Tag: Forex

All forex related articles are found here. Educative, informative and written clearly.

Investing In The Forex Market

How to Forex investing? It isn’t a get-rich-quick scheme but it is full of potential to become wealthy

By Guy Avtalyon

Investing in the Forex market is growing and people from all around the world, especially from, India, are choosing to invest in Foreign Exchange markets, after the regulation of brokers’ work and their massive presence on the market.

In this regard, investing in the Forex market can be a good alternative for all those who want to make a high return on invested money.

Nevertheless, regardless of the many advantages of Forex, many investors are quite skeptical when it comes to investing large amounts of money. The reason lies in numerous myths, rumors, and misinformation that can often be found on the Internet, and they are referring to the Forex market.

In the shortest, it can often be heard or read that the Forex market is a dead end, an ideal place for losing money, a fata morgana in the desert, and so on.

For this reason, investors instead of developing the right trading strategies, are often subject to rumors. Hence, they do not make the right decisions or completely abandon or omit to invest in the Forex market.

On the other hand, there are completely different myths.

There are people who believe or have heard the myth that they can get rich overnight without one day of financial education. So they believe that Forex is the right place for that.

What is investing in the Forex market?

Someone would say, instant win with minimal or almost no investment. But this couldn’t be more wrong. It is true that behind any desire for quick rich is the lack of experience, the uncertainty, and the lack of a properly defined strategy. Success on the Forex market comes slowly, step by step, through education, practice, and only if it is based on realistic expectations.

Often another myth can be heard. The is investing in stock markets is nothing more than a pure game of happiness. This is certainly far from the truth and such myths are the result of a lack of financial education. Forex is not gambling. Anyone who has read something about the Forex market, if they really wanted, could easily understand the mechanisms of price formation on the market.

Here’s one myth more about investing in the Forex market. Money can be earned on Forex, but that means a lot of nights without sleep with a computer in front. And many hours of night trading on a trading platform.

That’s another untruth about investing in the Forex.

Any standardized financial education or course in this area will teach you to invest in a minimum amount of time. Practically, from the computer, you will only read the latest news. Making a strategy and making decisions is not something that is done every hour. It has a longer-term character. Not to mention mid-term and long-term investments, where you can almost neglect any day-to-day operations.

In the case of unforeseen news, whether good or bad, you certainly can make a change in the investment portfolio. But this is not something that happens every hour or every day.

Is Forex worth investing in?

Discipline is the basis of every success and it comes in combination with solid knowledge. It comes with a great role in patience and significant experience.

Successful investing in the Forex market is only a consequence of well-planned and executed trading operations.

That involves taking into account all important economic events, permanent informing, and essential understanding of price graphs.

Finally, for all those who do not have adequate education in this field and recognize Forex as a good place to invest, the first thing they need to do is find the right provider of financial education. They have to choose mentors and plan personal development goals. The mentor is one who will propose to you the appropriate type of training, course, etc. And that one will be your guide through the first practical operations.

The Forex market is a very complex mechanism. The undeniable fact is that it generates various controversies.

However, the main cause of these controversies is ignorance. If you want to take advantage of the opportunities for earning in this field, you must break all the prejudices, myths, and misconceptions surrounding it.

If you are dealing with a trader’s job, you will probably be interested in the so-called “Robo-forex” ie robotic/automated business on the forex market.

How to Forex investing?

In other words, can you actively trade without moving a small finger?
It’s possible but you’ll have to do something. You’re the one who has to give instruction, you’ll have to specify inputs. Then, how is it automated, you may ask?
It’s about a program called “The Forex Expert Advisor” (Forex Expert Advisor) and can be used within the Trading Platform.
This program works independently, although based on the instructions you specify. But it does not require your direct participation in the execution of trade orders or any other market activity.

So, robo-forex executes all tasks independently, meaning automatic.

All you have to do is set the target through an online trading platform that is linked to a broker server. Then the Forex Expert Advisor will start trading according to the given instructions. It is important to note that forex market experts are necessary as advisors especially if you’re a beginner. In this way, you don’t have any responsibility for decision making and, practically, you’ll trade without stress.

What’s more, in that case, you don’t have to be an expert or have a deep knowledge of technical and fundamental analysis. These jobs are contained in the Forex Expert Advisor Add-on – Trading Program.

So, this means that you can practically be away from the computer because your “advisor” will monitor and process all trade signals in case of your absence.
So, it’s possible to invest in Forex and trade this market with a little effort and engagement.

Forex as investment

You have often had the opportunity to hear that investing is not a sprint but a marathon.

This means that if you want to succeed in a tough business such as trade in financial markets, you will have to, among other things, spend a lot of time on it.

To run in the long run, you do not need the 500-euro sneakers. You can run in the old one. The point is that you can start investing in Forex even with a little money but you’ll have to do so in a way that is suitable for you.

The price is not the most important issue when you investing in the Forex market. The most important is to feel comfortable as much as you can. Because it increases the chances that your race will end successfully. So, take advantage of this growing market. And stay tuned, follow Traders-Paradise. You’ll find plenty of valuable suggestions and examples from real investing and trading.

4th January 2019
Trade Crypto And Stocks / Forex – How To Do That
4 min read
- If you understand how the financial markets are structured you can use the same skill and experience to profit in all three.
At first, we have to define the difference between crypto and Forex/Stock trading because you have to have theoretical knowledge.

– Crypto trading, or cryptocurrency trading, is simply the exchange of cryptocurrencies. Like in Forex, you can also buy and sell a cryptocurrency for another, like Bitcoin or altcoin for USD and Euro.

– The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices.

– Stocks trading is the buying and selling of company stock – or derivative products based on company stock – in the hope of making a profit.

Let’s go further!

HOW TO TRADE CRYPTO

Crypto shows bigger growth than stocks or forex. Honestly, all of these types of investment are risky.

While Bitcoin is not the only digital currency on the market, it is indeed the first and most popular one and stands as the digital gold within the industry. The technology behind cryptocurrency holds a large part of its value. The secure way to identify a transaction and the way to transfer funds.

If you want to trade cryptocurrency you need:
1) A cryptocurrency wallet (or two).
2) A cryptocurrency exchange (or two) to trade on.

There are only a few things to know about trading cryptocurrency.

Trading cryptocurrency is simple to start. Yeah, it’s easy.

But there are some essential aspects to understand before you start trading. And this is basic friendly advice to mull over. This not professional investment advice.

I’ll explain on the example of Bitcoin.

There are three ways you can trade Bitcoin:

1 Buy the underlying from an exchange or online cryptocurrency broker

For those who are willing to actively safeguard their Bitcoin, owning the underlying is clearly the way to go.

But prudent steps must be taken to mitigate the risk of Bitcoin theft or loss of private keys.

Diversifying holdings across wallet types, using two-factor authentication and strong passphrases, can be helpful.

2 Trade (buy/sell) a CFD (Contract for Difference) derivative and hold cash margin with an online forex broker or multi-asset broker.

Active traders looking to speculate on Bitcoin over the short or medium term can count that using an online forex broker will provide them with 24-hour trading. And potentially lower margin, and the ability to go either long or short.

So, it is good!

Because of counterparty risk, choosing a broker is just as important as finding one with the best trading tools or commission rates.

3 Buy a publicly listed security related to Bitcoin and hold shares with an online stockbroker.

For stock market investors, investing in Bitcoin indirectly through a listed security such as an ETF, ETP, or trust may be suitable for those looking at taking a passive position.

Active traders might find the limited trading hours and potential lack of volume a limiting factor that could hinder their trading.

Overall, using listed securities that invest, track, or hold Bitcoin can be a viable alternative to diversify away from the risks of margin trading. Or safeguarding private keys when buying the underlying.

HOW TO TRADE FOREX

Forex, also known as foreign exchange, FX or currency trading, is a decentralized global market where all the world’s currencies trade.

You can trade currency based on what you think its value is. Like, for instance, you think a currency will increase in value, you can buy it. But, if you think it will decrease, you can sell it

All forex trades involve two currencies because you’re betting on the value of a currency against another. Think of EUR/USD, the most-traded currency pair in the world.

EUR, the first currency in the pair, is the base, and USD, the second, is the counter.

When you see a price quoted on your platform, that price is how much one euro is worth in US dollars. You always see two prices because one is the buy price and one is the sell.

The difference between the two is the spread. When you click to buy or sell, you are buying or selling the first currency in the pair.

Since the euro is first, and you think it will go up, you buy EUR/USD. If you think the euro will drop in value against the US dollar, you sell EUR/USD.

If prices are quoted to the hundredths of cents, how can you see any return on your investment when you trade forex? Leverage!

When you trade forex you’re borrowing the first currency in the pair to buy or sell the second currency.

To trade with leverage, you simply set aside the required margin for your trade size. If you’re trading 200:1 leverage, for example, you can trade $2,000 in the market while only setting aside $10 in the margin in your trading account.

However, leverage doesn’t just increase your profit potential. It can also increase your losses. If you are new to forex, you should always start trading with lower leverage ratios, until you feel comfortable in the market.

HOW TO TRADE STOCKS

Stock markets are places where buyers and sellers of shares meet and decide on a price to trade.

It is important to know that the corporations listed on stock markets do not buy and sell their own shares on a regular basis. When you buy a share of stock on the stock market, you are not buying it from the company, you are buying it from some other existing shareholder.

There are many stock exchanges, many of which are linked together electronically which means markets are more efficient.

The prices of shares on a stock market can be set in a number of ways, but most the most common way is through an auction process where buyers and sellers place bids and offer to buy or sell.

A bid is a price at which somebody wishes to buy, and an offer (or ask) is the price at which somebody wishes to sell. When the bid and ask coincide, a trade is made.

If there are many buyers and sellers at sequentially higher and lower prices, the market is said to have good depth.

Stocks are quoted by their ticker symbol, represented by between one and four capital letters. They are often loosely representative of the company name.

Let’s break down what is the market order!

A market order is simply an order that instructs the broker to buy or sell shares at the best available price. The market order does not guarantee the price you will get. But it does guarantee that you will get the number of shares that you want.

When an order is completed, it is said to be filled.

Stop orders are contingent on a certain price level being attained to activate the trade and your trade will be executed only when what you want to buy or sell reaches a particular price.

If you understand how the financial markets are structured you can use the same skill and experience to profit in all three.

In all three you have to buy low and sell high against the crowd.

There is no difference.

Risk Disclosure (read carefully!)
14th December 2018
What is a Trade and how to Trade

To understand what is the trade we must have some historical and economic facts in our minds.

By Guy Avtalyon

What is trade? For some of you, this question may seem like nonsense. But, do we all know what is a trade for sure? So, let me explain this. Trade is a basic economic concept that involves the buying and selling of goods and services. Trading points to the buying and selling of securities, for example, buying and selling stock.
Answer to this question could be: Trade is a transfer of goods or services in return for money, services or goods. In other words, trade refers to give and take. In the old days, trade took place with the exchange of goods without the exchange of money. With the invention of money, the trade appeared as an exchange of things for money.

Trade is buying and selling on stock market transactions with the help of stock market brokerage houses. To trade in capital markets, one has to learn technical analysis first. Then apply those learned technical analysis concepts through paper-trading for a few weeks then open a trading account thru a broker and slow start the first real trade.

Everybody knows what the term “trade” means. We are trading in our everyday life, while we may not even register that we have done so. Basically, everything we buy in a market is trading money for the goods we need.

So, what is the trade?

The word “trade” simply means “exchange one thing for another”. We normally get this to be the changing of goods for money or in other words, simply buying something. The same principle is applied when we trade in the financial markets. Let’s say someone trades shares. What traders and investors are really doing is buying shares of some companies. When the value of the shares rises, they will make money if sell them at a higher price. This is trade. You buy something for one price and sell it again for another, hence making a profit or loss.

Why traders trade

Every single trader is buying the shares in the hope that the price will rise. But why would the value of the shares go up? The answer is simple: the value changes due to supply and demand, meaning the more demand there is for something, the more people are willing to pay for it.

Trade is conducted not only for the sake of earning a profit; it also provides service to the consumers. Trade is an important social activity because society needs an uninterrupted supply of goods forever increasing and ever-changing but never-ending human wants. Trade exists from the beginning of human life and will obviously last as long as human life exists on the globe. It enhances the standard of living of consumers. Thus we can say, answering the question of what is the trade, that trade is a very important social activity.

The examples of what is a trade

Trade is when two parties agree on the price of a financial instrument but they perceive it’s valued differently.

For example, say, trader A wants to buy stock with the current market price of $800. So, when trader A buys a stock at $800 there is a seller trader B at the same price. Hence, both of them have an agreement at the price of $800. But the buyer, trader A values is higher than the seller, trader B at that point.

Let’s say that suddenly the owner of another stock comes into the market and has even more stocks to sell. The supply of stocks has now increased dramatically. Now, it’s reasonable to expect the second trader will want to sell that stock at a lower price than the first one to attract the other traders to buy that stock. And such will be right. The other traders would reasonably want to buy at the lower price, why not. Let’s see what happened with the first trader. The first trader will lower the stock price also.
Can you see how the sudden increase in supply has brought the price of the stocks down?
When the asset’s price at which demand matches supply is known as the “market price”. In other words, that is the price at which traders agree on both sides, sellers and buyers both.
Trade is executed with the payment of money, the transaction of goods and services, or virtual currency.

What is the trade of virtual currencies

Those who want to trade cryptocurrency should start by picking a company with a good status that gives an exchange and wallet. The beginners should start by trading leading coins. Currently, we are referring to coins like Bitcoin (BTC) and Ethereum (ETH). In the future, this could change.

Cryptocurrencies are still new to some people, so trading in this novelty can certainly generate good outcomes. But it is important that you know very well what any virtual currency gives and know the features of each coin. It is necessary for you to make trading informed decisions, evaluating carefully the risks/benefits of each coin. Using a reputable cryptocurrency exchange platform could support you in order to take the best possible of cryptocurrency trading.

Virtual currencies

Virtual currencies do not expose holders to foreign exchange risks and provide anonymity between trading partners. Some online resellers provide buyers to conduct their transactions using virtual currencies. If you want to trade cryptos you can also find platforms that convert virtual currencies into gift cards. Virtual currencies are often popular with small businesses, because of the lack of processing fees.

Trading cryptocurrency isn’t hard to start, but there are some basic aspects to understand before you start trading with a wallet-exchange.

The main thing to note is that there are countless options for setting up wallets and trading currency.

The bottom line

When we ask what is the trade we should have some historical and economic facts in our minds. The process of economic specialization and trade leads to much higher levels of production of goods and services. It is this process that creates and sustains the markets of the “free market” system. The development of this system brought about the dramatic and revolutionary improvements in living standards that characterize the modern age.
Free and open trade has fired competition, innovation, and economies. It allows individuals and businesses to take advantage of lower prices and increased choice. As a consequence, millions of people all over the world have overcome the restrictions of subsistence farming and severe poverty that defined the lives of most of humankind during history.

14th November 2018
Carry trade and how does it work?

How to capture the difference between the rates

By Guy Avtalyon

In this post, I’m gonna explain what is carry trade, how to trade this strategy, how to use it in Forex trading.

Niels Bohr, the famous Danish physicist, once joked that “prediction is very difficult, especially about the future.” No words could better express the difficulties associated with exchange rate forecasting. As anyone involved in the business of currency forecasting can attest, it can be a humbling experience.

‘Having endeavored to forecast exchange rates for more than half a century, I have understandably developed significant humility about my ability in this area.’ said Alan Greenspan, former U.S. Federal Reserve chairman. Some may think writing about the fortunes of the stock market is tricky, but try to observe currencies. That’s the challenge.

What is a carry trade strategy

A carry trade is a trading strategy in which a trader borrows money at a low -interest rate to trade the asset that is possible to generate a higher return. This strategy is very popular in forex trading.
This strategy counts on relative stability in asset prices. You know how an unfavorable exchange rate movement can easily wipe out the returns from the difference in the underlying interest rate.

This motivates some people to describe the carry trade as similar to picking up pennies in front of a fast-moving car.

What is the goal of the carry trade

The goal of this strategy is to make a profit from the interest rate differential. Sometimes that difference can be large. So adding leverage can literally tremendously multiply profits.

In currency trading, a carry trade is a strategy in which a low-yielding currency (one with a low-interest rate) is sold. And the funds raised are using to purchase a high-yielding currency. The purpose of this type of trade is to profit on the interest rate differential of the two currencies. In this strategy, traders use leverage to dramatically increase the profits earned through the carry trades.

Up to 2007 many traders borrowed in Japanese yen or Swiss francs. They were actually taking advantage of very low-interest rates in Japan and Switzerland and used the borrowed money to take long positions in other currencies that were backed by high-interest rates. For example, the Australian and New Zealand dollars and South African Rand were that currencies.

BTW, Japan has kept low-interest rates for quite a long time now. Australia and New Zealand have one of the highest interest rates in the developed world! In 2011 interest rates in Australia were as high as 4.5 percent!

Economists theories

Economists have developed a wide range of theories to explain how exchange rates are determined. Most studies conclude that for short- and medium-term horizons, up to perhaps a few years, a random walk characterizes exchange rate movements. But still better than most fundamentals-based exchange rate models. That studies find that models that work well in one period fail in others. They also find that models that work for one set of exchange rates fail to work for others.

A strategy that has attracted a lot of interest among international investors is the so-called foreign exchange (FX) carry trade.

FX carry trades entail going long a basket of high- yielding currencies and simultaneously going short a basket of low-yielding currencies. The empirical evidence suggests that the excess returns on this strategy have been fairly attractive.

Yet, investors need to be mindful that carry trades are prone to crash when market conditions become volatile. Hence, investors need to overlay simple carry trade strategies with well- thought- out risk management systems to help protect against downside risks.

How does a carry trade work in Forex?

Let’s assume that you went long on AUDJPY and kept the position open overnight until the next day. Basically you are buying AUD and selling JPY.

What happens the next day is that your forex broker will either debit or credit you the overnight interest rate differential between the two currencies. This rolling over of your current position is the carry trade.

Say, if the interest rate earned on AUD is 4.00% and JPY is 0.10%. Your profit from the interest rate differential is 3.9% per year! This is considered a positive carry trade. But there is also s negative carry trade. It happens when you, for example, buy JPY and sell AUD. So, you could end up with a negative interest rate differential.

This example is based on 1:1 leverage and assumes exchange rates remain constant for the whole year. Try to imagine applying leverage.

In the example above, if you had the leverage of 100:1, your return would now be 100 x 3.9% = 390% on just the interest rate differential!

When are carry trades successful?

We are still on the example of AUDJPY. If the central bank in Australia were to raise interest rates, then you would make even more gains. Therefore, you have to be mindful of the economic conditions in Australia. If the Reserve Bank of Australia is optimistic about the economy, then they will likely raise rates.

But, if the economy is slow and the RBA believes it needs to lower rates to stimulate the economy, then the AUDJPY as a carry trade would not be that successful. Meanwhile, if the AUDJPY exchange rate moved higher, in addition to higher interest rates, your long position on the pair would gain even more!

What is a Law of one price in a carry trading

The principle of “uncovered interest rate parity” states that the exchange rate of any two currencies should adjust in a way to exclude any chance of making a profit from an interest rate differential.

Furthermore, the Law of One Price states that the real carry cost of an asset should be the same in each country, meaning doesn’t matter from where you’re trading forex.

Carry trades can be greatly tough. Because the FX element of a cross-currency carry trade requires selling the low-interest-rate currency. But also, buying the high-interest-rate currency. In the core of the carry is the intention to make the exchange rate of the low-interest-rate currency fall relative to the other. If carry trades are enough large in volume they can remove any trend for exchange rates to equalize. That is exactly what generates profits in the longer run.

This directs us to believe that carry trades work best when risk aversion is low and investors are willing to invest in high yielding (risk) currencies.

You might be interested to find Leading Stock Exchanges In The World

11th October 2018
Should you trade Forex or stocks?

Choose the instrument to trader based on your strategies, goals, and risk tolerance.

By Guy Avtalyon

The dilemma should you trade Forex or stocks isn’t natural because one trader can trade both. And it could be a smart decision if we consider portfolio diversification. But when people ask this question know exactly what do they want to know.: What has more profits involved? Trading Forex or trading “simple” stocks? Or is it trading options?
Investors and traders have access to a growing number of trading instruments. From tried-and-true blue-chip stocks and industrial to the fast-paced futures and Forex (foreign exchange) markets.

In order to make the best choice, you have to recognize which of these markets are for you.

Forex versus stocks

The most important factor may be the trader’s or investor’s risk tolerance and trading style. As an example, buy-and-hold investors will prefer participating in the stock market. While short-term traders, including swing, day, and scalp trader may prefer markets where price volatility is more present.

For traditional buy-and-hold, “long-only” investors, stocks remain an obvious option for a lot of reasons. Stocks have a long-term history of positive returns. So investors receive income from dividends.

But when it comes to trading, forex trading has a number of advantages to offer. And you should think when deciding whether to trade forex or stocks.

Forex versus Blue Chips

The forex market is the global largest financial market. The forex market has very high liquidity, you can trade around-the-clock, the amount of leverage that is allowed to traders. All these characteristics attract traders to enter the Forex market and start trading.

On the other side are blue chips. Blue chips are stocks from well-established companies, famous brands. These stocks are able to provide profitability even during challenging economic conditions and have a history of paying dividends.

Blue chips are less volatile than many other investments. They are often used to provide steady growth potential to investors’ portfolios.

Differences and similarities of trading Forex and stocks

These similarities or differences could give the final idea to your decision of should you trade forex or stocks. Let’s examine them in detail.

Volatility – Some traders, especially short-term or day traders, favor volatility. It provides them to profit from quick price swings in the market.

The other traders are comfier with less volatile and less risky investments. That’s why short-term traders are attracted to the forex markets. While buy-and-hold investors prefer the security which blue chips provide.

Leverage – The forex market offers significantly higher leverage of up to 50:1, and in some parts of the world even higher. But it isn’t all good as it looks. While higher leverage provides the opportunity to build equity with a very small investment (you can open forex accounts with $100), leverage can just as easily destroy a trading account.

Trading Hours

Another consideration in choosing a should you trade forex or stocks is the time period that each of them is traded.

Trading sessions for stocks have a limitation. It is due to the exchange working hours. Generally 9:30 A.M. to 4 P.M. Eastern Standard Time (EST), Monday through Friday with the exception of market holidays.

The Forex market is active round-the-clock from 5 P.M. EST Sunday, through 5 P.M. EST Friday, opening in Sydney, then traveling around the world.

The flexibility to trade during U.S., Asian and European markets, with good liquidity virtually any time of day, is bonus plus to traders whose schedules would otherwise limit their trading activity.

Tax time

Various trading instruments are treated differently at tax time.

Short-term gains on futures contracts, for example, can be eligible for lower tax rates than short-term gains on stocks.

Furthermore, active traders may be qualified to choose the mark-to-market (MTM) status for IRS purposes. This allows deductions for trading-related expenses, such as platform fees or education.

It is strongly recommended that traders and investors ask the advice of a qualified accountant or some tax specialist. Especially since trading forex can make a complicated time to organize your taxes.

Should you trade forex

The internet and automated trading have opened doors to active traders and investors all over the globe. Anyone can participate since there is an expanding variety of markets.

To be able to make a very important decision about what should you trade stocks, forex, or futures you’ll have to understand your risk tolerance, to take into consideration account size, and convenience. If some active trader is not available during market hours to enter, exit, or properly manage trades, stocks are not the best option.

If some investor’s market strategy is to buy and hold for the long term, generating growth and earning dividends, stocks are a practical choice.

The instrument a trader or investor selects should be based on which is the best fit of strategies, goals, and risk tolerance.

25th September 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
Trade signals – What Is It and How To Use?

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2 min read

Trade signals are simply when someone is making a trade call. Either to buy or sell a security or other asset, generated by analysis.

They show you that it is a good time to buy or sell a particular security.

So if they believe an asset will go higher or lower, they will tell you via some kind of message, email or software. After that, it is up to you to follow or not to follow.

Actually, trading signal is a alert that is based on technical indicators.

Trade signals come in a variety of forms. They can be bull or bear pennants, rectangles, triangles, and wedges, as well as head-and-shoulders chart patterns. Trade signals may also bring attention to abnormal volumes, options activity, and short interest.

There are lots of trade signals

As anyone can make calls, the challenge often is finding one run by an actual trader. These type of services exist in the institutional world as well. They just tend to be a little more accurate than ones you find available to retail traders.

Market Signal is an unintentional or passive passage of information or indication between participants of a market. For example, If a firm issues bonds it indirectly shows that it needs capital and also desires to retain control. Thus instead of equity capita,l it prefers loan capital. It is based on technical indicators. And usually is the sign for when to sell or buy a particular product.

It also brings the attention of users to the other options available, abnormal growth and short-term interests.

Trade signals in volatile markets

Using signals in volatile markets can help to point out opportunities to the investors. Also, they will signal them if they disappear.

There are usually two ways to deliver market signal: send news and activity. The market signal expects to deliver consumer, rivals and outlet member. And the earlier studying of the market signal which is mainly a concentration of signal’s influence.

For instance, it is the price signal where costly products make the customer think it is made of high-quality raw material.

That is a kind of advertisement in which the main aim is to make the customer think that a certain enterprise has more advantage.

Every company doesn’t market in a static environment, the competitor and member of the outlet will make prediction and reaction to enterprises, their decisions process is a dynamic market mechanism.

Trade signals in Forex

In Forex, traders are using trade signals all over the world to aid them in making critical decisions about their trades. They are one of the most important tools a trader has, and almost all traders choose to use them in one way or another.

There are many types of signals systems, some are offered for free while others for a fee but take in mind that a trustworthy service should include information about taking profit and stop loss configurations.

A forex signal is a suggestion for entering a trade on a currency pair, usually at a specific price and time.

Who can generate the trade signal? Human-analyst or an automated Forex robot supply a subscriber of the forex signal service. They are usually sent via email, website, SMS, RSS, tweet.

The majority of signal providers focus on supplying signals based on technical analysis and a minority work on fundamental analysis or price action.

Technical analysis, such as Ichimoku and candlestick charting, show both short and long-term price trends giving the signal provider flexibility in supplying a range of trade options.

The fundamental analysis gives longer-term trade ideas. Price action gives extremely short-term trade ideas, often more suited to scalping.

Trade signal in the stock market

The signal in the stock market is developed by George Lane. It is an indicator that measures the relationship between an issue’s closing price and its price range over a predetermined period of time.

A short note about George Lane (1921 – 2004): He was a securities trader, author, educator, speaker, and technical analyst. He was part of a group of futures traders in Chicago who developed the stochastic oscillator (also known as “Lane’s stochastics”). This is one of the core indicators used today among technical analysts. Lane was also President of Investment Educators Inc. in Watseka, Illinois, where he taught investors and financial professionals basic and advanced technical analysis methods. He popularized the stochastic oscillator.

Stock trading signals

Stock trading signals are simply the implementation of a trading system or method.

The actual signal is given when a traders system determines all criteria necessary for a new buy. Signal are met now and a new buy order can be placed by the trader.

Stock trading signals are most often associated with technical analysis. This is a study of price action and derivatives of price action.

An example of a technical analysis price indicator may be a Moving Average or MACD. Traders can receive stock signals on thousands of trading methods.

Trading stocks can be extremely lucrative when you are able to find trading signals that are proven to be effective. Trusted stocks signals help you predict the market investing in stocks. Doing that with live trading signals sent directly to your device, in the app. With this, you will be able to get live rates on hundreds of different assets.

How does it work?

The software scours social media and accumulates posts, comments, etc that include keywords of interest. All this data is then filtered and crunched to produce interesting statistics. Showing the true public opinion using their words, giving an in-depth insight into public minds.

Risk Disclosure (read carefully!)

9th September 2018
What are the basic types of Forex trading?

Whatever measure, guide, or indicator you are looking for, whatever the time frame, there are 3 basic types of trades.

Guy Avtalyon

In this post, I’ll explain the basic types of Forex trading. What caused this subject?
Regardless of personal experience in trading, conversations, and exchange of views with other traders are valuable. In one of such conversations, the topic was the types of tradings. After many hours and a lot of coffee, we had one conclusion: There are 3 types of trading.

I need your attention for a minute. Let me explain this.

True is, whatever measure, guide, or indicator you are looking for, whatever the time frame, there are only 3 types of trades.

I meet a lot of people thinking they’ve mastered trading. The problem is they didn’t understand the differences between the trades they took.

Sure thing is, it will be easier for you if you know the ultimate goal and what can you expect from the trade you took. And it is possible if you know the type of trade you just implemented. This is very important because your knowledge is what determines where to place your stop loss and your take profit.

When a professional trader enters a trade, he knows exactly what he’s trading.

And my trading friends and me, we can recognize 3 types of trading.

Reversal trade
Breakout trade
Pullback trade

Each of those trades has some special characteristics. I’ll tell you more about each of them. Depending on the market you’re trading, the success of each type of trades may be different.

What are the basic types of Forex trading?

Some traders are attracted to trade all of those types for a limited number of currency pairs. But others are specialized in only one of those trades.

When a professional trader enters some trade, he must know what he is trading.

What is REVERSAL TRADE?

A lot of traders think that implementing Reversal trades is composed of “calling a top” or “calling a bottom”.
However, this isn’t quite true. Actually, the entry price of a reversal trade is often in a previous zone of support or resistance.

Reversal trades are among the most popular basic types of Forex trading because of their ability to be easily spotted. They take place in a ranging market.

As you can see the buyers were very aggressive on the chart above because they pushed the price up all the way to point 1 from an original support zone. But, once the price hit a resistance zone (marked as 1), buyers started to take profit. And several traders began to short the currency pair and got more aggressive.

They took control of the market. This had for the result to create a strong rapid decrease in price.

At point 2, the same result came, which was a good opportunity to enter a Reversal trade. The sellers placed their orders at that level and the buyers began to take profit because they knew the price had reversed in the past at the same level.

The stop loss should be placed above the highest point (A) and the take profit someplace below the resistance zone. It is okay to expect a risk-to-reward of 1:2.

BREAKOUT TRADE is one of the basic types of Forex trading

Breakouts trades are usually made by a strong continuous movement in a direction. Therefore, some traders call it an acceleration because the movement is fast.

This is a typical example of the Breakout trade. Take a look!

The bulls were confident and kept pushing the price higher and higher to point 1. At that price, the sellers became more aggressive and took control of the market until the buyers showed even more power.

The level pointed with a 2 shows a price at which bears are known to get more aggressive in the market. But, they were not aggressive when the price reached that level.

Because there were no traders wanting to sell the currency pair aggressively, more and more traders went long, thus pushing the price higher and breaking through the resistance level.

The stop loss on that trade should be somewhat below the resistance zone that was broken. So, the take profit level is above the zone. It is okay to expect a risk-to-reward of 1:2.

PULLBACK TRADE

Pullback trades are usually more solid because the retracement back to a previous price level represents a certain confirmation.

(Retracement is the temporary reversal in the direction of a stock’s price that goes against the prevailing trend. But remember, a retracement does not signify a change in the larger trend.)

As you can see, a pullback trade is characterized by a retracement, often to the previous support or resistance zone.

Take a look at the chart above!

The price kept ranging between a support and resistance zone. At point 2, no one was aggressive enough to move the price significantly higher or lower. Once the price broke above the resistance zone at point 3, several traders began to feel excited about their profit so far.

Most of them thought that this high price might be a good opportunity to take a profit. But, as more and more people took profit on long trades, the price slowly decreased. When the price got back to the previous resistance zone, some traders began to feel that this price was too low.

The traders then bought the currency pair again (at point 4) to force the price up.

The stop loss on that trade should be somewhat below the resistance zone that was broken. The take profit point should be someplace above the zone. It is okay to expect a risk-to-reward of 1:2.

How to use the basic types of Forex trading

Look at the top of this post.

When a professional trader enters a trade, he knows exactly what he’s trading. But do you know too?

Study your previous trades and recognize the types of trades you were entering. Then ask yourself this simple question:

”Did I make this as well as I could?”

If you get YES as an answer, you are a very good trader. But if your answer is NO this will help you to make progress.

15th August 2018
Can you become a millionaire by trading forex?

(Updated October 2021)

3 min read

Can you become a millionaire through forex trading? Do you know someone who has never dreamed of being a millionaire?

Everyone can see the lives of celebrities and millionaires every single day. Who wouldn’t like the same lifestyle, expensive cars, luxurious houses, swimming pools, parties…

All that desires, all that false matters, false emotions, come from media advertising and TV.

OK, not everything is false. But that causes the other question: can I be a millionaire trading forex?

Yes, you can become a millionaire trading forex.

>> Check out this Become A Millionaire Calculator

But you have to know it is not easy like you see on the internet advertising and TV.

It depends on how much money you start trading.

If you start with $5,000 and make 10% of your capital each month, yes, you will be a millionaire after 5 or 6 years. Just 10% of your capital each month can make you a millionaire.

And if you start with $100K you will be in 2 years. You can’t do that in any other industry.

Tell me, where you can start at $5K and become a millionaire in a few years.

But remember, if your dream is to become indecent rich in a week or a month, forget about the forex. Go far away from forex.

Because you will lose all your money, your car, your house and in the end, your family.

This reality is hidden from you.

Yeah, I know, every broker will tell you tales about doubling your money overnight.

Hm!

True is that they prefer you to lose your money. As soon as possible!

Contrary, if you follow the correct way for a few years they will not see any considerable profit from you. Over the route of several years, you will be the one taking the true profits!

And they don’t like that. This is not in their best interest because 90% of brokers are just market makers and have no relation with the market and banks.

They create a virtual market for you and from time to time let you trade and they make money when you lose.

And they lose when you have winning trades.

Their interest is to make you lose as soon as possible, then they try to motivate you to add more funds to your account and lose your funds more and more.

If you really want to be a millionaire in the forex market forget about making money on the easy and fast way. Such thing like cold cash in the forex market does not exist. You will need time to learn how to trade forex. To learn how to develop a strategy with more than 60% probability to win. You will have to learn about money management. Actually, you should start trading on a demo account.

Trading is art.

People trade to make money in forex but forex trading is not like making money.

You must understand the way of making money with the positions you are opening and the reasons behind it.

That’s why you have to be patient!

Trade for 2 or 3 months on a demo account. If you make success on a demo account, you can open a real account and start real trading.

But, if you don’t have success on a demo account then something is not right. Perhaps your strategy doesn’t respect money management rules. Or something else you are doing wrong.

After you see the mistake you can correct it and after that restart trading on a demo account until you get recurring success.

It is right to say that the Forex market is only for risk takers. It can’t be a permanent source of income but it can be a decent source of income. But only if you get the right guidance through the right adviser or build up your own knowledge to start trading with high precision.

If you are new to trading you can start with the small investment. And you have to keep revising your risk on the higher side to earn more.

This can be the right approach. But the most important is that you should have the right guidance from the best signal provider.

For everyone who asks: Can I become a millionaire through forex trading, there are two answers:

Yes, you can

and

No, you can’t.

Anything is possible in this world.

However, you will be faced with some challenges like finding a good broker that doesn’t cheat on you. Maybe this is the biggest one.

Forex brokers don’t let you grow your account systematically, because your profit is their loss.

And we spoke about this:

Forex is not a get-rich-quick scheme.

Currency trading is not an easy way of making money. It is the same with the stock trading and all the other kinds of trading and investments.

You have to pass some important stages before you become a millionaire.

There are two things that you have to do to become a millionaire forex trader.

First, you have to learn and master the trading skills. And you have to have a suitable amount of capital to invest in the forex market.

No one has never seen one single retail forex trader who has become able to become a millionaire through growing a small account.

There is no profitable currency trader who trades through the retail forex brokers.

You have to have enough capital to trade currencies through a bank account. And your capital has to be suitable enough.

You have to know that.

Of course, if you don’t believe this you can spend time and money on retail forex trading.

Unfortunately, it is not possible to start making money right after learning the forex trading basics and a trading strategy.

To become a pro: PRACTICE to master your trading skills & risk management analytical skills using a free demo account for traders

You have to consider something at first.

It is smart to have a source of income that supports your currency investment. You must have some revenue, that covers your expenses and gives you free time to sit at the computer and learn how to trade.

The lie is that you can make any money through forex trading and any other kinds of trading when you have financial problems.

If you think that you can learn to make money through forex trading within a short time, and become a forex trader who makes millions of dollars, I have to tell you it is not possible at all.

You can find so many false forex millionaires stories over the internet.

Don’t let them deceive you.

If you want to become a millionaire, first you need a good source of income that makes a decent amount of money that not only covers your expenses. But also leaves some money for your trading and investments.

Only then you can start learning how to trade.

You have to learn and practice until you become a profitable trader.

There are two ways to do that.

One way is harder. You have to follow too many trading strategies, robots, and time-frames, and sit at the computer for several hours per day.

This way will hardly take you to your destination.

The simpler and easier way is learning the Forex trading basics.

And then a simple and strong trading strategy.

You have to learn your trading strategy through demo trading. When you achieve success and make profit consistently for 6 consecutive months at least, you are ready to open a small live account and start practicing with it.

If you make a profit for 6 consecutive months with your live account, all you have to do is that you keep on trading with your live account to grow it.

3 of the most common patterns in Forex trading – 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 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 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 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.

Forex trading is an investment opportunity.

It isn’t a full-time job. You should already have an income to become able to invest in the currency market.

Turning a small $5,000 account into a million dollar account is possible theoretically.

It is theoretically possible to turn $5,000 account into a million dollars. But if you want to become a millionaire forex trader you have to have a good backup.

When you become a profitable forex trader, you’ll have enough money to open a professional live forex trading account to trade professionally and earn real wealth.

For example, 1000pip Builder’s automatic trading system aims to target 350pips per month. Usually that should be enough, especially for the new Forex traders.

As you can see, it requires both time and money, commitment and persistence, but ultimately it pays off.

Or you know a different story?

6th August 2018
Entry Trading Strategies That Make It Easier – Forex Trading

2 min read

Entry trading strategies can be very complex but simple too. Forex traders have many activities working against them, and among them, the biggest enemy is – traders themselves. Basic mistakes, lack of planning and weak or ineffective strategies, are the major cause of high forex failure rates.

One of the trader’s mistakes is entry trading strategies complexity.

The best entry strategies are those that are simply designed and simple to perform. The biggest enemy of effective trading is complexity. You should never identify complexity with quality. If you think the more moving parts in a strategy can give you the greater chances of profit, you are totally wrong.

For example, you have an entry signal that has a 10 point checklist to trigger. And you want to apply that in live trading on a minute chart.

What are the chances that you can keep track of all 10 checklist criteria?

If you can’t identify that trade in real time, you will gonna miss it.

And it will cost you money.

What this means is, complex strategies lead you to missed trades.

Your forex entries will be more effective if you keep them simple. Stay stick to this wisdom and you will be able to create a durable forex strategy.

The second enemy in your entry trading strategies can be the timeframe.

Jumping from timeframe to timeframe in order to find the perfect one is not the most effective way. Also, many traders choose the first one that grabs their attention – wrong too. Forex time intervals are a personal choice connected with trader’s character, personality, and nature.

If you are impatient you would like to see your trade spread rather soon than later. And you wouldn’t wait for trades that take a long time. That means that faster timeframes suit you better.

But faster timeframes also means you have to stay more engaged so you don’t miss key setups. And be careful, every extra second is a chance to do something emotional, like move a stop or take profits too early.

The faster the timeframe, the less chance for mischief.

But maybe the slower timeframe better suits you.

Maybe you enjoy to plan and manage the trade with less furious tempo. Slower timeframes give you time to think.

That can be a great advantage if you like having time to analyze.

Especially if you want to put on more than one trade at the same time.

Slower timeframes may give you more time to manage trades and perform them well. With longer time frames, you have more spare time.

No timeframe will ever be perfect.

If you choose well, it can be a good match for your trading style. And most importantly, you’ll have taken a step towards your own Forex strategy.

One of the most important aspects of any trade is its size.

This represents the amount of money in initial size and in total risk.

General truth in trading is to keep your risk small and constant.

Where is the point if you win on 3 trades making $400 each and if the fourth one loses $5000.

Forex is the market with the greatest ability to sizing money risk. But only if you plan ahead. If you want to risk $1000, make sure you size your position to risk $1000. Don’t try to sensate your way into a trade.

Decide up front the maximum it will cost if it goes against you.

Sizing control is a fantastic attribute of the Forex market.

But this attribute can be a benefit if used in the right way. You have to plan ahead to cap your risk at the right level. If you do this right, your Forex entries will be more in good shape.

And start with fixed outcomes. A fixed outcome is a pre-set plan for how you will exit a trade and usually it comes in as stop limit or profit taking the order. A fixed outcome is a pre-set plan for how you will exit a trade and usually it comes in as stop limit or profit taking the order.

The fixed outcome will reduce the risk of changing your mind and moving the stop to take on more risk, your profit aim will be set and you can relax without wondering when to take profits. It’s a good habit in case something drags you away from your screens. Your trade can function without you right from the start. Fix your outcomes in order to cut down impulsiveness in your trading.

Forex strategies can be a great deal simpler and more effective than many traders make them.

If you have not yet mastered a trading method, you will not be able to get good entries into the market. Thus, the first step is taking some time to get proper training in an effective trading strategy. Find some good one!

And good luck!

Risk Disclosure (read carefully!)

26th July 2018