Tag: Trading forex

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

  • How to predict movement in the Forex market?

    How to predict movement in the Forex market?

    How to predict movement in the Forex market?
    It is possible to predict movement on the Forex market based on several factors.

    By Guy Avtalyon

    I know some of you will wonder if it is possible to predict movement in the forex market. We are all suspicious about any kind of predictions, so why wouldn’t we be when it comes to the forex? On the other hand, almost every successful forex trader will tell you that successful trading comes from the ability to predict the movement in the forex market. So they must know something or they have some secret ingredients or skills.

    I want to tell you that the ability to predict movement in forex isn’t something you can be born with. Actually, it is something you are building all your trading life. To create that complicated construction, you must understand the factors that influence a currencyā€™s exchange rate. Of course, if you want to profit from forex trading.

    Well, why shouldn’t you?

    Millions of traders want to trade Forex because they understand it is the best market to trade. The potential of the online trading market is excellent.

    So I want to tell you more about the factors you should consider in trading forex. That could help you to predict movement in the Forex market in a way to have better chances for success.

    Predict movement in the Forex market

    One of these factors you have to pay attention to is economic growth. The central banks in a country with a strong economy will raise the interest rate to prevent inflation. Higher interest rates always drive the growth of the number of investors, which means the demand for domestic currency increases.Ā 

    Another factor you should understand is geo-politics. You have to watch and notice any kind of disturbance in the political scene. I know you might think it’s too dull. Well, this is very important if you want to predict movement in the forex market because political changes can change the direction of the exchange rate. We saw this so many times in history. If you want to trade currencies successfully, you’ll need to follow political and economic news.Ā 

    Speaking about interest rates, keep in mind that some currencyā€™s value increases along with rising interest rates. This increased value is known as capital appreciation. That is exactly what gives you the opportunity to profit in trading forex. The currency rate is associated with interest rates. So pay attention to it. The data you gather could be a great help in predicting movements in the Forex market.

    Arguably one of the most important factors is recognizing if the currency is conditioned on the country’s capital or trade flow. Capital flow represents the amount of investment some country receives from international capital reservoirs. Trade flow represents income produced from trade. So, you’ll notice that some countries depend on capital flow, while others are very dependent on trade flows.

    The least important factors are mergers and acquisitions when we talk about predicting movements in the forex market. Still, mergers and acquisitions can show you near-term currency changes. Smart traders always pay a lot of attention to them.

    Sure ways to predict movement in the Forex market

    The power to predict movement in the forex market can differentiate a profitable trader from a loser. Itā€™s essential to understand the factors that cause changes in the currency’s price value if you want to last in the forex market. Here is another set of factors that will help you predict any movement in the forex market and allow you to get an advantage in the trade.

    The Consumer Price Index, or CPI, is one of the reliable methods. This measure indicates when the prices of consumer goods are rising or falling. When CPI is above 100, you can be sure the inflation is on the scene. On the other hand, we can be talking about deflation when it is under 100, as the prices are falling. You can calculate CPI per formula

    CPI=(Ct/C0 )*100

    where Ct is the cost of a market basket at the current time, and C0 is the cost of a market basket at some point in the past with which it is compared.

    How does this influence forex trading?

    It’s quite simple. If the inflation rate is steady, you’re sure you can trade a specific currency pair. On the other hand, if the inflation rate is high, stay away, or you’ll end up in losses.

    Catastrophic natural disasters such as hurricanes, earthquakes, or floods ordinarily change a countryā€™s currency and never in a favorable direction. The consequences of these events could cause a currency to depreciate.Ā 

    Also, wars! They might have a calamitous result on the economy. I’m not talking about the damage to infrastructure. The currency value can be diminished, which is more important. It would help if you were updated on such an event to predict the movement in the Forex market. If you trade a currency pair that consists of the country’s currency in war, wait till the economy stabilizes.

    You must have information at your disposal to help you trade forex. No one is saying you should trade without risks involved, but you should calculate the risk. It is the key principle if you want to make a maximum profit. Forex traders are always updated on events that may change the currency pair’s rate. By knowing them, you’ll be able to strategize your trades better. You’ll have a clue when to enter or exit the position.

  • Trading Forex without a stop loss

    Trading Forex without a stop loss

    Trading Forex without a stop loss
    Some professional traders don’t use a stop loss. So, why is it advised to traders: ā€œnever trade without a stop-lossā€?

    By Guy Avtalyon

     

    There are numerous opposing data on the web when it comes to trading forex without a stop loss. A few years ago, I read an interesting article about professional forex traders who never used a stop loss. It was utterly conflicting with my opinion. Well, I think that using a stop loss can protect your trades from more significant losses. But I found that these traders don’t want the algorithm to catch them. They don’t wish to algorithms to know where their orders are settled.Ā 

    Do I need to explain how big nonsense that is? You need stop-loss orders to protect your trades from huge losses. But they don’t use them.

    And there is why they never do that.

    Some of the professional forex traders are negligent and significantly rarely pay attention to risk management. Sometimes they are so sure in their ideas and things that they don’t need a stop loss.

    I’m sure you had a chance to read about or watch forex traders trying to get out of their losing positions like mad just to provide modest profit or just break-even.

    Some pro traders are unreasonable and unwilling to take a small loss if they are positive, they are right. In my opinion, this is irresponsible, and you cannot find many such traders staying in business for a long time. Usually, they end up burned.

    Why trading forex without a stop loss?

    Let me explain something. If you use a stop loss, you’re able to cut your losses quickly. When you place a stop-loss order, the trading platform will immediately close the trade when it hits that unfavourable level. On the other hand, a take-profit order is the highest level where you want to have profits. As you need to set a stop-loss order, you need to place a take-profit order no matter how strange it could sound. If you have a take-profit order in place, your trade is protected from price changes that can go against you.

    But you want to know if there is genuine proof that trading Forex without a stop loss is possible. Also, you might want to know a precise strategy that entirely eliminates setting a stop-loss order.

    And I’ll explain that particular strategy.

    Trading Forex without a stop-loss strategy

    Professional traders that never use a stop loss usually place a hedge on their initial position. You can find many methods to build a hedge and avoid setting a stop loss.

    One of the most popular ways is to place a sell order at the level of stop loss. Let’s assume you enter the trade with a buy order, but it moves against your favour. So, instead of setting a stop loss, you can place a sell order at the same level.

    It isn’t always a good move; very often, it can lead to a losing position. For example, if some unexpected but massive change in the market happens, you’ll lose a lot. Several years ago, it occurred to the Swiss franc. It increased in price enormously after it was unpegged of the Euro. Traders that didn’t place a stop loss for their trades that included sell orders for the franc had huge losses. That was a dramatic situation. So, you can avoid setting stop loss in trading forex, but you could face a lot of problems and huge losses.

    Traders that used this hedging strategy and bought the EUR/CHF with a pending sell order, but without stop-loss, didn’t make money. But, whoever placed the stop loss instead of the hedge, had a fantastic trading day. Remember, on that day; the franc beat the Euro by over 40%. It was in 2015.

    The arguments behind trading forex without a stop loss

    Some of these traders believe that using a stop loss means accepting losses before the price finally moves to your direction. In my opinion, if you think the same, maybe it’s time to analyse the stop loss placement. I’m sure you’ll find where the problem is. Possibly you’re placing stop-loss point too close to your entry point. Keep in mind, a stop loss’s purpose is to limit your risk in each trade. So, try not to misuse it.Ā 

    Some traders believe the excellent trading system is to hold a losing position until the price hit entry point and finally converts to a winner. Basically, this kind of traders avoids taking a loss. But will the price always come back to entry-level? I’m not so convinced.

    Who can know will the price go up or down? No one is able to predict the exact movement of the price.Ā 

    What I know for sure is the price will change for thousands of pips from the current price. That’s reality, and I’m not speculating. Do you really want to bet against this fact? Are you sure you can oppose it? Can you have a winning trades without a stop loss? I would never bet on it.

    Some traders could tell you the stop loss can be triggered by ā€œstop huntingā€ managed by the big financial organizations and they don’t want their stop loss levels to be triggered accidentally. But we have to be honest with this because financial organizations are trading when important news appears. Such a situation could force the volatility in the market, it’s true. But you can place your stop loss far away enough to avoid the influence of the event. Anyway, if you’re a beginner in forex trading it’s better to miss trade during such a period.

    Professional traders trade without a stop loss is a legend

    You should ignore this. The truth is there always will be the wild traders in the market. Many would like to try their hands by taking too many risks.Ā 

    Trading forex without a stop loss could expose you to huge losses, and your profits could be unprotected. I know, getting stopped out isn’t the most pleasant, also it could be painful. But, don’t you think it is better to exit the position than to have losses? What you really have to do is to size your position small enough. In this way,Ā  your stop loss level will be hit on extraordinary circumstances.

  • Is trading stocks better than forex?

    Is trading stocks better than forex?

    Trading stocks is better than forex
    Trading stocks has more options, while forex trading will never confuse you with the number of options

    By Guy Avtalyon

    Trading stocks have become easy. Some would say that we never had a better time for trade stocks. But how is it possible that almost everyone who wants to start trading, first enters the Forex market?Ā 

    Yes, I know it is the most traded market. But I think it is interesting due to aggressive propaganda also. We’re in a permanent barrage by forex ads. People, I don’t have anything against forex trading, it’s my favorite too but can we stop for a while and consider the other opportunities?

    The main question is should we actually trade forex instead of trading stocks? This dilemma comes naturally after I saw how much my readers are interested in forex. Much more than in trading stocks. It’s unnecessary to say how surprised I was. People just jump into the forex market without actually knowing what it is.Ā 

    And I was trying to find why that is. I’ll share with you what I find:

    Firstly, you don’t need a lot of money to enter the forex market. You can trade even if you have just a little money as, for example, $10.Ā 

    If you want to trade stock, you’ll need a bit more. Actually, you’ll need much more.

    Is trading stocks is better than forex?

    Before I answer this question, let me point out some similarities and differences between these two.

    Similarities between trading stocks and trading forex

    There are some basic similarities. For example, brokers. It’s never been easier to create an online brokerage account. You’ll need just a few steps, several minutes, and voila! You have the trading account. The next step is to fund it, of course.

    There is one thing you must keep in mind before choosing a brokerage if you want to trade both stocks and forex. Not all brokerages will allow you access to both markets. Some brokerages don’t service forex trading. Keep that in mind when choosing your broker.

    No matter if someone is a stock or forex trader, such heavily rely on short-term strategies. For example, a stock trader will almost never hold stock for several years or so. Trading stocks means to have short-term goals. Otherwise, it’s investing. The similarity comes to trading forex. Trading forex means to hold currency until its changes show you can profit from your base currency. So, you’ll trade it in such a case.

    Technical analysis is almost the same

    Also, in technical analysis, you’ll use patterns and indicators in both markets traded. If you use technical analysis for your trading strategy (it’s smart to use it, believe me) you will not have a lot of time to analyze news, or to research the company’s outlook. Instead, you’ll look at charts trying to notice indicators that will tell you if your stock is going to rise or drop.

    You’ll need to know if the price change will happen soon. The same is when trading currencies. Technical analysis is important for both types of trading since you need to know should you buy or sell.

    Differences between trading stocks and trading forex

    Letā€™s take a look at some of them.

    For example, leverage. While leverage is somewhat rare in trading stocks it is broadly used in forex trading. Actually, it is crucial for forex trading. Let’s say you have $10 on your account but your broker can offer you the 100:1 leverage. Instead of having the struggle to trade with such a small amount you can suddenly place a trade with $1.000. That’s the power of leverage.

    But I have to warn you. Leverage is risky. On the other hand, it can provide you to profit a lot and without really having thousands of dollars to enter the trade.Ā 

    So where is the risk?

    If you miss making a smart trade, leverage can destroy your deposit, your funds, everything you have.

    In trading stocks, the best you can have regarding the leverage is 2:1. Don’t be disappointed. Stocks’ prices are changing dramatically. To be honest, you’ll need to put less money to gain more profit in trading stocks.

    Trading Hours are not the same

    The forex is around-the-clock. How is this possible? Well, the forex market isn’t focused on a single time zone. Each of them has set their own working hours but when one is closed, the other starts to work.Ā 

    For example, New York starts at 8 AM and closes at 5 PM EST. Oh, it’s time for Sidney to open! Sidney starts at 5 PM EST and closes at 2 AM. Pretty nice, isn’t it?

    Stocks markets operate slightly differently. For example, the largest exchange is NYSE, and it starts at 9:30 AM EST to 4 PM Monday through Friday and doesn’t work during the weekend.

    Also, the market size is different. The stock market is smaller than the forex market. Every single day, the forex market has above $5 trillion worth trade, while the stock market can count on around $170 million per day trades.

    Advantages of trading stocks

    It’s easier to get started because almost all brokerages provide this opportunity. So, you have more choices. Also, there is plenty of stocks to trade, more than 2.000 stocks you can trade only on the NYSE, plus over 3.000 on the NASDAQ, not to mention the other exchanges all over the world. The point is that you have more options in trading stocks.

    Also, stocks have higher volatility. Higher than currencies. That gives you a chance to earn more.

    On the other hand, currency can rise or drop in the fractions.

    Advantages of trading forex

    First of all, you’ll never be confused with the number of trading options. The number of currency pairs is limited. Further, there is no minimum amount needed to start. You can enter the trade with $10. And, at last but not least, the forex market has more liquidity.
    So, you can see that for trading stocks or forex trading you’ll need a strong TA background. Both rely on short-term price changes. Thus, maybe the most important in trading is to get some free up-to-the-minute charting software. It is an absolute MUST.

  • How To Make Living Trading Forex?

    How To Make Living Trading Forex?

    How To Make Living Trading Forex
    Trading forex is like a battle – if you want to win, you have to be ready for it.

    By Guy Avtalyon

    If youā€™re new to trading, you might wonder – how to make living trading forex? Is it possible at all? Well, everyone knows the small traders don’t. But, I have to tell you it’s possible. Even for the small traders.Ā 

    Itā€™s really possible to make a living from forex trading.

    I was just like you several years ago. You wouldn’t believe how desperate I was to earn money. Yes, I had a steady job at that time but it was barely enough to spur my dreams. And one day I met a man who told me he was making thousands per day.Ā  I couldn’t believe it. I thought he was joking. That man told me he is a forex trader.Ā 

    So what, man? The shocking surprise came several days later.Ā  I heed his advice and have made thousands of dollars.Ā 

    I’ll show you exactly how I did and how you too can do the same. So, here is! How to make living trading forex?Ā 

    You might start making money from Forex trading even if you start with a $1 account. Honestly, if you start under $1000 you’ll not have a chance to leave your current jobs but slowly, your capital will grow and you could eventually make a living by trading forex.

    So, how to become a successful Forex trader? How much can you really make? How to make living trading forex?

    Letā€™s hop right in.Ā 

    How to become a professional trader?

    The problem with new traders is that they minimize the engagement needed to succeed. If youā€™re not ready to do what it takes to become a professional trader you should put your dreams about making serious money aside. You have to be committed. You’ll need to invest a lot of your time to learn, build a winning stance by getting the trading skills. You’ll need a suitable mindset, one that will allow you to make money constantly.

    First of all, never give up due to the slight mistake. Second, never challenge or make wild trades. That will lead you to lose more than you should do.Ā 

    Start your day trading as a part-time job. Think about your profits as an additional income. Later, when you come up to the point of fully understanding the forex market you might decide to invest large sums. But firstly, test yourselves, your skills, check your risk tolerance, your trading personality. Only in that way, you’ll build confidence. Never just jump in trading.Ā 

    How much capital to invest to make a living trading forex?

    This is a very important decision. Don’t underestimate it. You have to precisely calculate how much money you can put at risk. That said, it isn’t the same when you are trading to earn some extra cash to pay for luxury travel or you’re risking your hard-earned money to live better. Sometimes, the financial survival of your family is in the game. Trading forex could be extreme psychological pressure. So, you’ll have to decide how much money you can put at risk until you develop and improve your trading strategy.

    What is the secret to Forex trading success?

    A consistent Forex trading plan. If you don’t have a trading plan, you will lose your money. Eventually, you’ll not succeed as a forex trader. Bear to your mind, you’ll not make billions on a single trade. The success in forex trading means you have a series of consistent trades supported by your trading plan. It is never a matter of luck. Forget it! Only if you have a consistent trading plan you can be successful. Forex trading isn’t gambling, so luck has almost zero influence.Ā 

    It’s like in your life. Your life is shaped by things you’re doing consistently. Not from time to time.Ā 

    If you want to be a successful Forex trader you’ll need the dedication to trade according to your trading plan. You’ll need your own rules, your strategy.Ā 

    How to trade Forex?Ā 

    You’ll have to learn how to predict the movement of the forex market. That’s not all! There is more!Ā 

    For each transaction, you’ll need to predict how the value of one currency will go against the other in the currency pair. Some pairs are moving 100 pips every day. That depends on the market conditions for the day you’re trading. And it is changeable. Sometimes during one day, the changes can be enormous.

    Guys, I really hope you know what the pip is! Nevermind, it is the smallest movement of a currency pair. For example, if you trade EUR/USD currency pair and it moves from 1.1900 up to 1.2000 you’ll make a 100 pip move.

    In forex trading, you can buy different lots of the base currency you want to trade. I hope you know what is a “lot size” in the forex?

    The important part of forex trading is to look at indicators to choose the pair and the time to trade. Indicators could be literally everything, from price patterns to macroeconomy.Ā 

    You might think it’s hard to follow but here is your trading plan to help you. Also, you can find some accurate apps and use them. Or, you can use some trading signal provider. Whatever you choose you’ll have to understand the forex is full of mysteries, especially for new traders. So walk carefully throughout this field. Never rush! It’s better to miss the trade than to have the wrong trading and lose money.Ā 

    When you fully understand forex trading you’ll see unlimited opportunities there. And you’ll see how to make living trading forex.

    How much money can I earn trading Forex?

    Yes, I’ve heard a lot of stories of Forex traders that made millions in the short term. I’m sure you’ve heard them too. Forget them! Forex trading isn’t some get-rich-quick scheme. Itā€™s a business. You don’t believe it? Okay!Ā 

    That’s not your pair of shoes. These traders are another category, you’re not the same. You are unique! All your characteristics are different. Your risk tolerance is unlike the trading strategy, you have different rules of risk management. Almost everything is different. Don’t compare yourselves to them.Ā 

    How much money can you make trading forex? I don’t know. Nor anyone can know.Ā 

    Think about the size of your account, also, how many trades you want to do per month, expected returns, will you withdraw your profits, or you’ll reinvest, how much you’re ready to risk per trade. When you get the answer to all these questions you’ll be able to calculate how much money you can earn in forex trading.Ā 

    In any case, you must have realistic goals set in place. You must have a trading strategy with a positive outlook. Also, you must trust your trading plan.

    How to make living trading forex?

    It is like any other job. That means you’ll need skills and strategy. Motivation plays a great role. Find a mentor, that is the easiest way. Let successful traders inspire you. Learn from them. But remember, you’re in charge, you have to create your unique path, you have to shape your trading career.Ā 

    Bear in your mind, every profitable trader made mistakes and still makes mistakes. You will make them too. But try to do that without sacrificing a big portion of your trading capital.

  • How To Trade On A Laptop?

    How To Trade On A Laptop?

    How To Trade On A Laptop?
    A trading laptop has to be able to process a large amount of data quickly. You’ll need multiple windows open or you’ll need a few monitors. Here is how to set up your laptop for day trading.

    By Guy Avtalyon

    Can I trade on my laptop, asked me dozens of readers and I said yes, but you must know how to trade on a laptop. Well, I saw here some misunderstandings about what is the best computer configuration you need for a day trading. Technology is continually advancing, so you’ll need a computer with adequate memory. Also, the processor must be really fast.Ā 

    Guys, you wouldn’t like your computer lagging all the time. Or even worse, stalling when you need to act quickly. Markets will not stay the same while your computer is trying to load or crashing every several minutes.Ā The trading software will need a great memory and processor. For charting, you’ll need the same. Especially your processor must be fast and up to date.

    The simple answer to the question How to trade on a laptop would be: by something really good.Ā Yes, I know. It might cost you a lot but think. If you have a fair enough good machine you’ll be able to trade in a proper time and, this is very important, you’ll be able to use all the necessary tools.Ā For example, day trading is something most traders want. The point is that it demands that you have a whole tools kit. Otherwise, you’ll never do this job well.Ā 

    How to trade on a laptop easily?

    These days’ trading is based on electronics. You enter the markets over the internet, right? So, you need a computer or laptop to make a trade and have direct access to your brokerage. The other tools you’ll need are market data in real-time, and great trading platform. But keep in mind, these are basic tools. You’ll also need a charting platform and many other trading tools. The common thing for each of them is that all of them require great computer performances.Ā 

    So, how to trade on a laptop?

    Isn’t it easier to have two or more monitors since you’ll maybe need to look at charting software monitors, broker’s website, market data? Well, having a few monitors isn’t a necessity but is an advantage.

    Well, I have to be honest. Trading with a desktop PC is easier and cheaper than with a laptop. Do you remember what Iā€™ve said about requirements toward memory and speed? Well, a PC is more favorable since it can be configured for more speed and processing ability than a laptop.Ā 

    What are the main problems with laptops? First of all, they have limited space, the components are smaller but more expensive. So you’ll need more money to spend if you want to have a high-end laptop. It could be cheaper to buy a PC with similar performances.

    The other problem could be to connect several monitors. Let’s say your laptop’s screen is smaller than the monitors you can connect via DVI port, for example. So, it could be exhausting trading while looking at a small laptop screen and large monitor next to it.Ā 

    Well, not all is better if you use a standalone PC. Let’s say they are robust, in the first place. And you don’t like to sit in front of it the whole day or even longer while monitoring your trade. You really don’t need it if you trade on a laptop. It gives you mobility.Ā Especially if you prefer automated trading that is known as robo or algorithmic trading, also.

    So, how to trade on a laptop? Yes, I see you’re impatient. You have to install your system on a virtual private server (VPS). What is this? It is a remote server that is located near or close enough to the broker’s server. You’ll have a minimum of latency, minimum delay in placing your trade orders.Ā In essence, your trades will come from the remote server connected to your laptop.

    What do I have to do to trade on a laptop?

    If you have a high-end laptop the only thing you’ll need extra is a separate monitor connected to the right port. The other solution, if you want to connect more monitors, is to buy one USB video adapter for each monitor you want to connect.Ā 

    Yes, you might say your laptop doesn’t have several ports. Well, there is a solution also for that issue. Just get a USB hub and voila, your two or more extra monitors are connected.

    Hey guys, one thing more! Don’t try this if your laptop doesn’t have enough RAM, for example, 8 GB at least.Ā 

    What tools will you need for trading on a laptop?

    As I said before, you’ll need a powerful laptop. The other important tool is a trustworthy platform to trade. Numerous brokers will give you access, you have to be smart and choose one with good charting software. Why is this important? Because if you want to be a profitable day trader you’ll need to act quickly and how to do that if you don’t have an option to see the tick charts and timed charts. For day trading it is imperative to have 1-minute, 5-minute, hourly charts.

    As a day trader, you’ll need software that allows you to place trades quickly. Your trading success heavily depends on your strategy but if you don’t have advanced software you won’t be able to execute your strategy properly.Ā 

    The main goal here is to find the best software to meet your needs and to connect it with your trading service. That is how you can trade on a laptop.

    The problem may arise if you don’t have fast internet. With a slow internet connection, it is impossible to trade. In day trading, hundreds and hundreds of data will stream directly to your laptop every second. What do you think, is it possible to follow the price moving in real-time with slow internet? Of course not! So a fast internet is an important tool for your trading success. Otherwise, you’ll receive out of date data and your trading will fail. You’ll lose your money.

    Also, you’ll need to backup your internet access in case of service’s outages. Yes, shit happens! Use your smartphone as a backup. You can create a hotspot and continue to use your laptop or you may have direct access from your smartphone to your trading platform. Never use the same internet provider for your laptop and for your smartphone for this reason.

    Appropriate market data is a necessary tool

    Day trading demands a perpetual stream of market data, info about the price movement. Your broker will give you market data, but it’s up to you to demand the kind of data you need. For example, if you trade forex, you’ll need forex market data. Forex brokers give data for free for all forex pairs which is convenient because all you need to do is to open a chart and you’ll see the price data.Ā 

    For the stock market, you’ll have to subscribe to the data you need. Don’t add too many.

    It is possible to trade on laptopĀ 

    When you ask me how to trade on a laptop I have only one answer. I’m trading on a laptop. I’ve never used a PC. Is it a harder or simpler solution I don’t know since I never made a comparison. And know what, I’m satisfied. This doesn’t mean you’ll be also. But this post is written because you asked me. So, this was how to trade on a laptop.

    Happy trading, guys!

  • Price Action Strategies For Profitable Trading

    Price Action Strategies For Profitable Trading

    Price Action Strategies
    Experienced traders use price action strategies in trading to make more profitable trades. Price action strategies are one of the most used in current financial markets.

    Price action strategies in trading are present for quite some time. They are here for good reason. That’s why these strategies are frequently used in the financial market. Price action strategies are used by both long-term and short-term traders. The point is that analyzing the price of a security is maybe the simplest but at the same time the most powerful approach to getting an edge over the market. And that is crucial for any trader. Having an edge means that you’ll not be found out by the market.Ā 

    Okay, you might think you are a great trader because you had several winnings. Do you really think that having luck is the most important part of trading?

    Anyone can do the same if the lucky is a matter of importance.

    Relying on luck is the danger because the wheel of fortune is turning around. And eventually, your winning trades will become great losses. All the profits you made during your winning streak will vanish like a soap bubble. That’s because you don’t have an edge. Actually, in this case, your edge is with the market which is too risky because at some point that edge will play out in favor of the market securing that trader loss.Ā 

    If you donā€™t have an edge and the edge is in the favor of the market, it is a matter of time until the edge starts to play out and you’ll become a loser.Ā 

    Think about this as a casino, for example. All tools and machines in the casino have odds adjusted in favor of the casino. In any case, the casino is the winner. Yes, from time to time someone will make a lot of money, but there are many losing players, more than winning. So, the casino will be the winner in any case.

    That is the casino’s edge. The exact comes with your trading if you are only considering your next trade and never think about trading inside the market’s overall edge.

    Stay focused on the price action

    Price action is a trading method that enables a trader to understand the market and make trading decisions based on current and real price actions. So, in price action strategies you are not relying only on technical indicators. As you can see, the action price strategies are dependent on technical analysis. Some traders use price action strategies to generate a profit in a short time.Ā 

    If you want to be a price action trader, you must be focused on price action. This sounds like nonsense, you may think. But if you want to evaluate deeper, you will find the majority of traders think the price action strategies are the same as pattern trading. And that is a great mistake.Ā 

    While pattern trading requires just staring at the last candles of the chart and making a trade based on them, for price action trading you’ll need more. Yes, in pattern trading the last one or two candles can be an excellent entry signal, in price action strategies they are just candles among many many other candles on the chart.

    Every successful price action trader knows how to read a price action chart as a whole and knows how to force them to tell the entire price action story. Price action traders have to interpret the real order flow, support and resistance, traders’ behavior and trends through the live price action.

    What is price action trading?

    Price action trading is trading in which traders base their decisions on the price movements of an asset which can be stock, forex, bonds, etc. There is no need to use other indicators, your trade is based on price action solely. Of course, you can use other methods but it will have a very small impact on your decisions.

    The price action traders believe that the only valid source of data flows from the price itself. For example, when the stock prices go up, the price action traders know that investors or other traders are buying. Based on the aggressiveness of that buying, price action traders estimate will the prices continue to rise. These traders don’t care why something occurs. Their all concern is to find the best possible entry point with lower risks but with greater profits. For that to know, they are using real-time data, for example, volume, bids, offers, magnitude and similar. Also, historical charts are very important.

    In trading – what is that?

    First of all, price action trading is the method where you make all your decisions from the so-called “naked” price chart. That means there are no other indicators. All we have is price action. That’s a lot of data because all markets generate data about the price changes over different periods. And that data is displayed on the price chart. What can you read there? For example, everything about the beliefs and behavior of other traders and investors, no matter if they are humans or computers. Data is for a specific time frame and all opinions, beliefs, all financial data, news that affects price change, and behavior are visible on the chart as price action.Ā 

    The most important part, with knowing the price movements, you’ll be able to develop a really profitable trading system. All signals from the price action chart have a general name – price action trading strategies. These strategies can give you a chance to predict future movements with a high level of accuracy so you can make a profitable strategy.

    Price action trading strategies can be used on a broad variety of securities including stocks, bonds, derivatives, forex, commodities, etc.

    Price action strategies

    Trendline strategy

    One of them is the trendline strategy, very simple to use. The main point here is to know how to draw trendlines. This is an important part because only if you do it properly you’ll be able to predict where the price will bounce off the trendlines. Well, you’ll take a trade based on it so be consistent in how you draw trendlines.Ā 

    Breakout strategy

    The other price action strategy is a breakout. For example, a stock price is moving with a specific tendency. When it breaks the tendency, it is a signal for a new trading opportunity. To make this clearer, suppose a stock traded between $9 and $6 for the last two weeks. Suddenly, it moves above $9. So, the stock price changed the tendency. That is the signal for traders that the sideway moves are probably finished and the stock price is possible to go up to $10 or more.
    Of course, you might be faced with a false breakout, but it is also an opportunity to trade in the opposite direction of the breakout.

    Bars formation

    Another price action strategies examine the price bars formation on a specific model of the chart. For example, candlestick charts. If traders use candlestick strategies, for example, the engulfing candle trend strategy. It is important to wait until the up candle engulfs a down candle during an uptrend. That should be your entry point, the moment when an up candle goes above the opening price of the down candle.

    You can use price support and price resistance zones. That could give good trading chances. Support and resistance zones occur where the price has tended to reverse in the past and these points may be relevant in the future.

    Bottom line

    Price action strategies aren’t suitable for long term investments. They are aimed at short-term traders. So many traders don’t think that the markets never operate on consistent patterns. They believe the markets work randomly. The consequence is that they don’t think it isn’t possible to have a strategy that will work in any case. If you combine technical analysis with historical price data, price action strategies will allow you to make profitable trades.Ā 

    These strategies are very popular today due to its advantages. They provide flexible trades, access to many asset classes, use of any software, apps or trading websites. Moreover, traders have a chance to backtest any strategy on historical data. Also, maybe the most important part of price action strategies is that the traders have an opportunity to choose their actions on their own. So, that creative approach to trading is important for many of them.Ā 

    A lot of proponents on price action trading insist on high success rates. Trading has the potential for making great profits. Traders-Paradise suggests testing and acting after that. Just to be ready to meet your best possible profit chances.

  • Trading Forex – How I made $10,000 on a trading platform?

    Trading Forex – How I made $10,000 on a trading platform?

    trading forex

    Trading forex can be very profitable and you can earn money quickly. Here is how.

    By Guy Avtalyon

    My trading forex story begins like this: I was so tired of ā€œopportunitiesā€ that end up taking nothing but a lot of time and money out of my pocket while gaining nothing except lost time and money. Donā€™t get me wrong, I was willing to put my free time into something that is real.

    The forex market offers more opportunities for quick financial success and financial ruin too than almost any other market. The crowds have always been attracted to it. They include speculators, trading novices, retirees, and professionals looking for a way to get out of debt, increase the excitement in their lives, or simply get rich real quick. I’m one of them.

    If you have a computer and an internet connection, you can trade forex from anywhere in the world, it is the best home-based business of the 21st century. But the problem is that most people donā€™t know how to trade forex.

    Learning forex trading is not easy

    It requires time, patience, and sustained effort. Most people lack the time to learn forex trading. I wanted to become rich. And theĀ first lesson I got was: I have to fail and learn from my failures. I know that most people fail but do not learn. The skills of the trade arenā€™t like taking a diploma and slowly walking on the path of your career. In trading, when you ā€œadvanceā€, you donā€™t even know if youā€™re making progress in the right direction.

    When the results show otherwise, itā€™s so hard to admit that the past months or years of ā€œprogressā€ wasnā€™t that at all. And after admitting that to yourself, you need to learn from it. You have to put your ego aside. Trading without emotions is a MUST.

    Have you ever heard of someone turning a $100 starting capital into $100,000? Maybe you have. Well, such stories were and still are very rare. You really must have the full picture.

    I have to tell you some big truths.

    Trading forex is not a shortcut to instant wealth.

    The old saying ā€œIt takes money to make moneyā€ is a precise one, Forex trading including. What would you have to do to start atĀ Ā $100 and have a trading account worth $10,000 a year later?

    Almost any pattern of gain or loss is theoretically possible on the forex. But return on investment (ROI) calculator shows you that to accomplish this, your annual rate of return on investment needs to be 9,900%! If you enter and close out one trade every day of the year, the average profit on each trade would have to be at least 464 percent on those 100 bucks! You’d have to more than quadruple your money every day to come even close to $10,000 at the end of a year.

    Does this sound like something that’s happening in the real world?

    There’s something so deceptively rational. The idea to start with $100 and turn it into $10,000 needs to be shown into return rates to show how absurd this really is. It may be theoretically possible, in reality, it’s no more likely that your cat is starting to fly.

    No matter what you were told, you have to know that your starting capital is the place to start. Having a good starting capital can help you to set your trading goals, define your risk management, and adapt your trading system and position management around your starting capital.

    For many traders, a starting capital of $10,000 should be a good starting point. Depending on other factors such as leverage you can start making profits for as little as $10,000.

    The math for trading forex

    Assume you start trading with $30,000 and you can risk on each trade is $300 (1% of $30,000). You use 4:1 leverage, which gives you $120,000 in buying power (4 x $30,000) and utilizes a strategy that makes you $0.21 on winning trades and you lose $0.12 on losing trades.

    A good trading system will win 60% of the time. Your average is 5 trades per day, so if you have 20 trading days in a month, you make 100 trades per month.

    60 of them were profitable: 60 x $0.20 x 2300 shares = $27,600

    40 of them were unprofitable: 40 x $0.13 x 2300 shares = ($11,960)

    Let’s say your cost per trade is $20 (to get in and out). Your commission costs are:
    100 trades x $20 =$2000.

    If you pay for your trading platformĀ or exchange entitlements then those fees are added in as well.

    That means, you can make approximately: $15,640 ā€“ $2000 = $13,640 or about a 45% return per month.

    Return on a single trade

    As your account grows, your position size and your income will become larger.

    Thanks to the availability of leverage, forex traders can make a return on a single trade. When multiples of the margin they used to open the trade. But, leverage is a double-edged sword. It can also mean big losses. Reliance on excessive leverage as a strategy typically leads to theĀ destruction of your account capital in the long run. This is because it only takes one adverse market move to drive the market far enough and trigger losses. You need to view forex like you would any other market and expect normal returns by using conservative amounts of no leverage.

    Websites that propose big and fast returns, to start with $100 and turn it into $10,000 in a short time, or imply that you can somehow get rich quick on the forex starting with very little are openly speaking frauds.

    What you can do?

    In the last few years, many pro traders have started their own forex signals services that provide trading signals to their subscribers via email and SMS.

    Copy the trade of these pro traders onto your own account the instant they are made.

    Now, what this means is that the pro trader is going to do all the market analysis, decide which currency pairs to trade and when to enter and exit the market. You donā€™t need to do any of the stuff above.

    Follow elite traders when trading forex

    At the same moment when pro-trader makes the trading software will instantly copy that trade onto your trading account.

    So, if the pro trader makes a winning trade, you also make a winning trade and if the pro trader makes a losing trade, you also make a losing trade.

    Try the best forex signals service in your opinion on your demo account. Install the trade copier software and start copying the trades made by the pro trader.

    At the end of the month, evaluate the performance of the forex signals. If not satisfied, go for a refund. After several tries, you will be able to find a good forex signals service.

    Most pro traders make around 1000 pips per month. 1 pip on a standard account is equal to $10. 1000 pips per month mean making $10,000 per month.

    Voila! You earned your $10.000!

    But before all, make sure you test the signals for at least two months on your demo account before you start trading live.

    And you should know some basics of forex trading. You can learn that online for FREE. Most of that information is available for FREE.

    Good luck!

  • Forex Scams and How to Avoid Them

    Forex Scams and How to Avoid Them


    There is a high level of possibility to get trapped in some Forex scams. Here is how to recognize them and avoid falling in them.

    By Guy Avtalyon

    Forex scams are the reality but you must know how to avoid them

    The Forex market is among the most active trading markets in the world. Hence, participants are ranging from multinational corporations to large banks, to speculators, to governments, and a small fraction of individual professional traders. Even more so than other markets, investing in Forex can be very profitable. Ā 

    However, there is a risk involved in these investments but weā€™re not talking about normal risk in any type of investment. I’m talking about Forex scams, where the investment is simply an obvious case of fraud. We all can find on the internet how individual traders complain through forums about how their brokers screwed them.
    The forex market involves very active trading of over $1 trillion each day. Futures and currency options put the trading at closer to $5 trillion daily.

    Still, there are a lot of opportunities for many forex scams over promises of quick fortunes through “secret trading formulas” or algorithm-based “proprietary” trading methodologies.

    What are Forex scams?Ā 

    For example, signal sellers. One of the challenges a novice forex investor faces is determining which operators to trust in the forex market and which to avoid. The signal seller is offering a system that purports to identify favorable times for buying or selling a currency pair. They all claim they want to provide information that leads to favorable trading opportunities. But signal sellers usually charge a daily, weekly, or monthly fee for their services. Otherwise, how they can earn?

    How does typical work?Ā 

    The scammer gains the trust of his/her victims with a promise of a great and quick profit. Indeed, it’s possible to make a big profit by trading on the Forex market, but not in the way that the fraudster promise. The scammer takes money from the client (actually the victim) and claims that he/she will earn big profits by trading currencies on Forex. In the beginning, the profit is big. But this profit was not realized by scammer’s trading on Forex. The scammer uses the money of newer customers to pay promised earnings to previous clients.

    But, victims of fraud, thrilled with good earnings, often decide to invest even more money with the fraudsters. In addition, they often recommend a good opportunity to earn money for their friends so that the network of clients is rapidly increasing. The scam ends after the inflow of new customers ceases to exist or be diminished to the extent that the fraudster is no longer able to pay good earnings to older clients. Then the victims realize that they were deceived and that had lost everything they had invested.

    How to identify Forex scams?

    The easiest way to identify a fraudster is if he/she requires a client to deposit money in cash, bypassing payments through the bank. Real Forex brokers work solely payments through banks. Real Forex brokers provide customers with access to the market where the client decides which currency to buy or sell, depending on which trading result is. Additionally, every client at any time of the day or night can access to the account and can track the status of his account in real-time.

    How to avoid Forex Scams?

    Since you are into currency trading to make money, you must know how to avoid Forex scams. The information here will help you a lot on how to avoid Forex scams.

    Whenever you are dealing with some site, be cautious, and don’t trade with websites that say you that Forex trading is simple. The scammers capitalize on the human nature of wanting things quick, easy, and convenient. Method to avoid Forex scam is for you to keep away from any website that claims to have a secret trading system. Don’t ever fall victim to these incorrect offers. A lot of Forex traders believe the fact that there is a holy grail or secret trading method that will make a profit for them overnight. Reading reviews of experts will help you to find the broker that fits your Forex requirements. Reviews are a good solution anyway, they can help you to recognize those that can bankrupt soon or save you from scams. The truth is that you need a lot of hard work and patience to succeed in Forex trading.

    A lie or truth about Forex?

    If you’ve ever searched by some browser for the word “Forex”, you weren’t surprised that some sites write about Forex fraud, often placed on the first page. You will find that Forex is a big fraud and legalized robbery. The “big”, that is brokers and large financial institutions, have teamed up to take the money from the “little ones”, that is ourselves.

    We can completely calmly say that Forex is no fraud and it will never be.

    So, the Forex market is really great as the potential for earning. Forex trading is real, and Forex at itself is not a scam. People are something else. Some people will always find a way to cheat, deceive, dupe, swindle. That’s the nature of human beings.

    That still does not mean the Forex is a scam, not at all. Everyone should be on the lookout for any potential on Forex and invest their money wisely.

    If you have personal experience, share it with us and others.