traders Paradise has a different approach. So, let’s see what we have here.

As first, we have to look at how prices move. We also have to know that there is a considerable number of people who will be there, right when the price is about to change.

This is the moment where mass losses happen.

At the moment when buying insanity grips a market, something that will pass!

Of course, everything passes.

But at this very moment, when you see the other people buying! That makes you think that it is the right time to buy and the other people will buy after you.

Every time you execute a speculative investment, you are doing so because you suppose other people will purchase after you. That push the price up. And you can sell for a profit.

Prices only rise if more people are willing to buy, more than are willing to sell.

Yes, we can do some fancy analysis and make forecasts about the price. But all we are really doing is making a bet that people will buy or sell. It is people that buy and sell and cause prices to move. Those people create repeating patterns, that we can trade-off of, in the markets.

The uptrend is generated by more and more people continuing to move the price up.

There is no other way that price can go up. Behind that, always stand forex traders’ will to pay above first established price.

And what happens then?

There are no more traders who are willing to buy at higher prices.

Moreover, there are more traders willing to sell than to buy. The traders who bought near the peak are left getting the losses.

The main problem is that a considerable number of traders are involved near the top.

For instance, some stock has been rising for 3 years. So, as more traders find out about it they start gathering in. But there is a limited number of traders who are willing to buy it. Once the crowds have accumulated, there is no one else to buy. And the forex traders who bought earlier in the trend start to sell. That can scare the traders who bought late in the trend. So, what we have now? The domino effect starts carrying prices back down.

The best example is Bitcoin.

Bitcoin had been rising regularly between 2016 and 2017. But there was not a lot of interest from the traders. In the middle of 2017, traders became motivated. There was an explosion in interest, bringing a whole new batch of buyers into Bitcoin.

People searching “Bitcoin”. Source: Google

This number ‘100’ on the chart above represents the peak popularity.

So many people Googled “bitcoin”. They were searching for information. They wanted to know more about it. And what happened?

The number of people searching for “bitcoin” matched with the price of bitcoin peaking.

image source Yahoo Finance

A whole batch of people who had never heard of bitcoin became interested in it. They helped fuel the rally. When popularity hit its critical mass, there was no one left to buy.

So, participation was the highest near the top.

The smart investors made money off this buying rage, but the masses who created the buying frenzy lost a lot of money.

You have all on the chart.

The point is, most people get involved close to turning points. That means most people lose. They catalyze for turning the market the other way.

The mass insanity causes that limit to be hit.

There will always be plenty of people who don’t want to get included. Such believe that the price is already too costly. But the market keeps going higher and so a few joins in and buy.

The market won’t hit a highest or reverse by itself.

Forex traders have to make the extreme situation and market will explode. The growth and failure cycles will never end. Great uptrends and downtrends are systemic. You will never find one without the other.

Prosperous Forex traders always find something that works and stick to it. They never let others drag them away from their strategy. Unsuccessful traders here go wrong and that’s why the most of them lose money. For example, traders hear that some asset is doing very good. But after a few days, the same traders can hear that asset is doing very bad. And that news is spread by media, forums, experts.

So, what to do?

To bet against everyone and be wrong?

We believe what we hear most often.

It will cost you if you are not part of the masses. You can’t trade with others. You have to walk carefully and alone. Most people will not accept your view. If you trade contrary to the crowd, and you are right, people will hate you.
Why?

Because you made money while they lost everything. Sound absurd, we know that.

But if you want to be a winning trader, you must stay strong through major market turns when the majority lose.
People prefer submissive company and they will not love you.

When the outlook is most suspicious, because everyone is losing money in the market and you see how bad the markets are, there is a strong motive to sell and follow the crowd.

Once again, the crowd makes a poor decision, which can’t help doing, and the market turns the other way.

Forex traders lose by acting in mass at the same time.

The masses can’t avoid it. It is an energy that exhausts the trend and reverses it.

Even if a long-term chart of the stock market shows the price of stocks rising, you have to know that most of the people are with empty wallets because they were buying near peaks and selling near bottoms.

Social influence

Behind the reason for losing money while taking part in the market, lays social influence too.

Victorious traders find something that works.

So, they stick to it, and not let others remove them away from their adopted strategy. On the other side, we have unsuccessful traders. They go wrong, they stay in the crowd, and the crowd loses money.

Such traders can’t jerk themselves away from the crowd when it is time to do so.

When you hear from the media is how good this asset is doing, or how bad that asset is doing, it’s really hard to take an opposite view. We want to believe what we hear most often.

If you make a bet against everyone else and you are wrong, you will experience regret missing out while others profit.

Do you think this social price for not being among others, sounds funny?

You need to walk carefully because most people will not support your view. Assume you have a contrarian view to the masses, and you are right, ha?

Your friends, not only the opponents, may dislike you because you made money while they lost a lot. Is it still funny?

Gaining traders are often “tortured” during major market turns when the bulk lose.

Just recall one name: Warren Buffett. Who like him? But there are a lot of people admiring him.

We will share some of his genius thoughts:

* Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.
* The best thing I did was to choose the right heroes.
* Price is what you pay. Value is what you get.
* We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.
* A public-opinion poll is no substitute for thought.

Why all these matters?

Everyone wants to trade their own way. But don’t end up being with the crowd that loses money. Your social mood, whether it be optimism, greed, fear, is fueled by the same aspect accepted in society.

There is nothing wrong to be part of the crowd.

But…

Yes, it is quite easy to say “I will follow the crowd and get out before them.” But it is pretty difficult because everyone in the crowd believes the same.

Assume you understand bid and ask prices. Right?

When people start to sell there are only so many shares are each price level.

And if you want to get out you need to sell to a lower bid price, then a lower, and a lower, and lower. Not everyone can get out at a good price.

There is only a few quickest who get out before the real loss is done.
Be one of them.

risk disclosure

27th February 2019
Stop loss hunting – What to do?
3 min read

The truth is, there are players in the market that are hunting your stop loss.

Stop loss orders are designed to limit the amount of money that can be lost on a single trade, by exiting the trade when a specific price is reached.

For example, a trader might buy a stock at $50 expecting it to rise. Trader place a stop loss order at $47. But the price goes against the trader’s expectations and reaches $47. In that case, the stop loss order will be executed, limiting the loss to $3 per share.

All new traders should use a stop loss. The stop loss order is placed when the trader enters a position.

Why is that so important?

Markets are moving very quickly. A stop-loss is employed to limit the possibility of a loss. It also gives the possibility to trader having to get out of the trade if the price goes against him.

Stop loss is a must.

Stop loss position is very important and you should be able to distinguish where to set it. A too tight stop loss can be easily triggered even when you take the right position. And a too wide stop loss is like having no stop loss at all.

Where is the best place to set the stop loss?

You should place the stop loss at the level that will be triggered when your position is totally wrong.

We are referring to stop orders going forward, plain vanilla stop order, opposed to a stop limit order.

For example, the price is going up. You are waiting for some reversal signal. But, the price changes its direction and makes a reversal trade setup. And then starts going down. You take a short position. So the last high that the price has made before it goes down is a resistance level.

But what if you realized that taking a short position has been a wrong decision and the price will keep on going up again?

If the price goes up and breaks above the resistance level, it means you were wrong and the uptrend was not reversed. Therefore, you have to be out. That is why professional traders say: You are either right, or you should be out.
So where should you place the stop loss in this example?

image source: tradingwithrayner.com

A few pips above the last high (resistance level) plus the spread.

When price moves to your preferred direction and you are making the profit, you can move the stop loss further to lock some part of the profit you have made. At least, you can move the stop loss to breakeven, entry price, when you are in a reasonable profit. So, if the market turns around, you will get out with zero loss.

First of all, what is stop loss hunting?

Do you know that forex brokers make money when you take a position? Yes. They charge you some pips when you buy a currency pair. This number of pips that brokers charge when you buy currency pairs is called spread. Brokers offer different spreads for different currency pairs.

But, the spread is not the only way that forex brokers make money. It is one of the ways. They also make money through the swap. Market brokers make money through commission as well. However, the commission is the only legal way of making money for the true ECN/STP brokers. They can make money through other ways, but they are not allowed to.

Short note: STP refers to Straight Through Processing and it is just a name given to dealing desk brokers that have automated the dealing process. Traditionally in the spot forex market, when you place a trade, you are being filled by your forex broker is also known as an RFED.

ECN refers to Electronic Communication Network. ECN can best be described as a bridge linking smaller market participants with its liquidity providers through a FOREX ECN Broker.

However, whatever you pay as the spread goes to the market maker broker pocket. Also, the money you lose is the market maker broker profit. Say that, when you trade Forex through a market maker broker, in fact, you are trading with the broker, not the real currency market.

So it makes sense that the market maker brokers like you to lose.

Your loss is their profit. Similar, it is expected they don’t want you to win because your profit is their loss. Market make brokers make a lot of money. The statistic shows that 99% of the trader lose on their own and nobody needs to push them to lose. However, some market maker brokers get greedier and want to make more money faster.

YOU WOULD LIKE TO READ Automatic Trading – What Is It

Stop loss hunting is one of the ways they use to do that. They have some special robots or train some employees who monitor the clients’ trades.

How does it work?

The trader takes a short position and sets a stop loss. The market goes against the position and becomes so close to the stop loss. And the robot or the stop loss hunter employee increases the spread manually to help the price hit the stop loss earlier.

But, most regulated brokers are not hunting your stop loss because it’s not worth the risk.

The word gets out that some broker hunts their client stops loss. What? It’s a matter of time before clients pull out of their account and join a new broker.

Would you want to risk doing that over a few tiny pips?

We guess not.

Most brokers don’t hunt your stops as the risk is greater than the reward.

But, your broker widens the spread and stops you out of your trade.

There is a reason for this.

A broker widens their spreads during major news release. The market has low liquidity during this period.

YOU WOULD LIKE TO READ Stop Loss Order and How to Use It

Take a look at the depth of the market. The bids and offers are low just before the major news release. The participants in the market are pulling out their orders ahead of the news release.

The liquidity during such period is thin and that results in a wider spread.

Because of this, the spreads in forex is widener. If it isn’t, there will be opportunities for arbitrage.

So, you can see that widening is not there for fun their spread for fun. Your broker is doing it to protect themselves.
Most brokers don’t hunt your stop loss because it’s bad for business.

How to avoid stop loss hunting by setting a proper stop loss

Let’s say, you find such broker.

You can still protect yourself and beat the sharks who are hunting your stops.

What can you do?

Here are 3 techniques you can use:
- Don’t place your stop loss just below Support (or above Resistance)
image source: bpcdn.co
- Don’t place your stop loss at an arbitrary level
- Set your stop loss at a level where it invalidates your trading setup
The bottom line

The one way to stay away from the stop loss hunting is trading through a bank account.

Trading the longer time frames is another way of staying away from stop loss hunting. Well, nothing can 100% prevent a scam broker from cheating the clients. But trading the longer time frames is a good way to lower the risk. On that way, you will have wide stop loss orders that are harder to get hunt unless the broker increases the spread for hundreds of pips.

In general, you will finally have to close your account and leave when you trade with a scam broker that hunts your stop losses and cheats because nothing that fully stops them from cheating you.

Therefore, you’d better choose a good broker from the first day or trade through a bank account.

risk disclosure
4th February 2019
Forex Trading – Simple Tricks to Master it

4 min read

Forex trading could lead to high returns of investment. This article will explain how

Forex trading – the CONCEPT:

Forex represents the foreign exchange/currency market. The word forex itself is made of two English words: foreign and exchange and signifies the purchase of currencies from different countries.

Unlike other stock exchanges, Forex does not have its physical seat in a city. It exists in an electronic network consisting of large financial institutions.

Also unlike other financial assets – Currency needs to be at a balance point!

Why Forex industry has to be at a balance point (UNLIKE STOCKS for example)?

Because let’s think about a country, like the USA. Its currency is USD and you can invest your money on USD comparing, say, Euro. So if the USD is increased (or Euro is decreased) you gain a profit.

But inside the USA – the interests are different.

Forex trading is an industry of importers and industry of exporters.

Let’s say I’m an importer that lives in the USA, and I import apples from Mexico. And just for the explanation, we say that 1USD (US Dollar) = 2 MXN (Mexico’s currency).

Now I make a deal with my fellow Mexican that I buy apples for the worth of 2 million MXN (and it costs me 1 million USD).

Now, if the USD will get stronger, and now we say that 1 USD = 3 MXN.

See? I’m losing money because I could have bought my goods for a lot more money at the same price I spend (1 million Dollars).

But let’s say it’s the opposite – I’m the exporter. My fellow Mexican buy from me apples at the same original deal. This means he buys from me at 2 million MXN and I get 1 million Dollar. But then, the Dollar is rising and now it’s worth 1 USD = 3 MXN. He still buys at 2 million, right? So now those 2 million worth approx. 0.67 million USD. Now I’m LOSING money because of MY OWN currency worth more. That’s Forex. It has to have a balance point because if not we’ll have our own people losing.

Today, Forex is the largest financial market, which has a daily turnover of around $ 5.5 trillion a day. You can complete this whole process online.

The term currency market means the sale of one currency with the simultaneous purchase of the other.

As currency pairs are traded, in order to profit from the shift in the exchange rate, you need to buy the currency that you think will strengthen and sell the other.

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There is no need to wait for a growing market to profit. At any moment, one currency will strengthen in relation to the other.

The Forex market is constantly creating opportunities for investment.

Since nothing concrete and tangible anything is bought and sold, this type of trade can be a little confusing. You should think that you are buying a part of the value of a country.

If you buy a Japanese yen, you are buying a part of the Japanese economy that is in direct correlation with what the market thinks about the current and future health of the Japanese economy.

Generally, the established exchange rate of the two currencies is a ratio that reflects the state of one economy in relation to the state of another economy (the state, the currency).

Forex is opened 24 hours a day, except on weekends, so that Sunday trading starts on Sunday from 21:15 CET and runs until Friday at 23:00 CET. During the day there are several time intervals that coincide with the working hours of the world’s largest stock markets.

Who trades on the FX market?

Forex traders can be classified into two groups, hedgers and speculators.

Hedgers: governments, companies (importers and exporters) and some investors who are exposed to exchange rate changes.

Speculators: This group, which includes banks, funds, corporations, and individuals, creates artificial pressure on the course in order to profit from variations or price movements.

YOU WOULD LIKE TO READ about Algo/Algorithm trading in financial markets

Basic terms of Forex trading

Pip – Represents a change in the ratio of the currency by one decimal. It is the smallest unit change course. Pip is the last decimal in a currency relationship

Stop and Limit – Orders – Often the trader wants to limit the loss in the position he has opened (in that case he sets the “stop” order). Or the trader wants to take profit at a certain level, which is acceptable to him/she (in this case he sets a “limit” order).

Long – Used for the purchase order

Short – Tension used for a sales order

Bid – Bid price

Ask – The price that is claimed

Buy – Shopping

Sell – Sale

Spread – The difference between the sale and purchase price

Chart – Graph

Timeframe – Time period

Leverage – Multiplies the amount of money you invest

Candlestick – Candlesticks show that emotion by visually representing the size of price moves with different colors. Red means the starting price was higher than the closing price at a certain time. Green means it ended higher than the starting point.

How to read candlestick graph: To every time period

Open – The price of an asset at the start of a time period
Close – The price of the same asset at the END of the same time period
High – The highest price the asset reached during that time period
Low – The lowest price the asset reached at the same time
Time period – Can be from 1 minute to one year

What is needed to trade on Forex?

Before you start trading the currency, you need to open an account with a Forex broker. Our recommendation is that before you decide on trading on Forex, open a demo account with one of the brokers.

You can use a trustworthy Forex broker.

So that through the use of the platform, you will be able to monitor market activities and learn more.

YOU WOULD LIKE TO READ about the best Forex trading styles

Conditions for Success Forex trading

You must have a good knowledge of technical and fundamental analysis, as well as managing your account. You should also know the psychological aspect of the trade and that you are disciplined. Also, in Forex trading, you should learn about the country you’re betting on or against.

To be able to trade Forex successfully, there is a whole world of education, really extensive analysis. Also, the countless hours of tracking a very large number of relevant and potentially relevant information.

YOU WOULD LIKE TO READ How To Choose The Best Forex Program

All without any guarantee that the right decision will be made.

So once again, the investment rule has been confirmed: high risk must be taken to achieve high income.

Risk Disclosure (read carefully!)

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether
you can afford to take the high risk of losing your money.

8th January 2019
Forex trading – Thank you internet!

Hello, world! So, each of us would yell when the Internet appeared! And the internet brought us forex. The rest is in this post.

By Guy Avtalyon

Let’s see what is Forex trading. Well, some can say that it is basic stuff and belongs to ancient times. Lucky you, if you are one of them. Opposed to the majority of forex participants, ordinary people don’t know what the ForEx exactly is.

So, let try to explain it. This article is for you who don’t know what Forex is.

A word – the internet. It is crucial. But, it isn’t quite true. In this endeavor, in trying to explain what is a forex, we should start from the beginning. If you have traveled, you probably already have a forex trading experience.

What? When? When you buy the currency of your destination country while paying with your own currency.

That is forex trading. The world of trading.

It is basically about Forex trading: Forex traders buy and sell currencies for profit or to protect investments. The forex market is the world’s largest financial market. And since trading is between market participants, there is no “open” or “close” of the market except on weekends.

Some opportunities present themselves to people who keep up with news and events, while others require patient analysis. You might like trading the major currency pair or even you might have knowledge about the exotic currencies.
Traders create their own power and decisions to their trading and, over time, build their own trading style.

That is one of the advantages of Forex. Even more, you can sit in front of your computer but, at the same time, you are present all over the world. The forex market, or simply the FX market is the most traded on the financial market in the world. Some like to think of the forex market as the “Big Kahuna” of financial markets. The forex market is, from a certain point of view, a crossroad for international capital. The intersection through which global commercial and investment flows must move.

This is the place where all international trade flows. Let’s break down the Forex trading!

What is Forex trading?

It is similar to your vacation pocket money. Forex trading always involves two currencies. The base currency is the one you are buying or selling, and its price is given in the quote currency:

Base currency/Quote currency

EUR/USD

1/1.136512

One Euro costs $1.136512 (the date is December 12, 2018, in my example).

This is the point where trading begins.

Let’s say that you believe the EUR will rise in value relative to the USD. You buy EUR 100,000, paying $136,512 from your trading account. And the EUR indeed rises a great deal, to 1.500000 at the end of the day. Therefore, when you close your position by selling the EUR 100,000, you receive $150,000 earning $13,488. What do you think?

This is impossible? Well, yes and no.

Is possible to earn a lot in Forex trading?

Of course, this kind of price jumping is pretty impossible. But smaller rises are very possible. Maybe not in the case above, but on some other currency. You might ask, where can you get $136,512 n the first place? The answer might be that you have $3,000 in your trading account and your broker enables you to borrow $100 for each US dollars in your account.

That is margin, 100:1. With this margin, you can enter forex positions with values of up to $300,000. But, what happens if the Euros didn’t rise? And instead, it fell to 1.050000 at the end of the day?

Therefore, when you close your position by selling the EUR 100,000, you receive $105,000. Well, you lost $31,512.

How to access to Forex market?

You access this market using a trading platform provided by a broker. Most of the investors can trade Forex with the proprietary platform Advanced Trader or with the popular MetaTrader 4 or 5. Or some other platform, as the broker can develop their own software.

When you have selected your trading platform, familiarize yourself with the available spreads and tools.

You’ll have to find some trustworthy broker that has a free demo account. That enables you to try everything using virtual money. Try the charts and indicators, and explore orders, which are automatic trades based on your expectations, used to open or close positions at predefined price points.

What to pay attention to in the Forex trading?

There is one thing you have to be aware of. We, in Traders Paradise, have some suggestions for you.

Trading Forex can be extremely risky. However, you can take precautions to try to minimize those risks and their impact. In forex, there are three important skills you must develop to help you manage your trading risk. That is: analyzing, anticipating, planning In the first place, you have to protect your account with stops, limits, and other order types.

There are a number of order types, such as the trailing stop, if/then, and order cancels.

Set the proper levels

Some could say that setting a stop is an art and they are probably right. But you need to be sure that your stop is set. So that your trade can handle smaller jumps and drops in price while protecting you from loss if the market doesn’t go your way. A stop that’s too tight could lead you to reenter the market. That could cause you to get stopped out again.

That may cause more damage to your account balance than if you entered a stop that was too wide or if you had no stop at all. You must know how to handle your emotions. Sometimes, your mindset at the time can cause more damage than research you didn’t do.

You are a trader, so try to stay objective and calm. Even if you have a losing trade, resist the urge to enter another trade outside of your trading plan. Never attempt to win your earnings back.

13th December 2018
Profitable Forex Trading By Using Two Approaches

Forex is short for foreign exchange, but the actual asset class we are referring to is currencies.

By Guy Avtalyon

If you want to be a profitable forex trader and have profitable forex trading, you have to follow some rules. You have to either win more often than you lose. The must is to win more on each trade than you lose.

Or better yet; do both.

Doing both is truly the hallmark of a professional trader. It can be very tricky though. As you are a new trader, it is probably best to focus on one approach. See where you can go from there.

I want to show you the ins and outs of each approach and help you decide which method suits you the best.

What is the relationship between the win rate and reward ratio in forex trading?

Before everything, you have to understand the relationship between a trader’s win rate, their reward ratio, and profitability. Assuming a trader risks an average of 10 pips on a trade to make 10 pips of profit. They will need to get 50% of their trades right in order to breakeven. Only if they win more than 50% of their trades, then we can speak about profitable forex trading.

What happens if you risk 10 pips to make 20?

You are trader forex trading with a positive reward ratio and therefore you will not have to win as many trades to breakeven or turn a profit. The opposite is true for a trader who trades with a negative reward ratio e.g. risks 10 pips to make 5. Such a trader will have to win more than 50% of their trades to breakeven and even more to turn a profit. There is an inverse relationship between a trader’s win rate and reward ratio. The larger your reward ratio, the fewer trades you have to win, and the more trades you win, the less you need to win on each trade.

What is profitable forex trading?

Forex trading with a positive reward ratio is a good place to start as a beginner. Why?

Because chances are if you are just starting out, you don’t quite yet have a talent for accurately predicting markets. Say your goal is to make twice as much as you are risking on a winning trade. We have to do some math. If you have such a goal, then your breakeven rate drops all the way down from 50% to 33% and any wins above 33% are pure profit.

If you aim for 3 units of risk (3R) on a profitable trade, your breakeven requirement drops even further to 25%.

This advice is offered by market makers with educational background. This advice is reliable, but what they ignore to tell new traders is that it’s actually harder to make 2 x risk (2R) than it is to make 1 x risk (1R). Anyway, this approach is still a great place to start as a new trader, we just believe in an open and honest approach to forex education.

What is forex trading with a positive win rate?

Trying to score profitability via a positive win rate isn’t the best idea for new traders, because you are not yet experienced enough to get the market right more than half the time. Aiming for one unit of risk in profit has a higher chance of success than aiming for two. The other option is trading with a negative reward ratio, such as aiming for less than a single unit of risk on a profitable trade.

But there is the problem with trading forex with a negative reward ratio: the more your reward ratio drops, the more trades you need to win to turn a profit. If for example, you only aim for half a unit of risk on a winning trade, your breakeven rate rises from 50% all the way up to 66.67%. Then again, there is a higher probability of profitable forex trading and success on trades with negative reward ratios.

Automated systems and forex signals

When looking at automated systems and forex signals, you often see systems that appear great because they are forex trading with extreme negative reward ratios. These systems will risk a hundred pips or more in order to make 5-10 pips. This can work for a long time, but eventually, volatility picks up and the stop losses start getting hit. Every stop-loss that triggers wipes out a bunch of winning trades and you start seeing sharp declines in the system’s equity curve. The characteristic of these systems is win rates above 90%. If you see a system with a win rate that high, look a little deeper. You’ll like to examine how exactly this unbelievable win rate happens.

Currency is known as an “active trader” opportunity. This type of opportunity suits brokers. That means they earn more due to the agility that accompanies active trading but it is also promoted as leveraged trading. Hence it is easier for a forex trader to open an account with a little money than it is required for trading stocks.

How to use forex trading as a hedge

You can use currency trading to hedge your stock portfolio too.

For instance, if some trader builds a stock portfolio in a country where there is potential for the stock to increase in value. But there is a downside risk in terms of the currency. For example, you might own the stock portfolio and short the dollar against another currency such as the Swiss franc or euro.

This means, the portfolio value will increase, and the negative effect of the declining dollar will be neutralized. This is good for those investors outside the U.S. who will eventually repatriate profits back to their own currencies.
With this profile in mind, this suits the best day trading or swing trading.

The other strategy of trading currencies is to understand the fundamentals and long-term benefits.

It is useful to a trader when a currency is trending in a specific direction. That means it offers a positive interest differential. Hence, it provides a return on the investment plus an appreciation in currency value.

This forex trading strategy is a “carry trade.”

Good timing is the essence of profitable trading. In both cases, as in all other trading activities, the trader must know their own personal attributes. In order not to violate good trading habits with bad and impulsive behavior patterns.

7th October 2018
Signal Provider – How To Pick Right One?

Picking the good signal provider can be harder than anyone can imagine. Truly nightmare.

By Guy Avtalyon

A signal provider can help you but also ruin you. Many forex traders use forex signal providers’ services to make money. Traders who struggle to make profitable trades in the forex market can leverage off successful forex traders by using their signals in their trades.

Not every forex signal provider out there is authentic and attempting to make sense of which ones are con artists. And ones which are genuine can be an overwhelming assignment.

Finding the right signal provider is the challenge

Finding a reliable forex signal service can seem like a challenge. There are those signal providers that are professional and transparent.

And unfortunately, there are those providers that do not always have their members’ best interest in mind.

It is up to you. You have to do your due diligence. To be sure that you are working with an honest forex signals provider. The one you can trust and have faith in.

There are several things the trader would consider when are going to pick your signal provider.

A trader should be aware that there are a lot of hardcore scammers in the market. They are working very hard to provide fake, low quality, and substandard forex signals.

Most of these hardcore scammers have no background. Or training in any financial matters. And usually, feed the trader with performance statistics that are imaginary.

But yet convincing to a trader who is not smart enough.

The best way a trader can deal with this problem is by spending at least 5 minutes looking at what other traders are saying about this respective signals provider.

This will help him or her in making an informed and proper judgment.

Another way is by the trader looking at the level of detail contained in the signals provided by the forex signal provider. If he or she realizes that it just entails a few charts with a loss or profitable line, the trader has a reason to think twice before following such signals.

A trader should look for testimonials about various forex signal providers available in the market. A trader should look at what other players in the industry are saying about the available signal providers. This will enable the trader to choose the best provider in terms of accuracy, quality, timeliness, and affordability of the services offered.

What trader should check?

The trader should check the number of TPs the providers have in one trade.

Also, the trader should check how the providers put together the performance statistics.

Check if the providers have a trade by trade statistics.

The bottom line is that any trader who wants to be profitable in the long term should start learning by himself or herself about forex signals through experience and self-training.

If you search for forex signal providers on the web, you will most likely be unable to recognize the sites of scammers from genuine suppliers.

Scammers’ sites are so comparative and competitive.

Sometimes you can feel that clueless forex merchants typically get gotten in the scammer’s site rather than the genuine forex signal supplier. When they understood that the signal is not profiting, it would have been past the point of no return.

The scammers had officially taken the cash and it is past the point where it is possible to do anything.

Signal providers will give you entry and exit signals but remember you have no idea how they came up with the entry and exit points, all you have to do is follow.

With all these promises, you will be tempted to subscribe. That is the moment it will dawn on you that whatever you have subscribed to is a pack of lies.

Forex Signal providers are typically separated into two different groups

It is based on how they generate their trading ideas – technical analysis and fundamental analysts.

Technical Analysts base their trading decisions on chart analysis including support and resistance levels, candlestick patterns, price channels, market structure, or other technical approaches. Many technical analysts have a proprietary method for analyzing the markets. And the highly successful ones have spent many years researching and testing their methodology. All over historical data and in real-time market conditions.

Fundamental Analysts base their trading decisions on economic and news related data. This could be in the form of long-term interest rate analysis, inflation, central bank policy, employment reports, sentiment surveys, and more.

Some are longer-term position traders while many others are shorter-term traders that try to catch volatility spikes after an anticipated news release.

Some traders may think “reliable” means having a high win rate, but that is not really what you primarily want to be looking at.

Actually, win rates are not that important as a metric by itself. You must also analyze the average risk to reward in conjunction with the win rate.

There are strategies with 90% win rates that can lose money and then there are strategies with 30% win rates that can make money.

Another factor to consider is the technology the signal provider is using. Do they have a reliable platform to send out notifications and are there multiple ways for you to receive the alerts? But there is something important also. Do the trading alerts always detail the buy and sell signals, or present stop-loss levels and targets? Or do they only provide superficial information such as entries but no exit details? These are some of the factors you need to consider.

So how can you find out if a provider is reputable and worth your time?

Sign up for a Trial – Sometimes this the best way to get started is by signing up for a forex signals trial. You may get a real sense of the quality of service by diving in and taking a test drive. Many signal providers offer a 1 or 2 week trial for members.

Join their Email List – Another way to find a provider is by joining their email newsletter. You will find the value that they provide for free. So, you can evaluate whether their premium forex signals service will meet your expectations.

Check their Track Record – Every single reputable FX signal provider will implement a performance record detailing their published trades. This is a good way to find their average pip profit per month. Their risk parameters, average win percentage, and other related metrics.

Google them – Yes, simply Google them. Are they mentioned in any important trade publications or articles? What type of social following do they have?

Do everything possible to find with whom you are dealing. Just don’t be one of those naysayers.
Check it, try it, test it, and make your own conclusion.

10th September 2018