A high percentage of the deposit is involved, or when is a margin call coming? Part 1

Beginner traders often make the common mistake of using too high a percentage of their deposit to make a deal. The free part of it is so small that just a few tenths of points of market movement in the opposite direction from the forecast results in such an unfortunate phenomenon, as a margin call (margin-call), and then a stop-out - forced closure of a position by a broker due to lack of funds to cover the loan. The meaning of the illusion, which is misleading, lies in the nature of margin trading and the erroneous expectation of an exclusively positive result.
The meaning of margin trading is that a trader, when applying for the services of a dealing centre, has the right to use the credit provided by it for currency trading.
Depending on the trading conditions stated by the broker, the amount of this credit can be 20, 50, 100 or even 200 times higher than the deposit. This value is called a leverage, and is specified in the trading regulations as 1:20, 1:50, 1:100, etc.
Thus, placing a deposit of $1,000, you can actually have a sum, for example, 100 times larger, i.e. $100,000. Doesn't it tickle the nerves? And you begin to involuntarily suffocate from the unfolding prospects.
It is the leverage that allows you, with relatively modest means, to earn very immodest profits. That is exactly what makes a beginner's head spin, making him forget about the danger of bankruptcy.
The trap is set by the dealing centre. Most of the time luring the Forex beginners to the currency market and vividly describing all the advantages of Forex trading, brokerage companies mostly emphasize that you will definitely and without fail make profit in three or four digit amounts of banknotes. It is to earn, not to lose. The catch is that you can't do without losses. Especially at the beginning of a trader's career, when experience and discipline are scarce, or rather both are practically non-existent. And absolutely any trading strategy contains both deals that were closed with profit and deals that were closed with a loss. Of course, one would like to immediately find and adopt profitable trading strategies for beginners, where the sum of profits at the end of the period exceeds the sum of losses. But it is out of the realm of fantasy. No one trades only in the plus all the time, and even Soros had bad years.
As a rule, to lure a trader to the currency market, the dealing centres have a team of sophisticated market makers who create a lot of advertising material. The flashing banners that grab your attention focus solely on the round sums of your potential earnings. And it also paints a carefree future of you relaxing on the beach with your laptop, sipping a martini and watching the sunset.
The articles contain beautiful pictures with the price charts, which show the date of entering and exiting the market, and it is presented in the form that some girl, who was lying on a sofa, trading with a standard lot of 100 000 units, has earned $ 2400 on EUR/USD for two days. And all this with only $1500 on deposit! A person, who is actively searching for ways of earning, sees such a picture, thinks: "And why do I go to my hateful job when I can get 10 times more in just two days, spitting at the ceiling?"
If you compare several versions of the text of such agitations, you will notice that only positive trading results are discussed. These articles don't describe the risk Masha took buying a standard 100 000 units of currency pair EUR/USD with a deposit of 1500 dollars. There's also silence about the minimum amount of security (collateral). At best, there is a warning in small print with an asterisk, saying that trading on the currency market is a risky activity, and that the client, i.e. the trader, is fully responsible for the consequences of decisions made on transactions.
To better understand what we are talking about, we need to calculate the percentage of the deposit made by Masha, whose quick and easy earnings we all quietly envy, and what it was threatening her with.
So, there is such a notion as minimum deposit size determined by trading conditions regulated by a dealing centre. It is, for example, 25% of the current amount of funds on deposit. This means that if the current loss amount will occupy the remaining 75% of the deposit, the broker will carry out a forced closing of the position (StopOut operation), and only 1500*0,25=357 dollars will remain on the deposit. Frustrating, isn't it?

A high percentage of the deposit is involved, or when is a margin call coming? Part 2

Let's try to determine the size of the threat to the deposit, i.e. let's consider the situation when our expectations are not met, and the harmful bad rate goes in the opposite direction from the forecast. How many points of such a "slack" can the deposit survive? After all any trading system should contain the standard value of the maximal slack, while in long-term periods this slack can equal or exceed one hundred, two hundred points or more.
The point value in trading with standard lot of 100 000 units of the currency is 100 000*0.0001=10 dollars, and 75% of a deposit of 1500 dollars is 1500*0.75=1125 dollars. By simple calculation we determine that this amount is enough for 1125/10=112 points of "sag". After that, the losing trade will be closed.
What is 112 points? A little more than one "figure" (the term "figure" means 100 points in trader's slang). Each currency pair has a different daily "move", while EUR/USD can easily go this way for a couple of hours or even less, as its average "move" is one hundred and fifty pips or more during the day.
Thus, it appears that if the forecast has not come true and the position is not covered with a stop order in order to minimize losses, the trader will irrevocably lose 75% of assets in the deposit within an hour. Now this is indeed a "rosy" prospect!
So what to do? The answer is very simple - you need to use a smaller percentage of the deposit for trading, thereby reducing the likelihood of the above sad events.
The optimal percentage for trading is recommended to be between 10 and maximum 15 per cent of the deposit, i.e. in our case it would be 1500*0,10 = 150 dollars, which, given the leverage of 1:100, would open a position, for instance, on the EUR/USD pair, using 150*100=15 000 units of the currency. If the minimum lot size is limited to 10,000 units, then 10,000 units, or one mini lot. Some brokerage firms do not impose restrictions on lot sizes, and you may open a position even using non-circular amounts, such as 25126 units. This gives you a very handy way of controlling the percentage of your deposited funds by opening additional positions. Also, it is not necessary to exceed the maximum percentage value of the deposit, which is impossible when trading whole, not fractional, lots.
So, how much is the maximum possible "slack" in our case? Let's calculate:
The price of a pip at a lot of 10,000 units - 10,000*0.0001=$1.
Remember that 75% of our 1500 deposits, it is - 1125 dollars, respectively - this trading account can withstand 1125 points of "slack".
This is already a very good safety margin that will be your "safety cushion", will provide you a healthy sleeping and help keep your nerves stronger.
But, of course, you should by no means increase "slack" up to such level, because it might result in stagnation of funds on the deposit and stop-out situation. For this reason it is better to constantly monitor the current percentage of the deposit and avoid dangerous overshooting, closing unprofitable positions in time.
It is undoubtedly unprofitable for the dealing centres to draw attention in their advertisements to such a negative aspect of trading, as high risk, because there is no way to lure the client to it. At best, you will read about it in the trading regulations when you sign the contract, but at the time you decide to trade without realizing what you are signing up for.
However, having high risk does not mean you should not trade on the currency market at all. Remember, it's you, not your broker, who is taking the risk, so, as they say, forewarned is forearmed. Your knowledge of the basic rules of capital management and risk minimization will be your weapon and protection.
You should also take into account the logic of the statement that it is better to LOSE less, but to profit with a small lot, than to LOSE more with a big lot.
Greed is not the best advisor in the practice of Forex trading. Losses will happen anyway, they are inevitable, even with the best forex strategy, but the amount of available funds on the deposit should be enough to withstand slack, so as to be able to wait and close position with profit. Or, you can use your free funds, and open in the opposite direction from the direction of the open position, thus equalizing the losses and profits. In this case you will get a clear advantage in the form of saved deposit.

A losing streak is no reason to quit the market!

The vast majority of forex traders live for the day. All they are interested in today, now, at this moment - is the profitability of their opened deals. And if suddenly the market starts to go against their open positions, they not only do not close their deals, but continue to hope for a miracle, losing their equilibrium, and after receiving a margin call they fall into a psychological stupor and leave the market altogether. After all, stop-loss was not invented by cowards.
However, you should keep in mind that Forex trading is a slice of normal life. And in most cases, the losing streak is followed by the lucky streak - losses are replaced by gains. There is no luck without loss and the trader's experience includes not only the joy of victory, but also the disappointment of defeat. The main thing is to draw the right conclusions, to analyze a losing situation and remember that the main thing in Forex trading is psychology!
The trader's way starts with losses. It is no coincidence that experienced and highly respected investors prefer to invest in traders who have experienced a period of great losses and failures. They are not embarrassed by this, on the contrary, they are attracted and respected. They believe, and not without reason, that it is better to entrust money to a person, who was able to pick himself up after big financial losses. An experienced and knowledgeable investor will always have more confidence in a trader who believes in himself, in his knowledge and experience - bad and good, who skillfully takes advantage of his victories and defeats, taking advantage of both.
In short, a losing streak is no reason to leave the market forever. You just need to plan your Forex trading so that one single trade will not cause irreparable damage to your entire account. And that's where everything is already open and invented before us. Protection orders and proper money management are two true guardians of any deposit.
While rejoicing at profits, be mindful of losses Devote all your attention to losses, not to gains. You must always have a plan in case the market turns against you. Plan for everything - how much of your account to trade, how big to stop, etc. Just do not ask whether to place a stop or not. Try to structure your work in such a way that nothing can catch you off guard. When thinking about profit, plan for loss.
It is the observance of this simple rule that is the main difference between winners and losers. A winner always knows how to behave and what to do when they lose a trade. An unsuccessful participant, on the contrary, panics, makes a fuss, falls into a psychological stupor, loses faith in himself and in luck, and subconsciously sets up for another defeat. Naturally, it is just a matter of time before such trader leaves the market.
Success comes to those who believe in it and are not afraid of defeat! Success comes to those who do not give up after the first obstacles, who do not stop believing in themselves and in their luck. And, most importantly, you should remember that success rarely comes at once - in any activity. And Forex trading is no exception. So, a losing streak is not a reason to quit the market!

Aggressive Forex trading - pros and cons

One way or another, but any trader, especially at the initial stage of development, has to make a choice between aggressive trading on Forex and conservative trading methods.
Which of the two approaches is better? This is how beginners often ask the question. Of course, one could say at once that aggressive trading methods are vicious, and you should not even think about using them. Trade with a risk of one to three percent of the deposit, in each single transaction, and you will be fine. But such an answer would be too simple, and would not correspond to the existing realities. So let's try to go deeper into the subject and make appropriate conclusions as to whether aggressive trading on Forex is worthwhile or not.
Ways to trade on the currency market
So, Forex trading can be carried out using various methods:
1. Conservative or passive trading. 2. aggressive trading. 3. Moderately aggressive trading.
Although forex trading methodology is conventionally divided into three types, the main ones are conservative and aggressive methods. These approaches are most often discussed and analysed in detail.
- Aggressive trading will be considered trading that involves large volumes. The risk in one trade here will be as high as 10-20%.
- Passive trading is a type of trading activity when the risk component in one transaction varies from 1%, up to 5% maximum. It allows withstanding a large number of losing trades, one after another, without much damage to the deposit.
In order to determine which trading style you should consider the pros and cons of each of them.
Conservative forex trading
Let us first take a short look at conservative trading. This style is usually preferred by traders who have already achieved something in exchange trading. Advantages of such methodology:
- Firstly, by working conservatively in the market, the trader does not experience a lot of psychological stress. He makes the right decisions and lives a full life, earning money at the same time.
- The probability to lose deposit when trading passively is close to zero. If everything is well thought out, the trader works in accordance with the system and following the money management rules, then his chances of losing the deposit are insignificant.
- Stable capital growth. The profit in such trading is small but stable.
It means such trading allows a person to be sure in the future. He can afford to increase the capital and rely on the money earned.
If we speak about disadvantages of conservative methods it means scanty profit with small deposits. As practice shows, conservative trading can be afforded by traders, whose deposit size starts from 5000 US dollars.
But what about trader who has on his account 50, 100 or even 500 dollars? Often such trader takes a certain risk and starts trading more aggressively. Whether it is good or bad, it is hard to say. Sometimes there are traders who trade very aggressively in the market and have considerable funds in their accounts at the same time. In this case it is a style that has been developed over years, and there is no need to break it.
Aggressive trading style
The main advantage of the aggressive trading style is the money, a lot of money that can be earned in a relatively short period of time. But this trading style also has its disadvantages.
- Aggressive trading requires higher psychological control. A trader must not only be confident in his abilities, but also have considerable experience in trading.
- Aggressive trading demands great concentration and responsibility. Miscalculations and mistakes are inadmissible. The slightest error in such trading will lead to the total losses exceeding the profits.
- Aggressive trading takes much more time as compared to sedate, conservative trading activity. The trader in such trading consumes much more energy and nervous energy.
Keeping all these pros and cons in mind, you should choose the trading style that best fits your beliefs based on your specific situation.
Which trading style should I choose?
So, what advice can you give to a beginner, when you are choosing how to trade? Of course, if you first set yourself up to gain small but stable profit and follow the plan you will in time make a proper trader out of a beginner.
But if the initial deposit is small and the trader is aware of the fact that he can lose the money at any time, the choice of aggressive trading may be justified. In case of failure such trader will not blame the broker, will not refer to the circumstances, and will not see on the currency market only fraud. It is his choice and the unsuccessful result is due to inexperience and high trading risks.
Suppose, in the course of aggressive trading, the trader managed to increase his deposit and on his trading account grew up, for example, to 5000 US dollars. What to do in such a case? Should the trader continue trading on the market aggressively or change tactics and switch to more conservative trading? The best solution in such case will be passive trading. It may be hard to make oneself trade in a conservative manner with minimal risks. But you have to try, especially if the aim of trading is not immediate profit, but a stable income for the long term.

Applying Fibonacci numbers on Forex

Stable and profitable Forex trading requires a lot of knowledge, and, moreover, not only of indicators and strategies, which are very popular today, but also basic knowledge, i.e. of market theories and laws, on which all popular indicators and strategies are based. Any trader can find a successful forex strategy, which will work for a certain short period of time, but only those, who know the basic theories, can trade profitably for many years. There are several theories, and each one can be studied separately for a long time, but in this article we will discuss only one of them, Fibonacci numbers and their application at the Forex market.
Fibonacci numbers sequence
Fibonacci numbers are a numeric sequence, a series where each successive number is a sum of two preceding ones. The series is infinite, we are interested in its original values of 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, etc. The sequence invented by the Italian mathematician has found application in many spheres, from astronomy to art. It didn't pass by Forex as well. By observation, certain ratios of trend waves, impulse waves, corrections, and other values were derived. These ratios are often approximated to the values of Fibonacci numbers, due to which one can use them to predict the price movement with a certain accuracy. Fibonacci numbers have become the basis for a large number of trading instruments.
Fibonacci numbers in forex
The most popular instrument on the market is the Fibonacci levels. They are based on the fact that the length of a particular evaluated wave is equal to a hundred percent, and various Fibonacci numbers are percentage levels relative to the length of this wave. Thus, if built correctly, we get several potential correction levels and several "targets" to which the current trend is aiming. It will allow us to set Stop Loss and Take Profit levels and determine the possible limits of price movement.
Apart from Fibonacci levels there are other tools in forex, such as Fibonacci Fan, Fibonacci Extension, Fibonacci Arcs, Time Zones and others. It would take a long time to describe the application mechanisms of all of them.
If we talk about specific trading signals given by the tool, they can be similar to the signals of support and resistance levels. That is, when approaching the level, say, from the bottom, the price reversal is likely, you should open a sell deal with Stop Loss above the level. And vice versa, when approaching from above. In the case of a strong price movement in the direction of the breakout level, Stop Loss should be placed behind the broken level. The price moves from level to level, knowing this, and having levels, you can mark out the probable price movement. But we must not forget about the influence of other factors, for example, the same resistance and support levels, which do not always coincide with the Fibonacci levels. Using Fibonacci levels in combination with other tools increases the quality of forecasting.
The main advantage of Fibonacci levels is that they belong to those few instruments and indicators of technical analysis which do not follow the price, but give anticipatory signals allowing us to react on time. By trading only lagging instruments, getting a signal and waiting for its confirmation, we lose the most precious minutes when the price makes a major movement. Following the price and being unable to predict its movement is the most common reason of failures of traders.
Disadvantages of Fibonacci tools are also obvious. Their use as independent indicators gives too inaccurate and ambiguous signals. The peculiarity of the Forex market is that you can never predict the price movement with 100% confidence, especially if you rely only on the signals of proactive indicators. The cure for this may be the use of Fibonacci tools in combination with the indicator following the price, which signal will be confirming. This will help to avoid a lot of false signals.
Fibonacci numbers in Forex are just one of the basic theories. For successful trading and flexible trading strategies at least several of them should be used, as they all have disadvantages and the advantages of some compensate for the disadvantages of others. Among other things you should not forget about the fundamental analysis. No matter how full and proper technical analysis is, the influence of information on the currency market in the modern world is crucial, that is why you should follow all news and changes in the world economy in order to react to them in proper time.

Bases of fundamental and technical analysis Forex

FOREX trading allows both fast profits and substantial losses. Currency rates change based on certain regularities, and a trader will profit if he or she takes into account various factors and their influence on rates. There are two main methods used for forecasting market trends - fundamental analysis and technical analysis.
Fundamental analysis
Fundamental analysis reveals the reasons behind the dynamics of exchange rates. Currency prices are determined by supply and demand that are influenced by the economic conditions of a country, so macroeconomic reports, economic indicators, financial news, and social and political events affecting nations and the international community become the focus of this analysis.
Fundamental analysis allows us to evaluate the current economic situation and forecast the influence of events on the behavior of the currency market. The information that is important to fundamentalists includes central bank interest rates, government economic rates, political changes, emergencies (floods and hurricanes), unemployment, social problems, the state of the country's leading enterprises, as well as expectations and rumours, and other events that influence the value of the national currency.
Fundamental analysis is quite complicated, it is necessary to know the history of currencies which reflect complex relationships between countries in order to forecast the results of economic or political measures, therefore a fundamental analyst often needs an economics background.
Forex Technical Analysis
Contrary to fundamental analysis Forex, technical analysis does not reveal the underlying causes of fluctuations in currency values but rather analyses the market price itself. Technical analysis studies only one object, the chart, which is a visual representation of short-term price movements (from one-minute to weekly time frames) that precede future trades.
On such time frames the fundamental analysis is irrelevant, as the statistical data of a country's macroeconomic indicators is much rarer - once a week, once a month, etc.
Technical analysis supposes that the fundamental data that influence the exchange rate is already taken into consideration, so there is no need to analyse each of the indicators separately. Technical analysis assumes that future trends will be similar to how currencies moved in the past, as market participants will behave in a similar way under similar conditions.
Technical analysts also point out that rate movements are subject to trends. So if you can find similarities with the past situation on the current chart, it is possible to give a correct prediction about how the current decline or fall in the value of the currency will end up.
Fundamental analysis and technical analysis have in common the objective of predicting the direction of currency values, but they differ in their approach.
It is possible to trade forex successfully using only technical analysis, but the two are related. Advocates of technical analysis will always react to the news which causes the rates to fluctuate.
At the same time, even a one-week holiday of a fundamental analyst leads to the fact that he is not aware of the market situation, because during his absence there were new, unrecorded events. In this case, the fundamentalist can use charts, because they visually represent the market condition at the moment.
Fundamentalists usually look at the charts just before entering the market, in order to find signals of price increases or decreases.

Basic Indicators for Forex Trading

Sooner or later everyone who starts to trade on Forex comes to the conclusion that one cannot make money without indicators. It's hard to imagine a modern trader without these tools.
- Indicators are the tool, which facilitates market analysis. On the basis of them, thousands of strategies have been created and many of them bring stable profit.
There are a lot of indicators, and it is hard to choose the best ones, because much depends on trader's needs. Some traders trade successfully with Moving Average, others prefer flat currency pair trading using Stochastic, others use Bill Williams' indicators. There is no universal recipe and everyone uses whatever he or she likes.
When it comes to Forex trading for beginners, the main difficulty is choosing a technical analysis tool that suits your trading style. Let's start with the classification of indicators.
Three types of basic Forex indicators
The main forex indicators can be divided into three groups: trend indicators, oscillators and psychological indicators. Let's look at each group separately to understand what they are.
The trend is our friend
Trend-following indicators are used for determining the market direction. They are usually used for determining the trend for the medium or long term. Thanks to such indicators you may determine the market trends, find the turning points, monitor the new trends.
The disadvantage of indicators is their lag. It means that the market has already been actively moving in another direction, while indicators give out signals of an old trend. To this category of indicators can be attributed the following tools: Moving Average (moving averages), Bollinger Bands (Bollinger Bands), Envelopes and others.
Oscillator or search for critical zones
Oscillators are used where trend indicators do not work. When prompted by such an assistant, the trader anticipates the direction of the asset, which is located in a narrow range where the market is always volatile, moving sharply in one direction and then in another. It should be noted that the oscillator shows a slight lag and sometimes it gives a signal ahead, allowing you to enter the market before the momentum starts. Such indicators include Stochastic, RSI, Momentum, etc.
Psychology is our all
The third group is psychological indicators which defines the market participants' mood. Such an indicator will not give you the exact point of entry into the deal, but will help you understand the mood of the market around a particular asset. Psychological indicator can help you better understand the mood of the crowd and understand how an event can affect the pricing.
Despite the vast number of indicators and their differences, each tool is useful separately, and each can give good entry points into the market. By combining indicators, a trader reduces the number of bad signals by filtering them out, which increases the chances of a profitable trade.
Where can I download basic Forex indicators?
Most indicators are freely available. You can easily find them online by simply typing "forex indicators" in the search bar. Most of the indicators are free. There are, however, some for a fee, but these are exclusive tools.

Basic methods of Forex trading

In this article we will discuss possible methods of trading Forex. It is a question of methods in general, not tactics or trading strategies (trend-following, swing trading, etc.).
The easiest and most obvious way to trade Forex is to trade on your own as an independent trader.
The method is simple to understand but not to profit. It requires good trading skills, which include knowledge of the trading terminal, the ability to conduct market analysis, precise adherence to the rules of the trading strategy, i.e. strict discipline and much more.
The advantages of this method of Forex trading are clear - you are working for yourself. The disadvantages are obvious - time consuming, high risks, and high emotional load.
But this traditional way of trading is not the only one possible.
Some ways to earn on Forex
The variant of this self-trading is not exactly self-trading. To be more precise, trading "copying" or copying trades of successful peers.
Terminals have a function to copy trades of other traders. That is, an experienced trader opens a position, and your terminal follows his actions. Of course, it's easier, but it all depends on the success of the deals of the selected trader. It is difficult to find a real professional in the huge number of signal providers, so this method of Forex trading is as unprotected from losses as the first method we have discussed.
There is an even more radical way to simplify it - trust management. In this case the trading terminal is only needed to receive information on trading, while the trading is performed by the manager that you select. You entrust him your money, and he trades on it. Profits are usually split 50/50. Again, your money depends on the skill and integrity of the other trader. But all the responsibility is on him. But here too there is one big disadvantage. If the profit is split 50/50, then the losses usually remain solely with the account owner. Usually, after a critical drawdown or a completely lost deposit, compensation for losses is limited to the phrase: "you understand, brother....".
Instead of self-trading, you can use automated trading. It is carried out with the help of special programs, i.e. advisors, which fully substitute a trader, automatically conducting transactions according to predetermined algorithms.
Advantages of this method are clear - a person interferes in the process minimally. Disadvantages are less obvious. They include the risk of technical failure and risk of program error. Both lead to losses.
Of course, it is better to learn to trade on your own. Experience is experience, and as they say, you cannot sell or sell it away. But if you cannot do it yourself, you can try other ways of forex trading. The important thing to remember is that trading on financial markets is always a risk, and even the best trader cannot be secured from losses. Another thing is that their profit far outweighs their loss.

The basic principles of Charles Dow's theory

All modern trend analysis tools are based on the theory of Charles Dow - founder of Dow Jones & Co. In addition to being considered by traders around the world as the "father" of technical analysis, Dow also developed an important index, which is still relevant and working today.
He was the first to calculate the average price of eleven stocks, nine of which were railroad stocks. With time, this value evolved, eventually becoming the index that characterizes the stock market - the Dow Jones index. As for the principles of technical analysis, the theory of those days, although it seems simple even for beginners, is effective even nowadays.
Postulates of technical analysis by Charles Dow
1. The price takes into account everything.
In Dow's understanding, it means the price of a set of instruments.
2. The market has three trends.
According to Dow, these are three categories: primary (a trend of at least one year), secondary (corrective movements on a trend lasting from three weeks to several months), and minor (a secondary trend correction lasting up to three weeks).
In the modern sense, these categories are determined by the behavior of market participants:
- traders - those participants who open positions for several days; - speculators - those who buy currencies for periods ranging from three weeks to several months. This provides an opportunity to maintain a position for a longer period of time; - investors - those trading participants who open currency positions for many months and years, in order to optimise the formation of their investment portfolio.
3. the main trend has three phases:
a) the accumulation phase - a phase in which more experienced and informed investors, assuming that all bad news about a financial instrument is over and priced by the market, buy it;
b) development phase - the phase when a new trend has opened up and market participants have started to open positions on it;
c) the final phase - a phase in a state of "euphoria", an increase in speculative buying, accompanied by great public optimism, as well as by the media in relation to the financial instrument. Some who bought the instrument immediately begin to close their positions, expecting a market collapse. Most other participants, who do not think so, do not rush to sell.
The third phase can be considered the beginning of the first phase for the start of the move down.
The trends can be found on the charts at different time intervals. On hourly charts, fifteen - or five minute charts, which are most preferred by Forex beginners, the trend is always made up of smaller trends.
The daily trend is made up of smaller time periods which, like a matryoshka doll, include even smaller formations, and so on to the tick, the lowest price chart. It is worth remembering that the main, decisive trends are daily, weekly, and monthly.
4. The prices of the different sets of financial instruments should confirm each other.
A trend will be considered formed when it is confirmed by certain currency pairs. For Forex it means the price movement of the whole profile in one direction. For example - a simultaneous rise in the US dollar of the single European currency, the British pound sterling, the New Zealand dollar, the Australian dollar, etc.
5. Changes in the volume of transactions
Transaction volumes should be increasing when the main trend is in motion, and decreasing when the trend is going against it. For Forex this principle is little applicable, because there is no true information about volumes, while Forex beginners should know that the corresponding indicator on the terminal charts will at best show ratio of traders' instrument purchases - sales within this dealing, at worst it will be just a set of some marks.
6. A trend exists until there are clear signals to the contrary.
Trading in trend markets should always be in the direction of the existing trend. And it is always more likely that the trend will continue than that it will end.
This principle is especially applicable to trends in large formations - monthly, weekly, daily. Here, Forex beginners should not try to break such a long trend with a counter-trend order on a five-minute chart. Most likely, this position will soon disappoint them. The pullbacks and corrections in this case are workable, but first we should make sure that such correction has really started, and that there is a trend of a smaller time formation.
Anyway - the trend is our friend, and as a friend, it may hold us in a difficult situation, pulling out an incorrectly opened position, provided that it was opened in the direction of the current trend, even though wrong.

Basics of money management in Forex trading

Money management (MM) - money management, one of the most important components of successful trading at any exchange in general and Forex in particular.
Many beginners do not pay attention to creation of MM system, most of them studying Forex analysis, they mainly develop and modify the rules of opening and closing deals, looking for the only one correct algorithm, hoping that it will become for them that very "grail", the good news is that now it is easy to download forex strategies in different variants.
Meanwhile, it is on how well a trader can manage their own deposit, not only the size of future profits, but also the staying of a player on the Forex market in general, depends.
Basic rules of money management in Forex trading
Several simple rules, based on the experience of practicing traders, allow any market participant to create his own system of Money Management, which, if not for financial well-being, helps to prevent many mistakes and losses of the deposit.
Securing a position
- When trading on Forex, it is necessary to use Stop Loss orders and preferably place Take Profit orders.
These orders fix profit and loss of a deal. Placing of these orders reduces the psychological burden on the trader.
Some traders consider using of Stop Loss order unnecessary as its triggering reduces the size of the deposit and prefer locking the loss position into a "lock" (Lokk).
However, in order to exit the "lock" correctly, one should have considerable experience in trading on the Forex market and, moreover, not all trading platforms existing today allow one to do so.
Therefore, it is extremely important for a beginner on the Forex market to place Stop Loss and Take Profit orders immediately at the moment of opening a trade.
This is the so-called "position protection" rule.
- There is a lot of controversy regarding how many points from the opening price the Stop Loss order should be set.
After the collapse of the financial market at the end of 2008 the volatility of many currency pairs has increased noticeably, and today it is advisable to set the Stop Loss at the level of 50-70 points to avoid premature order triggering as a result of "market noise".
It is better to set the Take Profit order, focusing on support-resistance levels, provided the work on the medium-term timeframes.
The ratio between the Stop Loss and Take Profit orders is not necessarily 1:2, because in this case the Take Profit level can be higher than the daily average price movement. Though, with experience, the trader will come to decision of how to set protective orders basing on the graphic patterns of price behavior. The Forex analysis will help to do it. Therefore, the trader will not make decisions relying on abstract figures of the distance to the protection in points, but on the trade situation.
But if at this point of his work the player can't determine the significant levels for placing protective orders, he better put them according to a fixed algorithm, moving the stop after the price at the interval of time and distance.
Limit the risks
- One of the basic rules of Money management is to limit risks to 10% of the deposit.
Choosing a currency pair and lot to trade with using the Forex graphical analysis, the trader should limit his amount so that in case of unfavorable situation he could not lose more than a tenth of his own capital.
- Many experienced traders use the practice of building up positions as prices move in the direction they require. But this requires experience and knowledge. In a forex strategy for beginners, it is better to take one profitable trade to its logical conclusion than to unsuccessfully enter additional lots, where you can trigger stops from wrong decisions to wipe out profits from the initial position.
Think positively in trading
- Another important factor in successful money management is a positive attitude.
You should never enter the market when you are in a bad mood, excited or intoxicated. Remember that if you are unlucky today and a trade seems to be losing, you should never try to win back. Forex is not a casino. If the trader has miscalculated the dynamics of the price movement, it means that he did not take into account something or made an incorrect analysis of Forex, and emotions and excitement can only aggravate the negative consequences.

The benefits and harms of locks in forex trading

A lock (locking) is two open trades in equal volumes, in opposite directions (long and short trades), on the same trading instrument.
For example, you work with the EUR/USD pair. You have an open trade to buy. At some point you decided that the wrong direction, you do not want to close the deal with a loss, in the hope that it will close with a profit, but later, and not to increase the losses and thus earn, you have opened a sell trade with the same volume. This means you are "in the lock".
Traders get into a lock for several reasons. We have already considered one of them. The second reason is when inexperienced traders think that they will inevitably make profit by entering the market with a small take profit. And also traders enter a lock when there is a risk of losing the whole deposit.
The usefulness of the forex locking strategy is that with it, you can actually stop the growth of losses and earn profits at the same time. Locking a position is easy to use during a sideways trend by setting a "take profit" level. In this case, you need to keep the market under control.
If you are tired of being in the market, while your trades have not closed, you can, while being in a lock, simply do not set Take Profit, or Stop Loss, and allow yourself a rest. True, in this case your deposit will inevitably decrease in the amount of a swap (payment for carrying over the transaction to the next day). But nowadays it is possible not to pay the swap fee.
The harm of swap is that it dulls vigilance. Like a spider in a network, it draws the trader into opening new trades without waiting for the previous ones to close, thus encouraging financial discipline violation, inflaming the excitement and leading to uncontrolled situation.
By the way, many brokers encourage opening locks with certain incentives. Entering a lock is easy. But getting out of the lock is problematic, especially if you have entered the lock with a large gap. Competent exit from the lock is equivalent to competent entry into the market. Despite this, this technique is widely discussed in forex trading for beginners. Beginners like the ease and illusion of saving the deposit.
A lock that appears to be a lifeline can often turn out to be a boulder dragging you to the bottom. It is often easier to get a stop, pause in trading and start trading again than to get tangled up in lots.

Bitcoins - the currency of the future

The BitCoin cryptocurrency has been growing in popularity lately. Its emergence is a consequence of the development of new technologies, because progress does not stand still. Bitcoins represent a new generation of digital currencies, they were developed specifically for Internet payments and work only here. This currency does not have any controlling authority, including it is not controlled by the state.
Bitcoins operate worldwide and anyone can use this currency. In order to do that, you have to install a special program or use a bitpay web wallet. This way you can connect your computer to the shared system, where you can exchange Bitcoins with other participants.
Bitcoins have a number of features. The system is anonymous, you don't need to enter and confirm your personal data when registering your wallet. Transfers between members of the system can't be tracked. You will be able to see the transaction itself, but not the participants. All transactions are executed with high speed.
The technology is decentralized, that is its main advantage. All transfers between participants are made directly and do not require validation by any central authority in the system. Bitcoins are not controlled by the state or by private banks.
The system has a deflationary development model, meaning it is not subject to inflation. Bitcoins are issued with a limited issuance of no more than twenty-one million coins. The speed and complexity of this process increases over time. As the virtual currency becomes more and more popular, there will soon be a shortage of it. If there is a shortage of currency, the exchange rate will increase.
You can make payments using a special client software installed on your computer. You can also create an online wallet, unlike this program, it does not take up space on your computer. It is very convenient to use, and you can access the wallet from any device connected to the Internet.

Bitcoin trading on forex

Bitcoin started its history in 2008, when a small group of programmers, or maybe just one person, as the information about the developers is still a secret, created an innovative technology for storing and transferring information. It is reflected, above all, in bitcoin as a method of payment. Although we now know that such developments are useful not only in financial transactions, but in many other areas as well.
Now bitcoin and numerous cryptocurrencies, which appeared later, attract attention, first of all, as a tool for generating fast income of dozens of percent within a few weeks. Judge for yourself, since May this year, bitcoin has almost quadrupled in value, moreover, the potential for further growth is still there.
While the pessimists see cryptocurrencies as a big "financial bubble" that is about to burst, the traders who bought in time are counting their profits.
Bitcoin: another bubble or a special financial markets asset?
If you look at the chart, you can indeed see signs of massive overbought in the daily TF, but we should not forget that bitcoin is rightfully considered a special asset. It has earned this status not only because many people call it the backbone of the financial system of the future, but because of a number of other factors.
1. The initial impetus for bitcoin's proliferation was the anonymity of payments. It is useful for those who are tired of the bureaucratic delays of the banking system and want to use settlement tools with lower fees.
2. The technology itself provides significant support for the growth of quotations, as according to it the finite number of coins is limited - no more than 21 million bitcoin units can be created.
3. Moreover, the complexity of obtaining new bitcoins is increasing day by day, meaning that more and more computing power is required to do the job. As a consequence, the supply decreases, which means that, as follows from the simplest laws of economics, the value of the cryptocurrency that has already appeared must increase.
4. Finally, perhaps the most important factor is the psychology of traders. When a particular financial asset starts to rise sharply in value, even the most conservative market participants tend to take advantage of the trading opportunity by starting to increase the volume of positions. Trading decisions become a result of emotions instead of analytical calculations, at the same time volatility starts going over the top.
That is, preconditions for further growth in cryptocurrencies remain in place, although a correction may occur at any time, as there will always be those willing to lock in profits and close part of their positions when historical highs are updated.
An additional growth driver could be interest from investment companies and hedge funds, which are not yet legally able to fully handle digital assets, but have a great desire to participate directly in these trends.

Break-even forex trading

As a rule, Forex trading for beginners is inextricably linked to the hope of finding your Grail by all means.
It is doubtful that anyone was able to do it. In any case there is no supporting evidence of a 100% lossless trading system used for gaining profit on Forex nowadays.
Most likely, break-even Forex trading is a myth, a dream, which has about the same chance of realization as when you are looking for pirate treasure or Incan gold.
But let us not jump to conclusions and consider the matter in more detail.
Lossless Forex trading
Very often you can see on the Internet advertisements that offer to buy some contrived strategy that guarantees a win-win Forex trading. In most cases the advertisement is meant for an uninitiated person or a beginning trader.
But the reality is that in trading activity the trader always proceeds from probabilistic correlation of risk and profit. The risk in this case implies a possibility of getting a loss of some kind, which means that one cannot count on a 100% lossless trade. One can only speak about reduction of risk component in trading and, as a result, increase of profitability of the trading system.
It is typical mistake of a beginning trader to hope that break-even trading is possible. That is why after starting to work with some forex strategy and successful completion of some deals they start to think it will last forever. But the loss does not take long, and panic sets in, as a result of which the whole trading turns into a nightmare, and the trading system is considered to be useless.
All this happens because the trader has not been warned of the possibility of losing, the fact that any trading system involves the presence of profitable deals and deals completed with a loss.
If you are aware of it, you can calculate the risk component present in one or another trading strategy and based on this you will reach the level, when trading will not be a win-win, but profitable.
How to calculate the risks of a trading system
1. Firstly, it is necessary to check the trading strategy based on the market data in the historical perspective. Thus for a certain period of time it is possible to get statistics of trades that could have ended in profit and trades that ended in loss.
2. As a result, on the basis of the obtained information the calculation is made. Knowing the amount of price points of profit and loss, you can determine the percentage of profit of the trading system.
3. If the obtained value of the risk is satisfactory for the trader, he/she should definitively check its performance by testing.
Test analysis of the trading system
To really determine the profitability of the trading system and specify the possible risks of its usage one has to test it. As a result of such testing you will get
- An idea about the real ratio of risk to profit.
- The number of trading signals, clearly visible on the chart.
- The final decision as to further use of the trading strategy in the Forex market.
As we can see, we should not expect miracles in Forex trading activity. You should not rely on a super strategy that supposedly allows you to operate in the market without losses, but on your own strength and the ability to correctly calculate the possible risk of trading and the possible profit.

Buying forex trading signals. Harm or good?

Forex trading is definitely an individual endeavour, which does not require outsiders, teams or creative alliances to conduct trading operations. Every trader opens positions, tracks them or exits. Of course, no one cancelled the communication between traders, because it is always interesting to hear others' opinion about the market situation, and one wants to share his or her own view, but in this case it is not necessary. Every trader, as an individual sportsman, wants to finish first, without looking back at other competitors.
The more so, all textbooks and training materials remind that in order to trade at the currency market one must develop his/her own system, trading signals of which are the only guiding light for a trader. But what to do if you do not have enough experience to develop your own trading system or, what is worse, your real Forex trading system brings only losses and your deposit is rapidly diminishing? Individuality in trading, besides clearly positive qualities, also has negative aspects. For the most part, beginner traders have no one to consult with and no one to learn from. The more so that one also need to know whom to take over experience from. And the proven services that provide trading signals may be good enough for this purpose.
After all, in modern life we often use the services of professionals, and it does not detract from our personal qualities. It has long been the case that we are more likely to entrust car repairs, plumbing repairs, home appliance repairs or responsible travel to those for whom this is an everyday occurrence. It is the same with forex trading, where there are long and successful traders who sell their own trading signals to anyone who wants to trade.
Prices in this sector of services vary greatly, as well as the number of instruments offered for analysis and time intervals of work, which allows you to choose a suitable service. Naturally, Forex trading signals should be purchased only from trusted, reliable sources. Dependable sellers, as a rule, have a history, which they do not hide. Here you can see all trades performed by traders of this service over a certain long period of time. And not all deals of this history should be profitable. This is a normal phenomenon. The absence of losing trades in the seller's performance is most likely a hidden fraud, because there is no perfect one by default.
The other variant is the ratio of profitable trades to loss-making ones. But, as a rule, this ratio is quite decent for professionals. Of course, it would be good to discuss the quality of some or other services on thematic forums or in personal communication with traders who have already had experience with a particular seller. You should not rashly rush into the arms of the first service you see, so that you don't have to worry about it later. It is enough to set a goal to search, and the decision will come.
But most likely, the reluctance to buy trading signals lies in the trader's subconsciousness. Considering yourself as an Internet Entrepreneur, it is somehow embarrassing to ask even for a paid opinion of someone else. And this well-established misconception makes the player lose one deposit after another, without trying to find ways out of this situation by widening the horizon of his horizon a little. Although, it should be noted here that the purchase of paid trading signals in no way affects the development of trader's own working Forex strategy. Moreover, trading signals make you think about their nature and help to identify the regularity of their appearance.
No one forces a trader to sign up for trading signals forever. Often a month is enough to balance your psychology and think over your future work on Forex.
To summarize, we can say that, despite the individuality of trader's work, you should not focus solely on your own problems. Problems need to be solved and whether you solve them by yourself or with the help of more experienced traders is not important; the main thing is to make your business pay dividends and Forex trading is the most real business.

Choosing a trading system: buy or create?

The necessity of having a trading system when working in financial markets is an axiom that does not require any proof. Every successful trader has his/her own unique Forex trading system which they use as a reliable tool for gaining regular profits on the currency market. It is also obvious that all those who "dropped out of the game" either did not use an elaborate trading system or did not use it at all, relying on blind luck.
The first question every trader should ask himself/herself before entering the market is: Should I master a trading system of this or that successful trader ("guru") or develop my own model? The answer to this question is not straightforward.
In favor of the second option, it is worth saying that a proven Forex trading system - despite the fact that it can be broken down into its component parts, like any simple mechanism - is still the work of another person and in its essence reflects the thoughts and psychology of its author.
Secondly, your investment ability at the initial stage can differ significantly from the capital that was involved in the success of the studied trading system - and it means that you will have a completely different risk accounting than the author of this system.
Finally, thirdly, it is worth taking into account an important psychological factor. Although a trader's main virtue is known to be a cool head, each player uses this head in accordance with his or her degree of individual vitality: someone is aggressive in market, making fast deals, and someone is cautious, relying on the market conditions within long enough time intervals.
But! How long will it take Forex beginners to create their own product from scratch? And it should be a profitable strategy for beginners, which is guaranteed to bring a certain income in trading. Does an adept have enough knowledge for this creative work? One can spend years developing new solutions usually discovered by others and end up in a creative dead end. How do you know if the author is heading in the right direction or if his work has already been tried and even rejected by others?
In my opinion, it is better still to use someone else's, but a proven track record. And it should not be a purely technical solution to the problem of obtaining a ready-made trading system. It will be much more effective to find the author of the system and receive training from him. In this case the beginner will understand the process algorithm much faster and will build up trading skills with minimal risk of losses under the control of a more experienced colleague.
Nowadays such opportunities are available to a beginner. Suffice it to recall the well-known trading systems such as "Extra", "Three Indians", "Vegas Wave" and others, whose authors conduct specialized training and give excellent material, which is called from "A" to "Z". In addition, traders, having completed the training course, continue communicating with the developers of methods on specialized forums and chats. And this, you must agree, is difficult to overestimate, especially in the period of trader's development.
I have collected interesting, reliable trading systems on a special page, where you can read descriptions of them and choose a solution according to your personal preferences.
And only after the trader has received such an education, he can decide whether to focus on developing his own Forex trading system on the basis of the studied material or to stick to a well-tested method.
In any case, it is necessary to remember that the main points of the system should be such parameters as: choice of filters reacting to market signals, choice of stop-signal placing method, formation of strict conditions for market entry and no less strict criteria for deal exiting.

Contests and bonuses from forex brokers

Forex trading is very popular because of its high potential profit. But only potential profit!
There are many dangers associated with foreign exchange trading, and each of them is associated with loss of money. However, all these do not stop newcomers to the currency market from making sometimes risky trades, although a good profit can be made by using forex bonuses from the brokers of the market.
To receive Forex bonuses without deposit one must be aware of demo-account contests held by different brokerage companies, which pay real money reward. Brokers often organise trading competitions and sometimes offer very lucrative prizes. Forex bonuses in 2015 consisted of luxury cars, tourist trips or a few thousand dollars available for withdrawal, although usually expensive gifts are present in real account contests.
Nevertheless, it is quite common nowadays for large brokerage companies to develop investment projects for which they need traders who know how to trade. The selection of participants is usually done through competitions, and at each stage traders can have different tasks.
The second risk-free variant of the profit without the deposit is affiliate programs.
Brokers offer a commission (a part of the spread) to their partners who refer new clients to them. Sometimes it is 0.7 pips per lot. That means, a company gives to its partner a greater part of spread from trade of the trader involved with partner.
Partnership reward is accrued daily and can reach several hundreds or even thousands of dollars per month, which afterwards, according to the rules can be withdrawn in any convenient for a client way or deposited to the deposit for the next trade.
Besides, nowadays most brokers offer one-time remuneration for attracting new clients. The amount of such payments is negotiated when concluding a partnership agreement.
As for the deposit bonuses there are a lot of them now. For example, a broker pays a percentage of profit as a bonus if a trader trades with a certain lot size during the stipulated period of time.
Another type of bonus offered by Forex brokers is a free provision of a certain amount of money. Or a free trading account funded by a small amount of bonus. For example, a broker may put $50 free on the trading account of new clients if they complete all the paperwork when registering. This bonus can usually be withdrawn after trading a certain lot size.
So in order to profit from the forex market, you don't have to sit all day at the trading terminal. You can watch different contests and bonus campaigns of the brokers and gain experience, as well as build up your capital.

Criteria for choosing a forex broker

In order to work at Forex a trader has to make an agreement with an intermediary or in other words - a brokerage company, which has the right to introduce the participants of the market to the world system of trading at the financial markets.
There are many brokers on the market claiming that their conditions are more favourable than those of other companies. Therefore, for a beginner it will be not easy to find a really worthy representative among this abundance of firms.
The first criterion for choosing a broker is reliability. As a rule, this criterion can be determined by the credibility of the broker, his experience in the given segment, availability of liability insurance, license and capability of legal settlement of complicated situations.
Information on specialized forums, reviews of brokerage companies, various ratings can help a novice in this, unless they are ordered by some company, so it is better to collect this kind of information on the websites of independent bloggers.
The second criterion is the size of the down payment or deposit. This is the amount of money you need to deposit to open a real trading account. A lot of traders start their business by risking minimal amounts of money. This makes them look for a broker where they can work with a low deposit size. This approach has its positive side, but it is only effective for those who actually have a small amount of money to risk in the Forex market, as the profit from such investments will be corresponding. A serious broker usually raises the bar for entering the market, preferring to work with cash clients rather than dissolve into the hustle and bustle of "cent magnates". There are even less companies that are able to provide the same friendly service to small accounts and big traders' deposits.
Then there is such an indicator as spread. The wide spread - or the difference between the buy and sell price of an asset - is a large sum of money that goes from the trader to the broker after every trade you make.
You pay a commission regardless of the loss or profit you make on a trade, so you should choose a broker that offers the most competitive spreads.
You also have to consider that some brokers offer fixed spreads, while others offer floating spreads, where its value will depend on the currency market situation.
Next, note the system of depositing and withdrawing funds. A broker should not prevent you from closing a trading account if you are not entirely satisfied with it. A broker is just a custodian of your funds, so there should not be any unreasonable refusals or delays in applications for withdrawal of funds.
In addition, leverage is an important criterion. Its size - this is an important factor to consider when choosing an intermediary. It may vary from 1:1 to 1:500. Everything depends on the broker. Naturally, with higher leverage your profit will be bigger. But do not forget about losses, which will also be proportional to the size of the selected leverage.
Also take into consideration the trading platform. For successful trading you should choose the brokers with the greatest automation of the trading process and minimum human intervention. This is only possible if the broker has a reliable and proven trading platform, which must have a high speed of information processing and stable communication channels. Also, the trading terminal should have current forecasts, analyses and constantly updated political and economic news.
The next factor influencing the choice of a broker is the type of accounts. Many brokers offer more than one type of account. However, there are also brokers who have one package with a lot of options to configure. The number of these types is basically not that important as long as the company provides customizable terms with different leverage and spreads that suit the client.
You should also consider what range of traded currencies the broker offers and how responsive and reliable the support service is.

Currency pairs and the correlations between them

In this article we will talk about what is behind the term "currency correlation" and what currency pairs are. Let's begin in order.
Correlation is the connection of values which mutually influence each other.
It should be noted right away that the relationship is statistical in nature. For example, the weather caused the loss of crops, and this led to an increase in the price of bakery products.
However, it is not as simple as that. Through the policy of state regulation additional grain stocks are allocated, which stabilises the price. This is where the static correlation comes in. You can't look at correlation as a fixed value, especially when we are talking about currency trading.
Currency Correlation in Forex Trading
So there we go smoothly into the issue of currency pairs. Very often we hear in the news that the currency of a certain country is either decreasing or increasing. The notion of a change in the value of a currency can be associated with anything, but the simplest comparison is another currency. The currency in relation to which the currency in question is rising or falling.
Interestingly, one currency can rise in one pair and fall in another. This is the essence of currency pair correlation. If you know the relationship between the various pairs, you can make predictions in order to deal more effectively with the selling or buying of currencies later on. To evaluate this criterion, the appropriate coefficient is used, which can vary from one to minus one.
The correlation coefficient for currencies
If the correlation coefficient = 1, then the currency pairs exhibit synchronous behaviour, they behave in the same way. If the coefficient is close to -1, pairs move in different directions, which causes mutual losses and profits.
It should be remembered that a negative correlation value is also beneficial. If you know the trend, you can make forecasts about the currency pair behaviour and work with opposite contracts for the analyzed pairs.
If the correlation of a currency pair is near 0, the relations between them will be built in randoms, in other words statistics does not work here.
Finally, it should be noted that correlation of currencies under almost no conditions reaches extreme values, it is constantly changing.

Do I need a stop loss on forex?

Reasons not to set a stop-loss
As we know, Forex traders can be conventionally divided into two groups: those who set stop-losses and those who do without protective orders, explaining their reluctance by the following reasons:
1. The price is bound to catch a stop and then it will follow my trading strategy; 2. I remember about levels and I can close manually at any moment; 3. The lot is small, so I am able to withstand drawdowns easily; 4. I start to get lucky.
What is a stop loss and what is it used for?
- Stop-loss is a protective order, which forcibly closes trader's position if market goes in opposite direction from the scenario, thereby limiting losses by a specified number of points.
That is, in terms of functionality - stop-loss is a trader's assistant and protector of his deposit from unexpected losses.
The currency market is rather dynamic and very often beginner (and not only) trader can lose his deposit in one single deal, especially if a leverage provided by broker is ridiculously large.
Many traders, working in short-term mode or using scalping strategies, think they are ready to stop the losses themselves at any moment, manually closing the position. The practice shows the opposite. Rarely will a trader hit the stop button on time. Usually in this psychological argument "to close or not to close" greed and hope that the market will "change its mind" and go in the right direction wins.
But there is no trading discipline, there is no profit. It is known that one of the most important criteria for determining the volume of the trading lot is the distance to the protective order. The further the stop loss is set, the less money should be used to enter the trade. Therefore each trading strategy should have a clear set of rules for setting a proper stop.
A far off order, if not calculated correctly, will not prevent a position from losing, but the loss will already be quite noticeable (which is why it is recommended to reduce the volume of the trade), a close stop will surely be taken away, which will also cause a minimal loss, albeit minimal.
Professional traders know how to set a stop-loss so that it, on the one hand, will protect the deposit in case of an incorrectly opened trade, on the other hand, will not work against elementary market noise.
It is noteworthy that the common way of setting protection above/below the nearest maximum or minimum mark, as well as near support or resistance levels is not entirely correct due to frequent false price breakdowns in one direction or another.
The algorithm of preliminary calculations of the deal should be considered in the following sequence:
1. Determining the direction of the current trend;
2. When trading using volumes, in addition to this, the volume needed for entry is determined;
3. Marking the level for setting protective orders;
4. Calculating the lot size based on the percentage of deposit funds involved and the distance to the level of protection;
5. Entering the market according to the trading system signals.
Have a profitable and successful trading!

The forex economic calendar: why you need it and how to use it

Trading on financial markets is only 1% luck and intuition and 99% knowledge and awareness. Success in trading is based on making of forecasts on movements of assets, which seems to be chaotic and unpredictable, but in fact follows the general rules of market.
The economic calendar was created for traders to keep abreast of key news and events at the market. Everyone who wants to trade on Forex has to be able to use it, but it is better to study it attentively.
What is an economic calendar?
All trading assets - ranging from currency pairs to oil and gold - are exposed to general economic external factors such as inflation, unemployment, changes in credit rates and so on.
changes in lending rates by the central bank and many other things. All of these non-obvious things ultimately affect any market commodity offered to other participants. Given that we are all participants in an endless trade, exchanging our money for goods and services, these indicators also affect us and are especially important to forex traders, for whom trading is a profession.
The economic calendar is a summary of financial and economic indicators of countries around the world that affect the market value of exchange-traded instruments:
currency pairs; raw materials and precious metals; stock indices; stocks and securities; cryptocurrencies. A summary of the economic calendar can include a variety of events, and the task of a trader is to interpret the information received correctly and use it in his or her trading strategy.
Important events in the economic calendar
The calendar is not a difficult thing to do, as long as you learn how to filter the events according to their importance for your trading strategy and assets, so you can buy or sell at a good price. The following indicators deserve close attention in the event summary:
economic growth parameters; inflation index; the Central Bank interest rate; unemployment rate; increase in real estate sales; retail trade turnover; fluctuations in the value of securities. The most important indicator remains the level of economic growth, which to a large extent determines the dramatic financial changes in the stock market and global trading market.
It is made up of three factors: consumer opportunities, investment and fiscal spending which together determine the growth rate of a nation's economy.
The indicator is published monthly with revisions after 3 days and 10 days from publication, so it is important to take into account the adjustments made at these points. The indicator should be used very carefully.
If a decline in purchasing power takes place over a number of months, trade volume will also fall and with it output, which will have a negative impact on the country's national currency.
Inflation arises when demand exceeds supply and drives up the cost of goods and services, negatively affecting purchasing power. Sometimes it is caused by rapid economic growth and is low, but when it is several times the rate of growth, one can expect currency depreciation and economic chaos.
Slightly less important will be the Central Bank lending rate of commercial banks, an increase of which will reduce purchasing power and negatively affect the real estate market by increasing the value of this indicator.
Other indicators like unemployment, the price of securities and retail trade turnover have varying degrees of influence on the Forex market, but not as much as the first three factors. They should be considered depending on the chosen asset and strategy, taking into account its urgency.
In short-term strategies, you can ignore changes in inflation or economic growth, while news, statistics or statements of the Head of the Central Bank can greatly affect the value of an asset.
Medium-term and long-term trading strategies are more demanding when it comes to the economic calendar, and they require consideration of all factors, even if their significance is not obvious.
Bottom line
The economic calendar is an important and effective tool in the arsenal of every Forex trader, who wants to be successful and earn stable money trading the market.
Scattered and varied information does not allow you to follow all events from primary sources, but the calendar gathers all data into one summary, giving you concise information about the most important things. Only by learning how to use the economic calendar, a trader will not get lost in the complex world of finance and stock trading.

Emotions on the forex market

It has been repeatedly said how emotions can affect the performance of a Forex trader. Often it is the trader's inability to control his passions that is the main reason why he cannot become successful in trading.
This is not surprising, because when guided by emotions instead of logic, the number of errors increases in direct proportion to the progression.
But what can you do? Any trader is first of all a man, not a computer program, so emotions are no stranger to him. So, what does a trader need to feel comfortable working on Forex market?
First of all, it should be a comfortable lot size that is also called a trade position.
After all, "big money" has its own meaning for everyone. For some people five hundred dollars is the amount of money they will work for a few days, and for others it is not worth leaving their homes for.
When it comes to Forex trading, this criterion becomes more apparent. Here is an example.
Let's assume that there is trader A on the exchange. This trader trades with a small lot, for example, 0.2. So, his deposit grows and grows slowly from month to month. And at a certain moment, the trader looks at his trading history and begins to think that if he had his own brilliant Forex strategy, he would trade not 0.2 lot, but the whole lot, for example, then he would have much more money. And the money to increase the lot is already on the deposit. And A starts to trade with the whole lot, but there is no profit, rather the opposite. Why does this happen? After all, if he had traded the old way, 0.2 lots, he would have earned a handsome sum.
The point is that as the lot size increases, the probable profit increases, and with it the probability of loss. In other words, the risk has increased. So, the trader gets anxious and starts making mistakes that he or she would not have made if he or she had worked by the old, comfortable for him or her financial scheme.
Based on the above example, we can conclude that every trader needs to know the acceptable level of risk at which he or she can trade with the maximum comfort. If the trader exceeds the level set for him, it may cause the opposite result instead of the expected profit.
But it cannot be said that when trading at the currency exchange market one should put aside all emotions and be guided only by logic. For successful trading you need a well-developed intuition.
Usually, in addition to technical analysis, traders are bombarded with an unrealistic flow of information and news in the form of economic reports and expert comments that even the reading of these reports is a very difficult task, especially for beginners. Not to mention the detailed analysis of the received information. This is where intuition is particularly useful for a trader as part of his Forex trading strategy, because it is often intuition that helps find the right decision in a nonstandard situation.
So what does one need to be successful on the currency market? Undoubtedly, it is a tested trading system, an algorithm of which a trader unconditionally uses in everyday trading, putting aside emotional background and doubts, plus intuition, an ability to determine the main thing and cut off the secondary, as well as an invaluable experience, which, as we remember, "the son of many mistakes".

Exchange traded funds (ETF) for small and medium investors

Most of the capital of small and mid-sized investors over the past 2 years has been invested in ETFs by sector in the US economy. Previous instruments, such as individual stocks and short-term forex trading, lost interest among investors as they required more focus on trading and information analysis. The global balance of power in this market has shifted and it is important to understand why.
To begin with, we need to be clear about how ETFs are viewed by individual retail traders, but not by institutional investors. It's also interesting to see what obvious (and hidden) benefits can be gained by investing in ETFs.
What is an ETF?
An ETF is an open-ended type of investment fund which can be freely listed on exchanges, like stocks or futures contracts. An ETF is a portfolio consisting of stocks and other assets (oil, gold, currencies and commodities) that are grouped according to their sector, industry or market (S&P500, stock indices of other countries). When you buy or sell an ETF, you are trading the entire "basket" of assets that make up that ETF.
The SPY ETF is legitimately considered the most liquid and popular ETF because it follows the dynamics of the S&P500 index. When you buy a SPY ETF, you are investing in the S&P500 index. This explanation is simpler and more correct.
A sector ETF (an ETF formed by a specific sector of the economy) is a diversified portfolio of stocks that consists of the best stocks of companies in that sector with stable dividends and less risk.
Simply put, an ETF is a convenient way to invest if you don't have the skills or time to build a diversified stock portfolio for yourself and considering investing in only one or two instruments is too risky.
This way of investing can provide good dividends and, given current market conditions, increase asset value (respectively earnings).
Small and medium ETF investors
Small and medium investors can be divided into 3 main groups. The main difference between them is the volume of investment.
The first group, the largest, consists of investors with small amounts in their accounts. For the most part, they work manually on an intraday basis. Traders who use automated trading systems are also included in this group.
For traders in this group, the ability to trade instruments such as SPY / UVXY / NUGT etc. gives access to highly liquid and volatile intraday trades in the first place. Another important aspect is that spreads on the most popular ETFs range from 1 to 3 cents and the volume-based commission is lower than that required for transactions in conventional indices.
An important advantage for this group is the following: when trading currency pairs, traders cannot use all possible speculative strategies due to the nature of their movement, but ETFs allow for a wide range of trading algorithms, especially for accounts with small deposits. Unlike popular currency pairs, ETFs allow trading with trends that last for months or a year, for example, rather than just a few hours or just a week.
At the moment, traders in the first group are beginning to trade with ETFs, which were previously unavailable to them due to small deposits in their accounts. Statistics show that the number of new ETF accounts will increase like an avalanche. We can expect ETFs to become as popular as currency trading in the near future.
The second group of small investors is the one to pay more attention to. It is the target audience that sees the true value of these instruments. This group is fairly stable when it comes to the amount of money in their accounts. The group shows the following trends:
- Traders use more sophisticated automated trading systems (compared to the first group). - They use services to copy trading signals. - They invest in ETFs based on specific economic sectors or assets (gold, oil, currencies and commodities). - The benefits of choosing ETFs as the primary trading instruments used in trading for the first element of the aforementioned list are similar for the first group of investors.
Finally, the third group of investors (as opposed to institutional investors) consists of investors with large sums of money in their accounts.
Most of these investors prefer to invest rather than speculate. In addition to the ability to invest in various industries, commodities and currencies in the form of ETFs, there is another benefit that ETFs have: they offer protection for open positions when major market indexes experience corrections or when markets undergo stages of increased volatility.

Forex trading failures

All traders have lost their funds on the currency market at least once. You may learn profitable Forex trading only after several years of practicing with real account. Besides, it is a long and consuming process. Unfortunately, only few traders are successful.
All beginning traders can be divided into 4 groups.
1. Lovers of easy money - people who registered on Forex for a quick profit. However, such traders lose funds fast, though they are still of the opinion that it is possible to earn on Forex market easily and quickly, but they are not so lucky.
2. the people who gave up. This group is the biggest in number and comprises practically all beginning traders as well as those who have stopped half-way without achieving the desired goal. A person may give up trading after many years of unsuccessful trading. When they already have experience and a well-established mindset in relation to Forex, but in spite of the years spent, they still have not found their own style of trading.
3. people who have realized that this occupation does not suit them. This is actually a strong category of people because they have enough strength to admit that Forex trading is not for them. They can forget about currency market as soon as they found out about it. Such people are not many, but they are there.
4. Persistent and stubborn people. This group succeeds to reach the set result and never give up. Just such traders are able to reach the goal as nothing can influence their decisions but themselves
The second group outnumbers the rest. It is this group, interacting with the first one, spreading negative messages about Forex being a fraud and a swindle.
No matter how much time may be spent on unsuccessful days in forex trading, one should not give up in any case. If you stop, the experience you've gained can be uselessly lost. Then it will turn out that all actions were in vain. But, you have to remember that Forex trading is a business, and any business is far from paying off immediately. You have to learn, work long and patiently, and eventually the market will begin to bring profit. Otherwise, there is no other way!

Forex: A way to get rich quick or a scam for intellectuals?

Today there is hardly a man who has not heard anything about Forex currency market, although ten years ago trading currency pairs was a surprise and incomprehension for the most part of common people. Nowadays times have changed, vast advertisement on services of different dealing centres is poured by the river from all types of media, but the attitude to Forex, as a way of Internet-entrepreneurship, among most of our fellow countrymen is somewhat peculiar.
Trading: easy money or another scam?
Some of them sincerely believe that by trading currencies one can get rich quick without making any efforts because the most important question for the trader is how to withdraw money from the broker and that is all.
Others firmly believe that Forex is a kind of online casino, or simply put - a scam, where everything is set against the player, and a rare win depends more on blind luck of the trader, rather than on his professional qualities.
Of course, both opinions have the right to life, but, apparently, the truth lies exactly in the middle of these polar judgments.
Is it possible to earn on Forex?
Is it possible to earn by trading on Forex?
Of course it is. But one can argue about the speed of this enrichment, especially in the way of characters of Russian folk tales, i.e. lying on the cooker. Just as the opponents' view comparing Forex to another kind of Internet gambling is not sinless.
Is it necessary to be lucky in currency trading? Absolutely. But to an even greater extent, a gambler needs knowledge and skills that are acquired through a long process of professional training.
What do adherents of opposite views on Forex actually have in common?
Disbelief in the fact that this type of activity can be classified as Internet Entrepreneurship. The lack of understanding that Forex trading is a peculiar business, which goes somewhat beyond the traditional scope of this definition.
Forex trading is a complicated kind of Internet entrepreneurship
Like any other business, forex trading can be done in different ways.
The first and the most common one is that a trader, who made up his mind to devote himself to this type of business, had to thoroughly study the subject of application of his own efforts. This law is not new and is the same for any type of business. Amateurism is dangerous in any business and Forex, with its dynamics, only speeds up the process of bankruptcy of those who decided to brazenly reach the tops of fortune in this type of activity.
In any business individual becomes a professional only after years of learning the profession, practical work under the guidance of more experienced colleagues, and, a constant process of self-education.
Another type of forex earning strategy is the investor's way, which does not require thorough and profound knowledge and is more designed for professional work of engaged performers. Naturally, here as well you need to be aware of the scope of application of your own capital at least to be able to professionally select worthy workers or special service providers.
This way of trading at Forex implies two options: to give their capital management through so-called PAMM accounts, which is also quite risky, or trade independently, by purchasing different systems or expert advisors from real professionals of online trading.
The excellent help in such trading are the services that send trading signals. Naturally, such services should have a professional status and an excellent reputation. But thanks to the Internet, all this is easy to check and find out.
Naturally, a trader has to give part of his profits to buy trading signals, but on the other hand he protects himself from his own rash actions with this money and overcomes the psychological aspect of Forex trading.
Both types of development of individual forex trading have their advantages and disadvantages, but, in any case, to be successful in trading, one first has to invest a certain amount of money either in his education or in a service provider company.
Everyone decides for himself what suits him better, but overestimation of own strength, especially at the initial stage, severely punishes the newcomer, first of all, financially, regardless of the social status of the loser.
This is the harsh truth of Forex trading, a difficult but fascinating kind of Internet Entrepreneurship. For lovers of easy money Forex will always be a scam.

Forex analytics and news

Why do you need analytics?
Traders who trade on the financial markets can confirm that it is impossible to trade without detailed analysis of the market situation. Professional analytics helps to achieve the goals in trading on the currency market. Financial market participants, who want to earn good money, have to be aware of all market developments and this helps to track further price movements. But what can you do when a lot of economic data is released every day? This is where up-to-date forex analytics can help you. Comparing the analytical information with your own vision of the market will help you make the most objective decision about the current situation.
Professional forex analytics includes:
General overviews of the major financial markets. Economic calendar. Detailed description of macro and microeconomic statistics that can affect financial instruments. Trading recommendations.
Forex analytics and news for beginners.
Forex analytics for beginners is the main fundamentals for trading. More experienced traders may use this material as an additional source of information to track the current market situation. Analytical forecasts help identify the current market situation. Daily analytics are provided with trading recommendations and comments, market dynamics, economic indicators, as well as technical tools that help in determining the price movement.
In simple words, forex analytics is a combination of fundamental and technical analysis that can provide good results when combined. Fresh forex analytics allows you to keep abreast of all market changes and trends, which helps in predicting price movements. By comparing your opinion with the information provided by expert analysts you increase your chances of making an objective decision.

Forex currency trading. Everyone wants, but can they?

All would-be traders have their own motives for taking up forex trading. However, whatever our differences, there are only 4 main reasons that drive people to enter the forex markets.
The main reasons to trade forex currencies
They come down to the following objectives: to make big and easy money, to have a thrill (called excitement), to have an interesting and exciting occupation (hobby - job), to have a permanent (and main) source of income.
Determine their intentions is extremely important, because in the future, everyone will get exactly what he wanted. Seekers of "windfall" money waiting for another disappointment. Those who like to tickle their nerves will get a constant source of emotional ups and downs.
Forex trading is often equated to gambling as well as to intellectual games. It all depends on a person's approach to trading. That is why people who like to solve complex problems will find on financial markets a lot of hard-to-solve "puzzles". And if you've decided to make money in the markets, then you need to understand how incredibly difficult it is on the one hand, but on the other hand you need to understand the opportunities that online trading opens up for you.
Trading currencies is a business
If you are ready to invest your time, effort and money in this activity - only then you will have a chance to be among the "few". But be aware that despite all your "sacrifices" the markets can prove to be "stronger".
It is every trader's dream to be successful in the financial markets. But the peculiar conditions in which one has to work initially divide people into several groups. Conventionally, people in group A are "more adapted", people in group B are "less adapted", and people in group C are "totally unsuited" to trading. It should be emphasised - for profitable trading.
Anyone can work at markets, but it is only natural that an "amateur" will trade at a loss. To put it simply, he will only lose money, not earn it.
Can everyone trade on Forex?
So what distinguishes one group from another? Well, there are as many differences as there are people. But still there are some common "features" common to each of the three groups. It would take too much time to list all the "qualities", so we will focus only on those that Group A people have.
First, they have "unconventional" thinking. First of all, we mean the ability to think outside the box. One of the laws of the market, "If you act like everyone else, you lose like everyone else," explains the importance of "wrong" behavior in the market.
Secondly, they do well in an ever-changing environment. Not only are the markets in "perpetual" motion, but they are also constantly changing. And that means that over time, the rules of the markets are also changing. And Forex trading strategy, which is successful today, may turn out to be useless tomorrow. A trader must always be open to new knowledge.
Thirdly, people in Group A have the ability to navigate quickly and make decisions without unnecessary deliberation. Any hesitation or, even worse, indecision will cost the trader money. Very often, conditions on financial markets require its participants to make "right" decisions in a matter of "seconds". Any hesitation or hesitation, at this point, is extremely dangerous.
Fourth, a trader from the group A, is able to learn from mistakes. In order to successfully trade forex currencies you must be able to find the reasons for mistakes and draw the right conclusions from them. It is crucial to understand your mistakes, but it is even more important to prevent them from happening again in the future. There are hundreds of profitable forex strategies, but also the number of mistakes a trader can make is in the thousands.
Fifth, people of the conditional group A may be called "loners". They can work on their own without needing attention from other people or colleagues. In general, people in this group cannot be classified as staff who are used to working in a "team". But this does not mean that they avoid society, they just do not need it.
It is very important, before taking up currency trading, to decide if this occupation is right for you, and if you are suitable for it. Later on it will save you money and your time.
But more often it is quite difficult for a beginning trader to understand if this is his "business". And the financial market itself will help them: having worked on it and having tasted all the "pleasures and troubles" of currency trading, a person will understand what is the "profession" of a trader. After this he will easily answer two key questions: whether he wants to be a currency trader or not and whether he is able to become a currency trader. But, without being sly to himself!

Forex Exchange. Job or online casino?

The Forex exchange, more precisely Forex currency pairs trading, attracts more and more compatriots, especially in conditions of financial crisis, when the question of additional sources of income becomes very topical.
The mass of virtual money revolving in this market attracts thousands and thousands of new players, who think that it is easy, simple and fast to get a small piece of such a big chunk. Most of them, soon to be convinced of the futility of their own endeavors and having increased the total amount of money by their lost deposits, abandon the attempts to get rich quick. Some of them stay to try again and again to catch the ephemeral bird of luck by the tail.
Naturally, the Forex market, orbiting huge financial sacks, has no idea about how many millions, if not billions of money units were deposited in its coffers by various private investors. Indifferently moving the quotes of currency pairs, the market is staggering in its enormity, turning any trader into a tiny grain of sand, on which nothing really depends.
In vain some beginners try to guess on the basis of their intuition or a "super-secret" Forex strategy that the market will go in one direction or another, opening positions against the established trend, hoping to get into the first wagon of a new profitable train. Such trading looks more like gambling at a casino; there, as we know, only the owner of the place is a winner.
Forex will pick its own direction and timing for the next global trend, absorbing the next batch of money of the next losers in passing. Like a boundless ocean, the currency market washes away, like a wave of sand, the money of frivolous traders. So, abandon hope, everyone who enters here?
Of course not. After all, any beginner probably knows the names of those who have conquered the peak of profitable trading. And it is their success with seeming simplicity of action that brings more and more new "Grail" seekers.
What can a third-party visitor see when watching a trader working? A person is sitting, looking at the monitor, pressed a button, earned money.
"I can do it too" - thinks almost everyone who encounters this type of Internet business for the first time. But behind the visible top of the iceberg of activity you cannot see the tension of a professional's mind, fuelled by his vast knowledge multiplied by experience. All the things a professional trader uses to make a profit are not tangible.
The world is driven by professionalism, and the Forex market with its powerful dynamics only strengthens the perception of this immutable rule. There is no right to make a mistake, which each of us is accustomed to using in normal life, correcting errors from our own actions or deeds almost every day. That's why you should spend a lot of energy and probably finances on really good educational courses on this topic before you start trading directly. It is impossible to become a professional trader with amateur knowledge of the nature of Forex.
In fact, it is impossible to succeed in any other business without special knowledge. Somehow this well-known postulate is forgotten at the sight of moving quotations on the price charts. Although Forex trading, like any other business, is merciless to those who cannot win.
Therefore, remembering the words of the eternally living elder about learn, learn and learn again, first of all, you need to protect yourself from possible failures by getting a high-class education.
The money and time spent on this important stage of development will be repaid a hundredfold. After all, only professional education will be able to move the trader from the crowd of millions of losers to the select few.
The Forex exchange market is ready to reveal its secrets only to the professional traders, for the others it will always remain as alluring lights of the casino.

Forex indicators. Guiding star or mirage?

The fact that with the help of these tools, necessary for any trader, one can determine the trend direction and find entry and exit points to open-close positions, says about the undeniable usefulness of indicators. Skilled programmers have used mathematical calculations to simulate the historical data of price indicators, including the volumes at different time intervals. Kudos to them for that. In fact, 20 years ago, traders were deprived of such, it would seem, integral parts of any modern trading terminal, as the Forex indicators.
Nowadays the development of your own trading system is inseparably connected with the use of necessary, preferably diverse, indicators. Expert Advisors and mechanical systems, some of which can really show wonders of automated trading, are based on their work.
Even derivative algorithms have appeared. Thus, price and volume indicators that take into account price and volume prove their worth. You can read more about them in the article "Forex Price Volume Trend Indicator".
By and large, modern indicators can be divided into two groups - trend indicators and oscillators. Actually, using oscillators as easy to determine the direction of the current trading trend, but most of all, they are indispensable when working in a flat. All the rest - different variations of the subgroups with the use of some additional parameters, convenient for this or that Forex trading system.
At the same time, some traders are trying to turn these useful and necessary tools into some sort of trading oracle. Encircling the charts with various indicators, which often are poorly coordinated with each other or duplicate the readings, they stop to see the tendency of the trading instrument price movement. Such a trader is more like a pilot flying an aeroplane in the dark and having to rely solely on the instrument readings. But this is possible only for experienced pilots.
Conflicting readings of unbalanced for a particular trading system indicators give equally inconsistent Forex trading signals. At best, such a trader just does not open a position, waiting for confirmation of his decisions from all of the indicators. In the worst case such trader acts intuitively and it leads to losses, which are often global. Although, the most important thing for Forex trading is of course the price.
Even the best Forex indicators are just indicators of history. Perfectly tracking the happened facts, they help trader to make a decision in the future on the basis of historical actions. But, indicators will never predict the price behavior in the future. It is not by chance that professional traders often completely refuse to use analytical tools in their trading systems. Most of all they focus on price behavior on crossing certain price levels or on other indicators, in some way or another, related exclusively to the current behavior of the price. In fact, the main argument in Forex has always been and will always be the price of a trading instrument.
Of course, the complete rejection of the indicators is a voluntary and requires sufficient experience, so - everything is good in moderation. Especially, there are many years of proven trading system solutions using a set of indicators developed specifically for this trading system. The most important thing is for a trader to use the information provided by these trading "devices" properly in order to make the only correct conclusion and take the right decision based on its knowledge and experience. And so it is from day to day, from month to month.

Forex indicators, their advantages and varieties

The development of computer technology has allowed players in the financial markets not only to analyze price behavior graphically, but also mathematically calculate its conversion. In other words, Forex indicators are mathematical functions based on different indicators: price, trading volume, time.
Forex indicators are used to determine the current market situation and some regularities. They help to determine the trend direction and strength, oversold and overbought zones, trend reversal, resistance zones and support levels.
They help both beginners and professionals. Each indicator is based on an algorithm that allows calculating all price fluctuations.
It allows a trader to enter trades with minimum risk, and in case of negative changes, exit them. Of course, it cannot guarantee absolute success on the market, but it provides better and safer trading.
Forex indicators are very convenient for traders. Their main purpose is to indicate the location of the price in the market and current price movement, they can also forecast future price changes and inform about price entry/exit into certain price areas. The most important advantage of indicators is that traders do not need to make calculations manually.
Traders should pay attention to price fixing. On stock and commodity exchanges, trading starts early in the morning and ends at the end of the day. Open, Low, High, Close are the basic prices when calculating the indicators.
Of course, without knowing the principles of the indicator, it is very difficult to understand it.
Today, we know many Forex indicators, but generally speaking, they are divided into several types: trend indicators, oscillators and market volume indicators.
Trend indicators are subdivided into 3 types: uptrend indicators - containing upward price movements; Downward trends - containing downward price movements; sideways - occurring when both the seller and the buyer do not have an edge. In this case the price moves in the sideways corridor.
Oscillator is a type of indicators characterizing an overbought or oversold condition of the market. Oscillators, unlike trend indicators, work well in corrections, reflecting the phases of the market, as well as bursts of volatility.
The volume indicators track the price fluctuations in a given period of time, allowing you to calculate the best time to enter the market.

Forex Analysis: Technical and Fundamental Analysis with Forecasts

Forex Market Analysis
With the growing popularity of trading currency pairs on the forex market, various methods of determining the direction of the movement have appeared. Today forex market analysis is an essential part of a trader's work - let's find out how to analyze and what a beginner should pay more attention to as a trader of currency pairs and other instruments.
The essence and types of analytics
Traders have realized that in order to start trading profitably, you have to make a thorough analysis of the forex market. When a beginner learns about Forex he does not have a clue how to make forex forecasts, so he may make a lot of mistakes which can lead to losses. In fact a beginner does not even understand how a currency pair moves, what leads to its movement and, which is more important, on what basis making Forex forecasts should be based. But there are certain correlations on the market. For this reason it is worth to divide the analytics by types: technical, fundamental, fractal, candlestick, wave analysis.
Technical analysis of the forex market
Technical analysis of the forex market is based primarily on the use of technical indicators, horizontal and trend lines according to which the price will be examined and on which the conclusion about the possible direction of the currency pair in the future will be drawn.
Fundamental analysis of the forex market
It is based on the economic indicators that are published daily and can characterize the economic and political situation in the countries. The difficulty of this analysis is that the data on different countries comes out every day and it affects the national currency, which in turn changes its value and the price of the currency pair fluctuates. But if you use the fundamental approach to forecasting you can avoid entering the market when there are abrupt movements or you can predict how a currency pair will behave in one way or another.
Candlestick Approach in Analytics
It is a type of technical analysis where candlestick bodies and shadows are used to predict future behavior of a currency pair. Originally it was only a daily chart, but later candlestick studies were extended to smaller timeframes. If you hover over each candlestick, you can see the Open, Close, High, Low, and based on these data and build strategies and write EAs.
Fractal and Wave Approach
It is a kind of analytical methods based on the candlestick analysis, but with a different approach. For example, the Fractal approach implies studying the fractals which are formed by examining more than 5 candlesticks. Strategies are usually based on a fractal breakthrough and in combination with other market research methods. The wave approach is based on the cyclic pattern of price movements. It is based on 5 waves in one direction, i.e. along the trend and 3 waves in the other direction as a correction. This approach was pioneered by trader Elliott.
So, we can now draw the most important conclusion - a correct forex currency forecast is the key to success. But you should not pay attention only to one type of forecasts, combine them, try to combine them into a strategy to be applied every day and then you will succeed! Good luck!

Forex psychology or how to fight with the effect of wings?

Forex trading is a complicated business, which needs to be approached thoughtfully and with reckoning. Very often a trader is held hostage by his or her psychological traits. Here the most common mistake of market participants is confidence, or, more precisely, self-confidence which they develop after a series of profitable trades. Exactly at this moment traders start to think that they know exactly where the market is going to go and try to increase their lots.
But Forex does not forgive such mistakes! As a rule, the market moves not exactly in the direction that the trader has chosen, and the trader would have easily tolerated these spikes, but an overloaded deposit gradually leads to a margin call, forcing either to close most of the positions with a loss or to lock orders, which, in general, is not the most profitable option. So how do you fight this detrimental "trader's spiraling effect"?
Let us consider the following situation as an example. A trader decides to trade the currency pair (EUR/USD) but he had never traded it before. He is not new to the market, he is experienced and he uses the algorithm of potentially profitable forex strategy and knows how to keep his feelings under control. A few trades go well, he has a series of profits over several days. Trader's confidence in knowing the market by the European grows stronger, and he decides to increase his lot. After this, things begin to go completely differently than he expected: the currency rate begins to move in the wrong direction in light of the news. The increased lot, eats up several days profit in just a couple of hours. Of course, there is hope for the stop loss, but because of his confidence he sets it so far away that any sense in protective orders is lost.
So why did this happen? There are three reasons! First, he started trading an unfamiliar currency pair and did not bother to study and analyze the market. Secondly, he has entered too large a lot, which contrary to all the laws of risk management on Forex, and common sense as well. Thirdly, put stop-losses without taking into account possible losses also contradicts the laws of risk management in Forex.
Of course, the trader realizes almost immediately that he or she was wrong and all his or her actions were completely subordinate to emotions, and not to a trading system and reason. But success of profitable deals is so encouraging that it is more pleasant to think about near-term profit than about possible mistakes.
But it is possible to avoid such a fall. To do so, you need to adequately assess your performance in the Forex market. When trading unfamiliar currency pairs, trade with minimum lots. After a series of successful trades do not immediately increase your lot. Make sure to stop trading for a while, after a series of successful trades, not only after losing trades. Only this way you can avoid a rapid rise and subsequent fall.

Forex. The stages of becoming a trader

Some experience of communicating with the traders of currency markets allows deducing the following common denominator. Namely, Forex trading for beginners passes through several stages. And none of the stages can be skipped. It simply does not happen.
If you think that you are the smartest of all, that you will immediately start to make a steady profit - without searching, without doubts, without falling down and without a star disease, then we can safely say only one thing. All the "childhood diseases" inherent in Forex beginners, sooner or later, will catch up with you. And the thunder of disappointment can significantly damage the cloudless sky of hope.
Forex trading does not forgive neglect. And the earlier beginners learn this axiom, the more successful their further way will be. Though, it is not only newcomers that get slapped by the market. And falling from a great height is notoriously painful.
So here's the road map to the big road: 1. STAGE FIRST. This is the euphoric stage. Forex beginners have just become aware of the existence of the Forex market, of the very possibility to make money without leaving home, without working, as they say, "for an uncle", of the possibility to quickly become free and independent. You are full of energy and enthusiasm. You have even made some "demo" trades. You have made a handsome profit. How easy it is, you think, carrying your money on the "real".
2. STAGE TWO. You begin to work on the real, and suddenly it turns out that all this is not as easy as it seemed at first glance. Forex trading is entirely loss-making. You lose for some reason, get angry and lose again. Gradually, Forex beginners come to realise that they need to learn. You have to learn the profession of a real trader! - is necessary, as any other profession.
3. STAGE THREE. You study hard. You attend or purchase various courses, seminars, become a member of numerous thematic forums, buy a lot of books and read.
4. STAGE FOUR. You again go to the "real". Again, at the beginning you win, and then you start to lose. By the way, at this stage, most drop out of the "game". Only the most ambitious and optimistic remain. And then usually beginners realize that knowledge is knowledge (it is necessary), but that is not the most important thing in Forex. A successful trading is 80 percent of psychology and 20 percent of money management. If reading these words you disagree with them, it means you are not yet ready for professional trading.
5. STEP FIVE. You work on your psychology, you observe money management, your strategy of earnings on Forex gives not less than 40 percent of correct entries. That is, you begin to work as an adult. And the moment comes when you think that you can do anything. "Star disease" takes you by surprise at the most unexpected moment, and everything crumbles. Or almost everything.
6. STAGE SIX. This is the comeback phase. After the inevitable break, the psychological crisis caused by failure, you come back even more hardened and stronger. You now know everything, and are ready for anything. You will not let it happen again.

Forex strategies - what it is and how applied

Forex strategies are ready-made algorithms for making decisions by a trader, a set of rules prescribing a trader to do certain things, as well as a set of indicators that allow him to determine different levels of price movements. If you read anywhere the phrase "Forex trading system", you should know that it also means a Forex strategy.
Why forex strategies are used for making money on Forex? The reason is that at this market only that part of the traders, who have been sticking to any particular strategy for a long time, have stable earnings. Such a strategy may be created by a trader or he/she may use an existing one which is adjusted to his/her own trading style. Those 5% of Forex market participants who are steadily earning on it are mainly owners of self-made strategies.
The rest 95% are traders who were blinded by false advertising, promising them fast earning with minimal knowledge and effort. They do not follow any strategies, all their trading is based on intuition and haphazard decision-making. Even when there are occasional profitable trades, the result is that they outbid subsequent losses. This also includes traders who have fallen into the "kitchen". Profit in such a situation is impossible.
There is another minor category of traders who for years have been looking for their only very effective strategy giving 100% effect. But there is no such strategy. It cannot exist as Forex market specifics make it impossible to reliably predict fluctuations of an impressive number of different indicators. It is impossible to close all deals at Forex with profit; losses are an obligatory component of such a business which is very risky. Therefore one does not have to avoid losses completely, but rather minimise them, which is why strategies are created for this purpose.
Forex strategies are divided into types and sub-strategies according to quite a few indicators and characteristics, but there are features that are mandatory for each strategy and are implemented during the execution of transactions. Every trading strategy must have these functions:
position opening; closing of a position with a loss (in this case a loss amount is preliminarily set up); closing a position with a profit.

Forex technical analysis for beginners. Dow Theory

Technical analysis can be defined as a method of predicting market prices which is based on mathematical calculations and not on economic indicators or news.
This method was created to make profits on the stock and currency markets. Originally, technical analysis was divided into several different approaches and it was only in the 70s that all these approaches were merged into a comprehensive method with common psychology, axioms and principles.
Forex technical analysis is a method for predicting likely price movements using charts that depict the history of fluctuations. The practical use of technical analysis defines several axioms.
Technical Analysis Axiom No. 1. Every pricing factor - economic, political, psychological - has been taken into consideration when forming the price. As soon as news is released, the market chart will begin to move to reflect the new information.
Technical Analysis Axiom No. 2 The price movement has its own direction. This axiom has become the basic one in all methods of technical analysis. The main purpose of Forex technical analysis is to: determine a probable movement (trend in other words), and use this data in trading. Dow's definition says that in a bullish trend, each successive peak and trough will be higher than the previous one. This definition has become the main and fundamental principle of technical analysis. A trend is divided into three types: bullish (upward movement), bearish (downward movement) and flat (sideways movement). Each of these trends is rarely encountered in its pure form.
A certain trend is considered correct until there are signs that signal a change of direction. According to Dow, the trend continues despite market noises. In real practice, however, it is not so easy to determine whether a given reversal is the starting point for a new trend or just a pullback. Modern technical tools make it easy for traders to determine this. However, different traders interpret this data differently.
Technical Analysis Axiom No. 3 Analysts predict movements based on certain rules that have worked in the past. These rules can be applied in the future as well, as the price is shaped mainly by human psychology. Here are the fundamental principles of Forex technical analysis:
Price takes all factors into account, so all necessary information can be obtained by studying the charts. The main purpose of technical analysis is to determine the trend at its initial stages and then use this data in working forex strategies. And the final thought is that if something worked in the past, it is likely to work in the future.
Dow Theory in Classifying Trends Dow Theory distinguishes between three types of movements: "Global (long-term) trend", "Medium-term trend" and "Short-term trend".
"Global (long term) trend" is the main one as this trend can last for several years. "Medium-Trend" is essentially a correction of the main "Global Trend" and can last from ten days to three months. "Short term trend" is a slight fluctuation in movement. This type of trend can last up to three weeks.
Many modern technical analysts consider the Dow Theory trend definition as the basis of modern technical analysis.

The basics of forex trading

It is not a secret to anyone that trading foreign exchange on the forex market brings a lot of money. This information is actively distributed through the Internet, appearing in various print media and advertising networks. Therefore, having received such fragmentary and incomplete information, many people are trying to get to the bottom of this information and to understand the basics of trading at Forex. Let us try to make this task a little easier and today we will talk about what this trading platform is and how one can earn money on it.
The Basic Principle of Forex Trading
Forex is a market and the main objective of its participants is to make profitable transactions. The commodity here is quite specific - it is money. Namely, money, the value of which is constantly changing, is a commodity that must be bought as cheaply as possible and sold at a higher price.
This principle of Forex trading - buy cheap and sell dear - is the basis of trading activity of every trader, working in this trading platform.
But to better understand how the trading on this market, you should get acquainted with it.
Forex - What is it?
As we mentioned above Forex (FOReign EXchange Market) is a large scale international market where the goods are money. This market is where exchange rates are created, which are later used for changing currencies.
The Forex market is unique because it is not strictly tied to a particular marketplace. Forex trading is done via the Internet and occurs 24 hours a day, seven days a week.
Hundreds of banks are connected to the Forex network, which enables them to make transactions related to currency exchange, both on their own initiative, as well as on the initiative of their clients.
The Forex market is comparable to a huge currency exchanger, which is constantly buying and selling one currency for another. And if you know or guess how the price of a certain currency will change, you can make good profit.
Naturally, no one knows the exact direction of the exchange rate, but in the short term it can be predicted, using various analytical and technical tools.
How does Forex trading work?
1. Each currency used in trading is denoted by a three-letter code. For instance, US Dollar is denoted as USD, GBP as GBR, EUR as EUR and so on. Accordingly, a currency pair consisting of, for example, EUR and USD would be denoted by EUR/USD. The currency which stands on the left is usually referred to as the base currency (EUR). The currency on the right is referred to as the quoted currency (USD).
2. any currency pair can be either bought or sold. However, it is not really the currency pair that is being sold, but rather the base currency of the pair. At the same time you are buying the quoted currency. For example, if you decide to sell the EUR/USD pair, you are actually selling EUR, and buying USD. And if the pair decreases, then naturally the EUR will become cheaper, and the USD will become more expensive. You can make money on this.
3. The two prices used in Forex trading are the "Bid" price, which is the selling price, and the "Ask" price, which is the buying price. The difference between these prices is called the spread. This is nothing else but the broker's commission.
4. the volume in each trade executed in this market is measured in lots. The standard volume of currency sold or bought on the Forex market is 100,000 units of the base currency. But a trader does not need to have a lot of money to make a trade. Now there is such a thing as margin trading. A broker provides a leverage to any trader. For example, if leverage is 1:100, on trader's account the amount of money will be 100 times less, than the amount of transaction. It is also possible to trade with fractional lots. Beginners should not rush to open positions with big volumes.
To master this knowledge and to fully understand how trading operates in Forex let us have a look at one small example:
Let us assume that at some point the EUR/USD exchange rate is 1.1790/1.1794 (bid/ask). You assume that after some time it will increase and reach 1.1840. Based on this assumption you decide to buy 0.1 lot of this asset. As a result it appears that you bought 10000 Euro and sold 10000x1.1794=11794 USD. In this case, you did not need to have 11794 USD in your trading account. With a broker's 1:100 leverage, you only had to have $117.94. Let's assume that you were right and your prediction was correct. By closing the deal at the "Bid" price of 1.1840, you are already selling 10,000 Euro and buying $11,840. The profit in this transaction amounted to 11840 - 11794 = $46.
In this article we have considered only basic concepts - the basics of Forex trading for beginners, which every trader should know. But in fact, to make profit on the currency market one has to learn a lot. Only diligence and systematic work can bring you good money when you start trading.

Forex trading by currency indices

Every day trader's work implies periodical monitoring of price charts in order to get information that facilitates further trading. The success of the trader ultimately depends on how successful and correct analytical work is performed.
Indices as a type of technical analysis The methods of technical analysis are different and each trader selects certain methods on the basis of own trading system, preferences and experience. But, in the total volume of different variations of analytical thought, we can single out probably one type of technical analysis, suitable for all traders without exception. Namely, the currency index analysis. What is so interesting about this type of analysis besides the fact that trading indices at Forex is very exciting and profitable?
The first positive aspect is the multidirectionality.
By doing graphical analysis of the Forex market using various indices, a trader can practically always find the most interesting pairs of currencies, the indices of which are in stable opposite movement trends.
While analyzing one or even several trading pairs, a trader often gets confused by unpredictable price behavior of customary instruments where the pair can often move equally in both directions. The order placing in such situations is more like a roulette game, where the main factor is luck or blind luck.
From index trading to cross pairs Market analysis based on currency indexes widens trader's horizons substantially, showing him the trading decisions that are preferable for the current time interval, thereby preventing from trading on traditional pairs at those times, when it is difficult to analyze them for some reasons.
For example, if the Canadian dollar index shows a steady "bullish" trend, while the pound index is steadily declining, why wait for the end of the flat on the Euro-dollar pair or try to guess where this instrument will move in the foreseeable future? It is easier to pass to those instruments, the work with which will give a higher probability of successful transaction, in our case - GBPCAD, or to open transactions by trading directly on indices.
Any driver will confirm that travelling by car at dark time of the day is much more tiring than driving the same distance during the day. It is connected not only with physiological properties of the human organism. At night the orientation in space is significantly hampered when its visible part is significantly limited by the light from car headlights.
So is Forex trading. By working exclusively with currency pairs and ignoring analysis of currency indexes, the trader narrows his horizons, limits his own operational space. Studying the index charts, it is easy to understand at what point in time a currency is in its movement.
An impulse wave moves the price at the moment, or vice versa, the price corrects before continuing its movement in an established trend. By analyzing the long-term timeframe of each of the indices, the trader can understand the present and expected movement of the indices, picking the most interesting currency pairs for the long-run. This overview and planning is the second positive thing about currency index analysis.
Any technical analysis method has a right to live as long as its method helps a trader to profit from trading currencies in the forex market. The market analysis based on currency indexes does not deprive the trader of his/her usual working algorithm, on the contrary, it expands it by adding new tools into trading - indexes. Applying this type of analytics, the player is able to significantly expand the scope of understanding the nature of the origin of a particular price movement. And understanding what is happening will always help in the difficult business of making profit.

Forex trading. How important on time get away...

Closing trades on time is important!
How does a good Forex trading system compare with a bad one?
First of all, the algorithm of deals closing.
If the system is properly designed, this aspect must be given no less attention than the development of position opening situations. And even more, because the importance of timely closing a position is much higher than entering the market.
In terms of its intended purpose, position closing is carried out in two cases:
- minimizing losses; - profit fixing.
Calculating potential losses is a mandatory part of any trading system. Regardless of methods used by a trader to solve this problem - using locking or opening counter-orders against losing positions, or setting protective stop-orders. In any case, exit from the market in case of an unfavorable trading situation should be provided for.
Forex trading without position protection will, sooner or later, lead to a total loss of the deposit. And, in order not to learn from your own mistakes, this statement should be taken as an axiom. Although, if we put aside psychological aspects, placing necessary orders and thinking of a protective exit from the market is much easier than developing an exit system for profit taking.
Any business, and trading at Forex naturally belongs to entrepreneurial activity, means earning some profit. And the bigger it is, the more enjoyable it is for the business owner. To close a profitable position early is to lose some of your profit and patiently wait for the next entry into the market. Close it later - in the best case, it will be left with some of the profit, or even without it, if a stop loss occurs. And it is good if this stop order is located in the Breakeven area.
It is a great art - to timely close the position with the maximum possible profit. And without the skillful use of the algorithm of transaction exiting, trading just makes no sense. A missed entry can only cause a trader a feeling of annoyance, but it will not damage the deposit. It not only affects negatively financial balance, but also influences trader's psyche making him/her quickly compensate for the allegedly missed profit and open position either ahead of the lagging trend or, worse, against it.
Close - Open - Trade?
But the trader should always remember that closing a position does not mean an instant opening in the opposite direction. The market is inertial and is not capable to turn in the opposite direction "all of a sudden". Any movement begins by a flat, and ends by a flat. Naturally, the reversal time will be different for various timeframes, but in any case, the opening of a new position should be based on entry signals calculated for a certain time interval, in which the trader trades.
The skill of the trader is not only in the ability to open correct positions, though it is a very important quality. Opening a position and closing a trade are indivisible parts of one trading system, and only the right combination of these two components will make a trading system work.

Forex trading. How to start....? Where to start...?

There are, at least, the educational courses at the dealing centre, the tons of studied literature, where the principles of currency speculator's activity are explained in clear and understandable way.
There is a clear perspective of successful and only successful trading on Forex, the gaining of profit and bright, alluring future.
Where does one start in trading? All you need to do is to open an account and with the help of working Forex strategies, trade, trade and trade. The more so because there is so much information about high profitability of this type of activity. However, some people seldom write about high risks, but beginning traders do not like to read such information. Why? Because everything will be all right for them. So, the initial question that almost every beginning trader is trying to decide for himself: what size first (hardly the last) account he would prefer to choose, how much money to put into trading?
How much money to deposit for the first time? Paradoxically, it is better to postpone investing your own money in unexplored business. When it comes to Forex trading for beginners the key success factor will be a steady profit. It's advisable to start by testing your readiness for a long and fruitful life.
Open a Demo Account with the same amount you intend to use on your real one. Trade. Apply all your knowledge and skills, but set your own performance bar, for example, getting 20% of profit per month. That is, set a goal for your trade for a certain period.
Do not set small time frame for your own comfort. Daily, three-day, and weekly results are unlikely to help you understand the extent of your own readiness.
Of course, a possible series of successful trades will give confidence and hope to the new trader. But only the long test period will help to determine whether the profit is systematic, or it is chaotic and associated with some elements of luck. But even a successful one-month test does not mean that the trader is ready to conquer Forex. It is necessary to be patient and try again. Moreover, this business is largely composed of various kinds of expectations.
You just need to learn to wait Knowing how to wait is a very important quality for a successful trader. Try again, even without increasing the height of goals and objectives. Or better yet, take part in some kind of contest. Fortunately, nowadays different dealing centres hold them with great frequency.
Trading on the contest surrounded by anonymous participants will allow you to take a broader look at your own capabilities and experience some psychological stress. It is not at all necessary to aim at winning the contest or taking the prize. First of all, you should strive to reach your own goal, to increase the trading account by a certain self-assigned value.
If the beginning trader has successfully passed this stage, he or she can go to the initial question about the size of the first opened real account. And this point should be approached thoughtfully and cautiously. The most important rule, even the law, is that you should never open an account with borrowed money.
Of course, you can't seriously consider a real account of $1, $5 or $10. Such deposits are better defined as variants of demo accounts, nothing more. But investing thousands and thousands in an understudied business, which for a beginner Forex trading will still be for a long time, is also not a fun for everyone.
It makes sense to determine the amount of money to part with (this is the aspect of account opening) that will be painful but not critical, especially for a family.
The number of different types of mistakes at the stage of becoming a trader is rather high and the relatives should not suffer from mistakes of a beginner. Therefore, of course, every trader should determine the size of the opened account by himself, but this question should be discussed preferably in the family circle.
Forex trading is a long and slow process, where every step is taken after considerable deliberation. And a lot, if not everything, depends on how the trader gets started on this path.

Forex Trading: Individual Entrepreneurship or Collective Creativity?

People tend to seek support for their actions or thoughts through the opinions of others. In everyday life, we are used to discussing our plans with our loved ones and being interested in their opinions on various matters. "One head is good, but two is better" is a well-known and wise Russian proverb, often applied in modern everyday life. It is this love of advising and listening to other people's opinions that is very detrimental to a trader, especially a beginner.
Forex trading is a kind of Internet Entrepreneurship. In just a few seconds you can increase your initial capital or lose everything. But people who come to the internet trading usually do not think about the bad things.
Having got the knowledge through dealing centre courses or educational programs and having got a Forex strategy for beginners they are eager to join trading on Forex market solely for making profit. But, as usual, knowledge is not enough, so they want to learn about the current trading situation from a colleague or a friend. Of course, it is understandable, but not the fact that it leads to profit.
As practice shows, a successful trader is not a public person, though, of course, there are some pleasant exceptions. When trading in silence, a successful gambler is not looking for someone who is willing to listen to his opinion. He does not need it. Neither do opinions of other, even more successful traders. That's why very often a beginner asks for an opinion from a colleague who may have a bit more experience and is willing to share it, but you will learn later if it is good experience or not.
If you ask ten traders at one time how they would like to trade on Forex today for a certain currency, one half of them will firmly say that they will buy this currency today, while the other half will be no less bearish. And that is natural. They simply trade on different systems and time intervals. Why would a trader looking for an entry on a five-minute chart listen to the opinion of a mid-term trader? Most likely, it will be the opposite and may cause that a competent, calculated entry will not take place, because a beginner usually takes the opinion of a more experienced trader as a call to action.
Another thing is if a group of traders trades with similar trading systems. This kind of communication is difficult to overestimate. By adhering to the same rules and regulations, and assessing the trading situation through their prism in discussing it, they will surely come to the same accurate opinion. It is in this kind of communication that the adage of benefit proportional to the number of heads is true and relevant. But for communication to be beneficial, the trader must initially be confident in his own abilities, so that other people's opinion would be just an ordinary judgment of a stranger, but not affect his own trading plan in any way. And such confidence is achieved through a combination of professional education and positive trading experience. And the more qualitative the education received by the trader, the more confident he will feel in his work, and the more profitable forex trading will be for him. Even if it takes more than one month to educate a trader, all this will return a hundredfold.
Summarizing the above, we can say that communication between traders is, of course, an individual matter, but it should by no means turn into teaching amateurs to each other. And it is a well-known fact that traders do not become professionals without proper education.

Forex trading - making real money online

Not every trader can become successful at Forex trading. This type of activity is worth to be paid attention to if the potential trader assumes certain risks and is prudent but not greedy and is able to control his emotions.
It is necessary to warn people fitting the described psychotype that even having certain skills for trading on the currency market one should not count on fast enrichment. Earnings on Forex are not easy and require a lot of efforts. Here, as in all other spheres of human activity, there is a strong competitive struggle in which the strongest wins (experienced and knowledgeable traders). This is the status that beginners on the currency market should strive for.
You can study to become a trader by yourself with the help of practice and seminars which are widely available on the Internet. The other option is to attend courses offered by brokerage houses and dealing centres.
The preparation period also includes observation of the currency pair to be used in the trading process. A beginner trader should notice how the price reacts to signals of technical analysis and to certain news events. The received data will help him to learn how to make right forecasts about price's behavior.
Successful trading on the currency market is not possible without a trading strategy. This is an algorithm of certain actions which a trader should do while trading on Forex. There are a lot of trading strategies. While choosing them one should follow certain rules. They should be understandable for a trader and appropriate for the chosen type of trading.
Whether the strategy will be profitable or not, you can find out only by experience. Testing of a trading strategy is done on a demo account. Such simulators are available at all brokerage companies. With their help beginners gain experience without any losses.
You can use a demo account when you become a client of a broker. You should choose it seriously and, if possible, it is better to use recommendations of your acquaintances.
Theoretical preparation is over and strategy testing is done, now you can start real trading on the currency market. For that, you will have to deposit a certain amount of money. It is advisable to use a small part of your capital and do not forget to set a loss limit.

The forex trading platform

The first electronic trading platforms emerged in the seventies of the twentieth century. They linked brokers and stock exchanges through private ad hoc networks using simple terminals.
The term 'trading platform' is usually used to avoid confusion with 'trading system', which most commonly refers to a trading method or trading strategy rather than a computer system used to execute orders in financial transactions.
Choosing a forex trading platform A modern trading platform should meet the requirements of convenience and functionality. The performance and power consumption of the processor are also very important. These parameters affect the speed of executing transactions and changing of quotes.
By functionality we understand the number of traded financial assets, analytical tools, available timeframes and the set of different order types.
Of course the functionality of the platform is important, but simpler platforms are also more popular. A trading platform is a means of accessing the market, and for beginners, the simpler the better. You should also pay attention to the availability of mobile versions and the possibility to install for different operating systems. Nowadays almost all brokers offer demo versions of forex trading platforms, so you can choose the one that suits you best.
The most popular forex platforms On the post-Soviet space the most popular Forex trading platform is MetaTrader 4. Lately it has been spreading to the rest of the world. This product by MetaQuotes is characterized by perfect security system. The platform offers automated trading, programming options, immense analytical functionality and flexibility of settings complete its advantages. The new version of MetaTrader 5 is available in parallel with this platform, which is much better in performance, wider in functionality and provides access not only to Forex, but also to other markets.
The Ninja Trader is considered a benchmark for currency trading abroad. Hundreds of brokerage companies use it. It allows to trade currencies, futures, options and stocks. Widely known is Viking Currenex, used by market makers and for ECN networks. Millions of traders trade through the cTrader platform, which was released in 2011 and is designed to run on the latest technology.
ZuluTrade and Mirror Trader trading platforms have recently become popular in forex trading. Many brokers offer them as an additional or alternative means to invest in trades of successful traders from all over the world.
All current popular forex trading platforms are constantly being improved and updated to keep up with the demands of progress.

The secrets of forex trading - pair trading

The paired trading strategy was discovered in the 1980s by a group of quants working for Morgan Stanley. Since then, this strategy has been a staple in many large investment banks and hedge funds. However, as large investors prefer not to share the secrets of forex trading, pair trading remained unknown to the general public for a long time, until the advent of the Internet. Now, with the spread of online trading, many trading strategies, including pair trading, have become available to ordinary traders.
What is the secret of the pair trading?
The strategy is to find two highly correlated trading instruments and open a sideways position every time the difference between their prices (with consideration of the scaling factors) exceeds its historical average by a specified amount. Such trading relies on the fact that the price difference will always tend to return to its average value, which means a profit will be made on one or both positions. It is important to note that paired trades always remain neutral to the market, i.e. the general direction of the market does not affect their gain or loss.
Pair trading strategy works well not only with equities, but also with currencies, commodities and even options. In forex, Contracts for Difference (CFDs), which require considerably less diversion of funds than the underlying asset, allow small investors to use pair trading with success.
How to select pairs?
The first step in pair trading strategy is to find two instruments which are highly correlated. Typically, this means they must be from the same industry or sector, but it does not have to be. As an example, consider the stocks of two highly correlated companies: GM and Ford. Since both companies are American automakers, their stocks tend to move together. To see this, just overlay their price charts on top of each other.
However, it is difficult and not always efficient to make a pair based solely on economic analysis and fundamentals. First of all, you need to be an expert in the field and have a sufficiently good understanding of the situation in the companies in question, and secondly, even with the necessary knowledge and information, it is very laborious to manually look through many combinations of currency pairs in order to evaluate their suitability for pair trading. Besides, relying only on fundamental considerations it is possible to miss a lot of promising pairs connected with dependencies about which even an experienced analyst may not guess.
That is why institutional investors have long started using in their practice various statistical methods to select promising pairs. The simplest and best known method is calculation of pair correlations of instruments with further selection of pairs that have high correlation coefficient (more than 80%). Now you can find a lot of services with already calculated correlation coefficients on the Internet.
How to trade?
Potential points of entry into the position can be identified by plotting the spread between the instruments. In this case, the spread means the difference in prices of these instruments, taken with the scaling coefficients. Coefficients are needed in order to bring instrument prices to comparable values.
Using the spread chart, it is easy to determine the moments of price divergence. To do this, just draw a moving average of a sufficiently long period on the chart - it will show the stable historical correlation of prices of instruments. And then - track the spread deviations from this average. When the deviation exceeds the specified level, a paired deal can be opened: a long position on the undervalued symbol and a short position on the overvalued one. The optimal level is easily determined by historical testing.
Pair trading is one of the few trading strategies that have proved itself over time. Unlike various "shamanistic" methods of tehanalysis, such as chart analysis, Elliott waves or Fibonacci numbers, this strategy has a rigorous scientific foundation.

Forex Trading System. To buy or not to buy?

Many traders, plunging into the Forex market, are trying to find some "grail" - the way of 100% profitable trading, but not many of them ask themselves a question: does such a system exist in nature?
Third-party trading systems are bought, which bring their owners a good profit (as they say, of course), and ... almost immediately they discourage by their negative results, disappointing in a purchased masterpiece, which promised the golden mountain.
But the system fails again, and everything starts all over again. After the first system, you buy a second, a third one, and so on to infinity. Probably, you also did it, but have you ever wondered why it happens? Why the Forex trading system, which promised to make you golden, and in a test mode, which showed good results, after its purchase, in the best case, just does not bring any income, and in the worst case - banally sinks the deposit?
The answer is very simple: firstly, there is no system predicted to be a hundred percent successful.
Secondly, a trader is an inseparable part of any trading system, and his success depends on his compatibility with the trading system. If his personality, character and mindset do not allow him to follow all the instructions provided by the trading system, then even using the most ingenious forex strategy he will suffer constant losses.
Pros and cons of other people's trading systems
Now, about the "Grail". Imagine that you have found some undiscovered secret, or just a small feature of the market that allows you to make millions on the markets. Would you sell that secret to others, for a hundred dollars? I don't think so. Much more natural for any of us, quietly earn by means of this discovery, and keep silent, rejoicing at such a turn of fate.
It turns out that if the "Grail" does exist, you will get it only if you find it yourself.
So, is it worth buying and studying other people's trading systems?
Sure, you should! And here's why. To develop a Forex trading system from scratch, a trader needs a long time of searching, learning and mistakes. You can avoid this by taking someone else's ready-made system as a basis.
In this case, you do not have to "re-invent the wheel" of trading. But if you use it directly, losses are guaranteed. This is less true for proprietary trading systems of proven developers, whose algorithms, fine-tuned over the years, require little adaptation, but are we often willing to pay for someone else's ideas?
Most often, we try to make do with either free solutions, or something very, very inexpensive.
How can we do it? Actually, it's very simple, but simple doesn't mean easy.
I know a lot of people involved in trading. Everyone has their own system, their own principles, some people have better success in Forex trading, others have worse. But the thing is that when I was testing my colleagues' systems I was making losses only while they were trading and making real profit on real deposits. The same is true when someone I know takes my trading system as a basis. Why is it so? We are all different, we all cannot see the market and the world in the same way!
That is, taking someone else's tactics as a guiding star for your own trading, alas, you will not get richer. But if you take someone else's experience as a basis, a framework, and adjust them to your own style of work, you can get an original and profitable trading system. Over time, after working with it and gaining the necessary experience, suddenly you start wondering how different the current trading style is from the original trading system, how it invisibly added to it some forex indicators, new rules, although its essence remains the same.
The next thing to understand is that the simpler the system, the better.
There is no need to complicate anything! No system can produce only profitable trades. The secret is not to keep losing trades for long, but to close them on time.
For example, you put a buy order, and the price moved in the opposite direction, do not wait for the order to hit the stop, close the trade immediately! This will save you money, and leave you free to proceed further.
Too often, we, by clinging to a losing order, lose time and opportunities to open good positions. You do not have to make money on every trade, but you must stop losses immediately!
Even if you have half of the trades losing, you will be able to build up your deposit. Believe me, it's really true. Do not turn profitable trades into losing ones!
If you have already made some profit and the price went in the other direction, take profit, do not let the market fool you. A bird in the hand is better! If you took a profit or a loss and the price corrected and moved in the direction you had chosen, do not feel sorry for the lost profit, and even less try to keep up with the market. It will also save you money! It's better to wait for another entry signal.
The reasons of trader's failures are not so much in his trading system, as in his psychological readiness. Emotions and greed have ruined more than one generation of financial traders.

Forex trading is a very serious business!

Many people during the difficult time of crisis try to find an additional source of income, allowing to work at a free schedule and, thus bringing a good dividend, advertising proposals in this field a lot. Most often they promise a quick and stable enrichment. But as they say, new is the same old, but well forgotten.
For quite a long time there is such a business as Forex trading, which helps people successfully solve their financial problems. Moreover, if earlier the entrance threshold for starting trading was several thousand dollars, now it is possible to start trading at international market without large sums. The range of trading instruments has been broadened qualitatively. Earlier the broker was offering trading on nearly ten currency pairs, now the brokerage company's portfolio includes currency assets, futures, stocks and binary options.
Many people prefer to learn a new business in practice, to put their theoretical knowledge to work and to act. But earnings on Forex still depend to a greater extent on theoretical knowledge as you cannot rely on your luck and fortune to run business on this market.
Forex is a market for the exchange of currencies between banks at non-fixed prices. Global currencies are exchanged daily on this international market. Currency rates change every minute, and the differences in the price of currencies can be very profitable.
How justified is the exchange of currencies? Over time, it has happened that certain countries, due to different circumstances, have developed a particular type of service or product. Therefore one country became an exporter-seller and another country became a buyer-importer of goods and services. Imports are bought with the currency of the producing country. It turns out that before you can buy something abroad, you still have to buy the currency of that country. So international trade became the cause of currency exchange. Forex gives you an opportunity to make money by exchanging money.
Anyone who wants to improve his/her life may become a participant of Forex market. No special education is required to operate in the market. Some believe that one has to find the best mutual funds, rating and one can easily earn on acquisition of shares. But this is a controversial opinion.
As noted by experts, the turnover in the Forex market reaches nearly two trillion dollars a day! Not only many investment companies and banks make money here, but also individuals. Some people compare income on currency market with risky games, but there is only one similarity: you cannot rely only on luck in making a deal; otherwise you can lose as fast as win. But possessing information and using it skillfully will bring real profit. It is important to understand that trading is a very serious business!

Forex: training for beginners

Any beginner should learn their trade well before they start to practice. In Forex it is important for beginners not to be fooled by advertisements and promises of instant big earnings, in Forex like nowhere else it is important to practice, learn a lot and work all the time. Only in such a way beginners may gain practical experience, which will help them to earn good money. But first of all, one has to master the basics of Forex trading.
There are two ways to start training - to find a company and sign up for a course or try to study by oneself:
Learning from a broker. There is no shortage of teachers for beginners in Forex - almost all dealing centres and the majority of brokers have developed special training courses for beginners. As a rule, the companies have at their disposal general educational theoretical courses as well as programs oriented at practical training. The training materials provide all the necessary knowledge on how the trading terminal is set up, what strategies are available and how they work. Forex for Beginners also teaches the basics of tactics and explains what trading tools are available.
Choose your training course carefully, remember that you are paying for it with your own money and, moreover, your future earnings in forex will largely depend on the course you choose and the qualifications of the trainer. It is best to do some additional research into the reviews of the "trading school" you are considering. Do not trust schools that are trying to get you to open your first account with them. Most likely they are not trying to train you but to win you over to their brokerage company.
Training on your own. Here Forex for beginners is shown from the other side - the trader is at his own risk, nobody controls him and nobody will make him do his homework. On the other hand, there are a lot of high-quality free materials on the Internet that can be used online for self-education. The main thing is that all information must be qualitative and clear - mistakes in Forex education for beginners may affect trader's work one way or another in the future.
Learning how to trade on the Forex market can be effective with a trainer as well as by self-study; the main thing is desire and persistence, and you are guaranteed a trade trend.

Forex. Who wants to be a millionaire? Myths and reality.

Is it possible to become a millionaire on Forex? This question is usually asked by everyone who enters the world of Forex, often trying on the image of a financial power broker.
But can an average man without special skills get rich by trading on the currency market? Opinions are divided on the matter.
Some of them are sure it is real, the others assure that it is not, it is impossible. In their opinion Forex is a false promo and very doubtful kind of making money on the Internet and one has to be wary of it.
But if you put aside the extreme views and do not listen to others' opinions, and think logically, involving ordinary mathematics, you can come to some interesting conclusions.
The road from trader to honorary millionaire
First of all, let's define the terminology, what it means to be rich and how much income it is limited to. Probably one million dollars is a sufficient amount to feel quite confident in this world and obtain the proud title of "honorary millionaire. Let's try to calculate the possibilities and time for an ordinary Forex trader to reach this objective.
Let's assume that a trader-beginner was trained in one of dealing centres and learned the basics of Forex trading. Though, it is more realistic to say that the education of a serious trader is not limited to the courses provided by the brokerage company only. He will be looking for different ways to improve his skills permanently or at least until his trading system becomes a relatively lossless Forex strategy.
Three stages of becoming a millionaire
Nevertheless, how much a trader can earn at the beginning of his career? Not much. You can say that he is very lucky if he is profitable at all in the first months and even years. A trader's way consists of three development stages. The first one - sad as it may sound - is the account loss, and seldom has anyone ever escaped this fate, and the second is the near-zero balance, when there is no more margin call, but for some reason there is no profit either. And, finally, the third stage, which not all beginners come to, is direct profit from trading on Forex.
Let's assume that the novice trader was initially well-trained and skipped the first disappointing stage. He can probably expect to make some profit. Taking into account the effect of a small start, let us assume that he will be able to go from $100 to >$3000 in the first few years. Thereafter, the trader's fate is complex and hardly predictable. But nevertheless, let us assume that our character is not a beginner any more and he/she earns 50% of his/her deposit for a year. Is it much or not?
In my view, a 10% profit a month is already a good and real profit in the Internet trading. Let's not take into account monthly doubling of our deposit. These figures are also quite real, but they are not typical for most market players and such revenues are often not stable. Let's take into account that the trader takes a part of profit for his own needs, and sometimes he has periods of unsuccessful trading, or he is sick, resting, or just lazy in trading. So, 50% for a year.
How long will it take him to earn a million? About 15 years. Long fifteen years he will work, and work, not play the stock market tycoon, for the sake of making his dream a colourful reality. The truth and the goal is worth it. Therefore, theoretically, it is quite possible to become a Forex millionaire.
The practice shows the opposite. Most of traders do not think of Forex trading as a laborious and tedious job, business, entrepreneurship. They need much, immediately, now and to go to the goal for a long time, they just can not and do not want to. As a rule, such quick starts end up with a quick finish, and the myth of earning big money on the currency market is still a myth for most of us.
Those desiring fast profits are better off trying their luck at casinos. Most likely the effect will be greater there. Forex trading is a type of the Internet business. And to treat this type of income should be treated accordingly. The income comes exclusively through the knowledge, experience and labor of the trader.

The four main fears of a trader or the best traders are not afraid!

What is your mood today? Are you happy or are you sad? Maybe someone has made you sad or happy? Have you ever considered that your emotions can have a serious impact on your trading success?
The last question should be considered more closely. Of course, excellent execution of your trading strategy plan and competent money management are essential aspects of successful trading. However, to work out profitably, you need an appropriate psychological mindset. Of course, you can know a lot about trading and markets, be expert in technical and fundamental analysis, have a good intuition of quotes movements that is inherent to many successful traders.
However, even the most intelligent, competent, interested traders can fail or go bankrupt if they do not take into account emotional signals, warning that certain trading decisions carry risks.
For example, holding positions too long during trading, exiting too early or entering too late is a sign that a market participant has the wrong mental attitude to trade. So let us consider with what kind of mental attitude a trader can succeed?
Mark Douglas's book "Trading in the Zone" talks about "the four primary fears of trading", which are responsible for most trading mistakes: first fear of making a mistake, second fear of losing money, third fear of missing a trade, and fourth fear of not taking a profit.
The author believes that a significant difference between consistent winners and consistent losers in trading is a kind of motto "The best traders are not afraid"!
How, then, do you conquer the fear that most of us naturally come to the markets with? There are a number of recommendations:
1. When analyzing each potential trade, ask yourself what exactly you did to limit the possible risks as much as possible? That risk fuels a sense of apprehension is normal, and there are many ways to reduce it. First, you should make sure that your entry price is the best available price in the last market movement where you are currently trading. For example, if your trades are on a level breakout, you should make sure you set your stop loss outside the potential return limit. If there is a return, wait to receive confirmation of that return. Of course, using a reasonable stop loss is an essential part of any risk management plan.
2. Avoid overweighting any position: your account should provide for several positions that you intend to hold at a time. If any setbacks occur, it is worth reducing this number.
3. You should also avoid trading altogether if you are currently upset or angry, have financial problems or debts, do not feel physically well, are not 100% sure about the direction of the market, or feel like a "victim" of the market.
4. Before you start trading, you need to repeat a simple, but very valuable rule: "Trade according to a plan, and plan your trade. Keep a trading journal, where you can analytically plan new trades before you execute them, with a parallel description of risks and profits. These entries should be updated at the end of each day. Your targets and stops should be adjusted accordingly. As a rule, markets are very flexible and their evolution has to be constantly monitored to avoid unpleasant surprises.

How can a beginner learn to invest?

Keeping money under your mattress is not a good idea because inflation will sooner or later devalue your savings. That is why it is important to learn how to invest your savings profitably, so that the money will generate passive income and provide a bright future for you and your children.
Unfortunately, this is not taught at school or university, which is why young people often have no idea how to start saving profitably when they get their first income. You have to look for options on your own, which is fraught with mistakes and financial losses.
Let's try to learn how to invest without making too many bumps in the road.
First of all, you need to change your mindset and start to see opportunity, not danger. Investors, of course, want to profit from all their investments, but at the same time they know how to take risks wisely and are not afraid of losing money - the main thing that in case of success the income will cover all previous losses.
You can learn to think like an investor with the help of books:
- The Richest Man in Babylon - a book about the richest city in the ancient world, whose inhabitants even then knew the universal laws of money and knew how to use them to enrich themselves.
- Rich Dad, Poor Dad - bestseller by Robert Kiyosaki in which the author talks accessible about the theory and practice of investing in the American realities, this knowledge may well be applied in our country.
- The Road to Financial Independence is an excellent book with lots of tips on investing, which are supported by homework.
After reading this book, you will be able to enrich your knowledge of investment theory: learn how to correctly calculate the profitability of your investments, make a quality investment portfolio and competently apply diversification.
How will you learn how to invest in practice? Some investment companies offer the opportunity to try out their products with virtual money, which is a great risk-free way for beginners. The main thing is not to get too carried away, as real investing is different.
You will get faster results if you start investing real money. However, if you are a beginner, it is a very bad idea to invest all of your money, because the cost of making a mistake is high, and a beginner investor makes many mistakes. It is much better to use the minimum possible amounts (usually 10$ to 100$) - it will save you a lot of nerves and money, and losses will not hit your pocket and motivation hard.
Where to invest for beginners? Here the choice is yours, the main thing is not to scatter - if you have chosen any instrument (metals, stocks, commodities, forex, etc.), then study it thoroughly, and leave the others untouched.
Do not be afraid to take risks, but do it properly - then over time you will become a successful investor.
Good luck!

How do US employment statistics affect forex trading?

The CES (Current Employment Statistics) report is generated by employment questionnaires, which are collected from around 145,000 US government agencies and companies. It contains comprehensive, up-to-date labour market information in the form of key indicators, and gives fundamental forex analysts data on employment levels, hours worked and basic payrolls.
The CES report also contains information on: the number of jobs, average hourly earnings and average hours worked, including data on the unemployment rate, broken down by economic sector. Information for the current and previous months is included.
The report is released monthly by the US Bureau of Labor Statistics on the first Friday of the month following the reporting period (usually at 8:30 a.m. New York) and is the second section of the labour market summary.
The first section of this employment summary report presents the results of the CPS (Current Population Survey), i.e. labour market data from a sample survey of households.
It is perceived by the market as a leading indicator of the number of jobs (in non-agricultural sectors), reflecting the dynamics in the industrial, construction and manufacturing sectors of the economy. It does not include data on jobs in the agricultural sector because of the seasonal nature of hiring.
The report includes information on average hourly earnings (known as the percentage change in wages), which is considered by many experts as a leading indicator of consumer price inflation. The average working week (in hours) is also reported in the CES report as a comparative indicator. Seasonally adjusted statistical smoothing (Seasonally Adjusted) is applied to all data.
It is generally assumed that an increase in employment leads to an increase in consumer spending and thus economic growth, therefore an increase in the working week, jobs and hourly wages all have a positive effect on the US dollar. A serious deviation of this data from the forecasts has a sharp speculative impact on the exchange rate, and the rest of the CES report data has very little impact.
The working week indicator allows tracking the start of a general economic downturn. Sharp increases in pay that exceed productivity growth help identify the point at which inflation increases.
Likely impact on:
Interest rates: an indicator value above expectations or a bullish trend is understood as an inflationary factor for the bond market, causing prices to fall and interest rates to possibly rise. Therefore, a weak report is seen as favourable for the bond market.
Equity market: The impact on this market is difficult to assess. Exceeding forecast growth of the indicator signals a high growth rate of the economy, which equates to an increase in potential earnings. However, the indicator may give rise to higher expected inflation, leading to a possible rise in interest rates, which is definitely bad for the stock market.
Forex: Employment growth above the forecasts (all other things being equal) gives the growth of national currency as it indicates the strengthening of the economy and strengthens domestic demand, which again leads to an increase in interest rates. The impact on the Forex market is speculatively strong as it is considered one of the early economic signals of last month's activity and clarification of GDP estimates. The Fed's monetary policy actions depend heavily on this report.
The report has a special place in forex news trading. Traders are advised to keep a close eye on key employment indicators as speculative volatility in major pairs is usually several times higher than average at the time of data release.

How does Forex trading begin?

In this article we will discuss where to start trading on Forex, what pitfalls await a first-time currency speculator, and, actually, what are the qualities that a currency trader should possess, as well as for whom Forex market is absolutely contraindicated.
It is no secret that a good start is a very important moment on the way to success. And trading on exchange market is not an exception. Most beginning traders make a mistake and immediately open a big account and try to trade on the first currency pair they come across, often without any preparatory work. No doubt, such an approach leads to immediate and tangible losses.
So, if you decide to start currency trading, you will first have to find a broker who will connect you with the giant currency market itself, giving you quotes, conducting transactions and paying out profit.
This is a very responsible step because a lot depends on the broker in forex trading. For example, a trader sees a price movement and wants to enter the market, and it is at this point that the connection between the trading platform and the broker's central terminal is severed. Or the trader wants to withdraw the profit earned, but there are a limited number of withdrawal methods and all of them have huge interests.... There are many options, so you should work hard at the beginning to avoid bitterness and disappointment at the end.
It is best not to be lazy and collect on the Internet reviews of real traders about this or that broker. Besides, there are independent online resources, which develop their own ratings of the currency market brokers according to a number of criteria.
The next step is registration at the broker and downloading a platform. Registration is relatively simple, so there is no need to focus on this stage. Download the terminal and open a demo account. Then it is necessary to get access to more complete information. Most brokers provide it, but it is not superfluous to register at other large financial platforms, read and assimilate as much information as possible.
The most important economic news are crucial in currency trading as they frequently cause significant price movements when the price is "going crazy", marking peaks and troughs which may adversely affect a trader's deposit if he or she has been careless enough to enter the market at that moment. Therefore, the next important thing is to have an economic news calendar at hand. There are a lot of them on the Internet, the main thing is to have it handy and accurately reflect all the necessary information.
Then you have to choose the appropriate trading system. There are thousands of them, all of them are fully described, but it's better not to be in a hurry to choose, because for every trader the trading system is strictly individual. If you have downloaded any strategy, you should test it on a demo account for two or three weeks and only then switch to the real account. Yes, with time you will work out your own trading system that suits you, but for now learn to watch the price and make appropriate conclusions. Never buy anything! No trading system is perfect, and no super indicators that will always trade on the plus side do not exist. So it makes no sense to give your money to some guru in the financial markets, who is more successful at deceiving newbies than at trading Forex. You have to remember that trading without losses does not happen by default, so you should try to keep the number of profitable trades well ahead of the number of losing trades.
A demo account may also help in self-control, because the main factor of success in Forex trading is trader's psychology, which is inconceivable without discipline. That's why you should train yourself to trade properly on a demo account, as if you were trading with real money. You should not grab your head after each losing trade and look for new entries. Practice shows that such actions result in huge losses and often even complete loss of the deposit. The best thing to do after losing a couple of trades is to turn off the terminal and take a rest.
Finally, let us look at a few types of people who should not waste their money, nerves and health to trade Forex. These are:
a) Pessimists. If after each losing order you think that Forex is a scam and you cannot make profit here, then it is better to withdraw your remaining money and forget about currency trading.
b) Those who are convinced that trading is an easy way to earn money that you do not need to learn. Alas, this is a misconception. You will have to study long and painstakingly, and the punishment will most likely be "rubles". Forex requires good reactions, patience, self-control and a constant search for information.
For others, Forex trading can become a springboard to success, provided, of course, one understands that trading is a serious business and not a place to catch windfall millions.

How not to lose in the foreign exchange market

If you want to make money by taking responsibility for your own investments, the best place to do so is the forex market. It is the largest financial market in the world and although it has certain risks, as successful trading requires knowledge, it can prove to be a source of considerable sums of money.
Take the time to take the plunge into the foreign exchange market. Many of those who thought trading was just about pressing the 'Buy' button unfortunately find out their mistake too late. There is much more to trading than that. First, you have to know when to press that button.
Now, let's focus on trends, pips, currency pairs, analysis, indicators, brokers and other things you need to understand before you push any buttons on the trading platform.
Currency movements in the Forex market follow certain patterns and are determined by a large number of factors, such as the economy, politics, GDP, inflation, the balance of trade and many other factors, including even how traders react to these factors. You have to learn how to spot the technical analysis patterns that currencies follow, as well as how to use trends. This is at the heart of all forex trading. Of course, you will not be alone. Various indicators and oscillators, as well as Japanese candlestick charts, will come to your aid. You need to be well versed in these indicators. Learn to read the data that the indicators provide so that you can draw the right conclusions about the future movement of currencies.
A forex trading platform is the biggest help in learning how to trade. Here you will be able to see how different instruments perform under real market conditions. You do not only need the platform to open and close trades. You need it to be able to understand the market. It is advisable to use a free demo account so as not to risk your own funds during training. Trading on a demo account is no different from trading with real money, except of course for the presence of real money.
A demo account and trading platform will help you develop and test your own trading strategy, which is vital if you want to achieve any positive results in the foreign exchange market.

How tilt kills the trader

Everyone knows such important points in Forex trading as fundamental and technical analysis, mathematical part of deals and resulting rules of money management (Money Management). Investor's psychology and its influence on transactions stands a little apart, though not deservedly so.
From his first steps on the financial market, a trader learns to recognize analysis patterns, trend direction and has little knowledge how to apply and use psychological skills which sometimes play a "mean" trick on investor's capital.
It is very easy to analyze opening and closing levels of a deal, its profit or loss, but sometimes it is difficult to evaluate the psychological component of the deal. Psychology is a complicated thing. It cannot be touched, held in the hand or seen on a chart. But it invisibly influences investor's behavior and sometimes turns over a planned profit. A beginner in the world of trading makes mistakes due to lack of knowledge and experience. A professional investor is more likely to make mistakes due to psychological problems.
One of them, the most insidious and least noticeable, is the player going into a state of TILT caused by various circumstances. Professional poker players have coined the expression "TILT" to briefly describe a player's condition, usually inappropriate to his style of play, and which tends to cause losses. This is also the case in Forex.
An example of a common situation that causes tilt in traders: Most often, tilt is caused by losses. It looks something like this - a trader who opened a trade on a tested signal takes a loss. After a certain period of time, the situation repeats. Then it happens again. At some moment the player understands that he needs to exit the market and revise his trading plan, but inner desire to get even creates an illusion that the very trend is about to begin, that very infinite number of pips and the trader freezes in front of the monitor. When the head fog clears, the investor is likely to find that lack of self-control has brought the trading account to the critical line due to a large number of losing trades.
Tilt occurs much less frequently as a consequence of the euphoria of the big prize. At such moments, the trader's consciousness is filled with unearthly joy, he is filled with a feeling of his own uniqueness and genius of his trading strategies. And you have already understood the end of the story when the player regains consciousness.
Whatever the reason of the tilt condition is, first of all, the trader blocks and looses self-control, and this leads to a succession of losing trades. Being in such a state, the investor does not realize that he breaks his own rules and causes damage to his capital by his actions. An epiphany occurs, but sometimes it is too late to change the situation.
Types of tilt -Apparent Tilt. If you find yourself thinking that you have deviated from the trading plan, and your actions do not fit into the developed and admissible framework, it can mean that your self-control sends a "stop! You should stop and carefully analyze the situation, regardless of your current state of affairs, as any further action could lead to an even more confusing situation.
- Hidden Tilt. If you find yourself in a situation where on the one hand all is well and your trading plan is flawless, but on the other hand a series of incomprehensible losses makes you cringe and feel uncomfortable, it is possible that you are under the influence of a latent tilt. Ask a colleague to analyze your trading in order to understand the situation.
The latent tilt is not so strong and therefore doubly dangerous. First of all, it affects the trader's psychological ability to accept the acceptable risk level of the deal clamping him/her in the jaws of uncertainty. Without realising it, the trader trades in an unusual manner.
Exposure to tilt The profession of a trader is a difficult path, often involving a fundamental breakdown in psychology. A professional investor, like a competent tightrope walker, always chooses the path between risk and profit, finding his way to a safe and positive transaction outcome. Therefore, the stress of losing capital or making a profit in this profession is normal.
Resilience to shocks, and consequently tilt-tolerance, is a completely individual norm that cannot be analyzed or mathematically predicted. It is not worth guessing how prepared you are for such an ordeal. It is much more important to know what methods can help prevent it from happening and how to deal with it if you do fall prey to it.
Ways to fight tilt 1. Strong emotions are your enemy. Don't trade when your emotions are running high. Keep a cool head in your account.
2. Don't trade when you're not feeling well, haven't slept well or have people close to you to pay attention to. All these factors prevent you from concentrating, and making a trade that fits the forex strategy you've developed.
3. Adhere to the rule "War is war, but dinner is on schedule". Follow a planned trading plan, which needs to take into account the development of various situations, including those unexpected to you.
4. rest. Regardless of the day's results, allow yourself to relax. Tomorrow will replace today, you will not make all the money during one day, but in a tired state you can do a lot of good.
5. Use the techniques available to relax your body and release tension. This can be yoga, meditation, qigong, swimming in the pool. Anything that will allow you to overload your condition.
6. Thought precedes action. Visualise your trading actions, imagining how your trading goes, according to clear and specific rules. Create a visual sequence of different trading scenarios, including losing trades. Daily practice will develop the necessary reflexes and allow you to stop in time if you suddenly start to drift.
7. Create for yourself a model of emotional state. Refer to it regularly throughout the day to make sure you're in the right shape. If you feel any discrepancies and deviations from the standards, take a break in trading.
I write these lines with knowledge of the subject, because I have fully felt the effects of tilt on myself. In my practice there were three cases when I experienced this condition. The last event of this kind happened to me in the summer of 2011. It took me three weeks to recover. After such a "cliff" I established a postulate that from time to time I should take a two or three day rest in my career, just to observe the market.
The topic of tilt is vast. I have resorted to its general description, without going into much detail. Our brain is a unique computer which is programmable, allowing you to reach heights you never even dreamed of. All you have to do is to learn how to control it, tuning in to a certain frequency and moving in a chosen direction.

How to choose a broker for Forex trading

The first thing a trader who wants to try his hand at forex trading has to deal with is choosing a reliable intermediary - a broker. Unfortunately, in the financial markets, as well as in everyday life, there are companies with a "tarnished" reputation, with a lousy quality of services, or even fly-by-night companies, which, after all-pervading publicity, collect money from potential traders and immediately disappear.
All these points are unpleasant, and in this article we will try to choose a broker solely for practical reasons multiplied by a dose of skepticism and experience.
First of all, you should limit your search to brokerage companies that have been on the market for a long time and have positive responses on thematic forums, websites, personal blogs. You should not be lazy and ask questions to the authors of posts. As a rule, people are always eager to share this kind of information. You can start with a small thing - ask about the quality and cost of service. As a rule, the larger the company, the cheaper the cost. By the way, it's better to avoid new companies, even if they offer better terms.
Then it is necessary to correlate the brokerage company with the amount of potential deposit. If a trader plans to open a cent account for one dollar, in this case financial requirements to the broker may be minimal. And a big amount of money is a different matter. Here again banks and large international brokers have an advantage.
Keep in mind that dubious companies can't operate with consistent quality. In order to make a profit, they will need to zero out their clients' accounts from time to time. They do this in different ways, most often by throwing quotes. In addition, Internet access is not stable everywhere and in case of a heavy load on the company's server, which occurs, for example, during news releases or economic statistics, the Internet can just "drop" and when it is restored many traders find out that they were left without a deposit, because they missed big movement against themselves and just could not close positions or place protective orders. Serious money should certainly be deposited with reputable companies that are not known for this kind of "shenanigans".
Some brokers try to impose additional fee-based services on traders that they simply do not need. Naturally, they are concerned first of all with their own profit and not with the high-quality service to their clients.
Another "slippery" moment is different restrictions or obligations. Usually they are not disclosed openly, and the trader faces this problem after opening an account. More often an unscrupulous broker forces the trader to make a certain amount of deals during a certain period of time. For example - a deal per day. It is not always consistent with trader's trading strategy and, consequently, leads to the drawdown and loss of the deposit.
The broker's assistance is also of great importance. A serious brokerage company has analysts on its staff, who, of course, can give you advice on the near future, paying attention to emerging trends and pointing out the risky moments.
You should pay attention to the possibility of different types of communication with the broker, in order to be able to manage your positions not only online, but also by using a landline and mobile phone if necessary.
Additional services will also speak in favour of the broker - various training, informative, analytical and other materials will facilitate the trader's work and make it more profitable.

How to choose the best time to trade forex (time management)

When trading on financial markets, not only trading strategy and money management are very important for success, which together make up a trader's trading system, but also the timing of forex trading.
There are four distinctive trading sessions on the currency market: Pacific, Asian, European and American. Due to the fact that the Pacific and Asian session is not particularly volatile, it makes no sense to consider the Pacific session separately, so let us limit ourselves to the overview of the three major session periods.
Forex trading hours and the description of the trading sessions
The first one in the day, from 00:00 GMT is the Asian trading session. The main participants here are traders from South East Asia. For Russians, except those living in Eastern Siberia and the Far East, this is not the best time for Forex trading. However, a number of traders living in the European part of the world prefer to trade during this time, using the quiet dynamics of assets and low market volatility. There are even special strategies for the Asian session.
Nevertheless, the main movements even with such popular Asian currencies as the yen occur in other trading sessions, although regional news can cause a burst of currency pairs.
The main things to pay attention to when trading during this period are news releases at 03:00 and actions of the People's Bank of China, which is a major buyer of foreign currencies and periodically tries to correct the yuan.
During European trading session that starts at 09:00 the market activity is higher. Traders process overnight news and monitor various economic indicators.
The hours between 09:00 and 13:00 (Greenwich Mean Time) are probably the best time to trade forex.
From 12:00 to 14:00 hours, important news are usually published for Germany and the Eurozone, and then data from the UK starts coming in. The whole flow of information is processed by the market until about 16:00.
The most aggressive trading session is American session, which starts at 16:00, and at 16:30 the first block of important news is released. Traders work with the information for about two hours, then market activity begins to decline. The exceptions are the days of Fed meetings followed by the conference of the Fed's head. At such times volatile forex trading will last almost until the Asian session starts.
What is the best time to trade forex?
Forex trading is available 24 hours a day, that is why beginners have a false impression that you can always earn on the currency market, if you have a free minute for trading. In fact, this is not true, as not only trading sessions differ in the degree of activity, but also in intra-session periods. Professionals, as a rule, make profit when quotations move actively as much as possible.
In this regard, we can distinguish the most attractive trading hours on forex:
- The intersection of trading session times. Here you may use Forex trading session indicators, which are easily installed on the charts of currency pairs;
- Release of important news, reports, releases, publications and economic indicators;
- Actions of major players such as major central banks.
However, traders should keep in mind that trading Forex news on the one hand allows traders to make quick profits and on the other hand they can take losses, so scalping aficionados are advised to close all deals at these moments.
During the big players' entrance into the market it is also better to refrain from trading, because it is initially unclear about their plans.
Unfavorable days for trading are those when regional exchanges are closed and the Central Bank is not working. Assets during such periods move in narrow corridors and market activity is minimal.
Friday is also not the best time to trade forex, when most market participants begin to take positions, and it is difficult to predict the behavior of currency pairs in such conditions.
Monday morning is not the best time to start trading, as Friday's movements are corrected and weekend news are worked out.
To sum it up, the best time to trade is Tuesday through Thursday, which is not overloaded with news and speeches of monetary authorities.
In any case, you should use the rules of your trading system before making a decision and not give in to fleeting impulses of currency assets for fear of losing profits. Just in and just out are the rules when it comes to building up your capital, and without TS signals it is better to miss even the best time in forex trading than to get into the market and regret it for a long time afterwards.

How to choose currency pairs on Forex?

Every trader, who opens a trading terminal for the first time, first of all selects the currency pair or several assets, which they consider the most suitable for trading,
As a rule, beginners prefer the Euro (EUR/USD) and other popular currency pairs, like GBP/USD, USD/Franc (USD/CHF), USD/JPY, but avoid Canadian, Australian, New Zealand and exotic currencies.
The choice of a suitable currency pair is a very serious matter, and there are hundreds of options, often conflicting with each other. Each trader will argue for the asset they have chosen.
However, every choice starts with familiarity. And for acquaintance without serious consequences the demo forex account from the reliable broker can be the best solution.
The price dynamics on Forex market varies during the day. The time of highest activity is called trading sessions, while the time in between is called the Intersession period. There are Asian, European and American sessions.
You may trade on currency pairs both during and after the session. Exactly how to trade depends on the trader's strategy.
An important characteristic of currency pairs is volatility, i.e. the range of price fluctuations during a certain period. This is one of the major parameters to be considered when choosing a currency pair.
An absolute champion in volatility is the British pound. The currency pairs GBP/USD and GBP/JPY are prone to sharp movements. One of the most stable currency pairs is EUR/CHF.
Those who prefer aggressive trading should choose volatile currency pairs, while those who prefer a calmer trading style should choose "more balanced" currency pairs.
Every pair has its own personality, and you will find some currency pairs that move in similar ways during certain periods. The most typical examples of currency pairs are GBP/USD and EUR/USD, AUD/USD and NZD/USD. It is risky to build a strategy using only allied relationships. The global trends of these currency pairs are very similar, while the formation of intraday price movements can be very different during the respective sessions, under the pressure of national news.
Another typical question is: "Which currency pairs will give the biggest profit? Here the answer is unequivocal: those that are the most understandable to the trader. Beginners and those who are planning to add new trading tools to their arsenal should first take a closer look at the nature of currency pairs that interest them. Demo and cent real accounts provide you with an opportunity to get to know each other, develop and refine your trading strategies without any appreciable risk.

How to choose the right broker for Forex trading?

A trader wants to see the broker as a neutral party, if not a real assistant and prompting person, who is not going to throw sand in the wheels, not to make fairy-tale quotations and not to steal clients' capital.
When choosing a brokerage company there are 10 main rules which every trader should know.
1. A broker must have a history.
Those companies which have recently appeared on the market can be divided into two categories:
- Those trying to improve the world of trading and attract clients by extending terms that other companies do not have;
- One-day brokers who often change their name, website and location, etc.
At the initial stage it is difficult to determine the reliability of the broker, so it is recommended to work with reliable companies, studying the reviews of their work published on independent websites.
2. Super great offers that are offered to the client.
This, at the very least, should alert you. You should not believe the fairy tales, remembering that free cheese comes only in a mousetrap.
3. The amount of commission.
You might think that a good broker is one with a low commission. But it's not quite true. The broker will always get his own. Something may be more and something less. And the other one will take the opposite.
The situation here is somewhat reminiscent of the mobile phone operator market. Different tariffs, but you will still spend about the same amount of money.
4. The bigger the broker, the better?
That's what many traders think. And also if it's related to a large state bank, that's perfect. An overseas broker is the top of dreams.
It makes a lot of sense. But a big broker is not always a good thing. Because an individual client is a small grain of sand to him, and he doesn't really care about this small client. Here there are hundreds of clients per manager and you just can't get in touch with them.
A broker's relationship with a bank is not always a guarantee of reliability either.
With foreign brokers there may be a situation where it is very easy to deposit money, but much more difficult to withdraw it. There may also be no Russian-speaking manager, and in general there are difficulties in communication when dealing with various problems.
5. Bonuses, promotions and competitions.
This is always a plus. For example, a bonus when making a deposit.
6. Availability of ECN accounts.
These are accounts with direct access to the interbank. Although not every trader needs them, but it's a good indicator.
7. Availability of MetaTrader 5.
Most of the forex brokers do not offer the possibility to trade on the 5th version of the platform. It should be said that the community of traders is not very enthusiastic about MetaTrader 5. Most of them continue trading in the 4th version. But for beginners it's better to start trading with the new version of MT, because the future is behind it.
8. Participation of the broker in ratings, winning all sorts of nominations.
This indicator is not a guarantee of reliability. After all, any nominations, ratings are commercial projects, where the winner is the one who pays more money.
It is better to pay attention to the participation of a broker in the Center of regulation of currency financial instruments and technologies - SRO NP CRFIN. Its website is at this address:, and the blacklist is here: It is the only organization in the Russian Federation that actually regulates relations between Forex traders and brokers.
9. Service.
You need to pay attention to the level of service provided. For example, whether there is a personal manager who is ready to answer all the questions, convenience of deposit/withdrawal of funds, etc.
10. Availability of dealing, training courses, analytical reviews from professional traders of the company.
It is very important for a brokerage company to have a dealing room (a specially equipped room where traders trade using the broker's communication facilities) where they can come and trade. It is excellent if every trader is provided with a personal manager.

How to create an effective forex strategy

A trading strategy is a certain algorithm, which clearly describes the moment to enter the market and the conditions to exit the trading process.
Algorithm of an effective trading strategy Let us briefly remind you the basic postulates of a working strategy algorithm.
A trading strategy should describe the following points: Entry into a trading position; The direction of the order (buy or sell); The level of profit taking (take profit) in the case of a successful development; The level at which losses will be limited (stop loss) if the trade is unsuccessful; The conditions when it is necessary to make corrections (change of "take profit" and "stop loss" values); The conditions, in which you must immediately withdraw from the market.
Only when a trading algorithm takes into account all of the events that can occur during work on the International Exchange Market, the trader will be cold-blooded and reasonable. There is no place for intuition, guesswork, predictions, gambling and other nonsense on Forex. Only a complete (considering all possibilities of events) trading strategy can bring statistical profit (positive sum of all losses and gains) during infinitely long time period.
Are trend-following forex strategies always effective? An effective trading strategy must take into account the fact that prices on Forex can be in an uptrend, a downtrend and in a sideways corridor (flat). Accordingly, our trading algorithm should clearly identify the situation on the market in order to choose one or another set of actions.
Trading strategies that work successfully in a trend, will be ineffective in the price corridor (correction). And trading strategies that are successful in corrections will make losses in a downtrend or uptrend.
Basically, to create an effective forex strategy, you need to describe three processes in the algorithm of actions:
How to determine the market situation; Form an algorithm for trading in the price corridor; Generate a trading algorithm when prices are rising or falling (during a trend).
Every time trader starts his work he should define the market trend, choose suitable trading strategy and follow it till the market situation changes. As soon as the market situation changes, you should choose another trading strategy and start implementing it.
If a trader follows a trend only, during a sideways price movement, he should take a wait-and-see position and stay out of the market until the trend starts.

How to exit a Forex trade in time?

Most Forex textbooks, manuals, training courses emphasise that correct entry into a trade is the most important factor in profitable trading.
Forex trading for beginners means the search of such trading system, which would provide almost one hundred percent right entries. And that is it! Some people get hung up on this idea for a long time and lose themselves for online trading, others, after spending a lot of time, finally realise that it is impossible to find such a system. A win-win forex strategy is a scam. Few people focus on exiting a trade, and in vain. After all, wrong exit just as reduces the profit, and even leads to the loss.
Absolutely any system with probability of correct entry, even 50X50, will do. And in this case, if you follow the conditions of money management, the ability to find a place for the correct closing of the position, profitable forex trading will be a reality.
How to exit a position in Forex? There are several important postulates on this subject for every trader.
1. Exiting a trade is more important than entering it. Missed entry into the market does not promise a trader losses. Missed exiting can not only nullify profits, but also lead to losses.
2. Exits from a trade are subdivided into predictable and situational. Predictable exits are calculated in advance, while situational ones are implemented, of course, according to the situation.
3. Predictable exits from the transaction include stop-loss and take-profit. The situational exits are closing from the market according to the trader's system signals. The intermediate variant between them is closing on the trail.
4. What is a proper exit? The proper exit provides that the professional trader simply will not enter the trade, if the projected exit is too unprofitable, not corresponding with reasonable risks. Thus, if a trader sees a good entry into a trade, his trading system gives a very strong signal to open a position, he will not enter the market if the stop-loss on this trade is planned too large.
It should also be remembered that after setting a stop-loss, a professional trader will never move it in the direction of increasing losses, which is typical of many beginners.
5. Is Take Profit beneficial? Trading on Forex, where exits are limited to fixed Take Profit is in most cases irrational. However, take profit can be set far away, at some significant level, and gain a profit by trailing or moving the fixed stop loss. But if the market situation suddenly began to develop not in your favor, and the trading system gave a signal to exit the transaction, it must be done immediately, without waiting for the price to take profit. Such an exit may not take place.
And the most important condition is highlighted separately. Whatever the rules of withdrawal from the trade in your trading system are, they must be strictly adhered to, without changing them during an unfavorable trading situation.
Discipline is the main factor of profitable work of any trader.

How to find a forex broker with an excellent reputation?

Forex is a foreign exchange market that is gaining more and more popularity every year. In today's world, the Internet and access to information are developing rapidly, making it possible to trade while sitting at home, on the road or even in a traffic jam.
The volume of forex trading is growing fast and according to the latest data, amounts to nearly 4 trillion dollars every day, which increases the number of depositors. Attractive conditions are specially created to attract more and more traders to the currency market. Only large companies take part in the market. In fact for this purpose it is necessary to get the license and to have a considerable capital. Physical persons have no opportunity to take part in trading.
Why do I need a broker?
When trading on the financial market, a trader earns money on the difference of sales and purchases of currencies, securities, precious metals, oil, etc. It is not possible for a new participant to start trading on this market, because the necessary amount of the transaction is about 5 million dollars, plus the commission payment is added.
But that's not all, you have to have a computer platform for trading. The volume of participants is growing, and having a large number of individuals on the market would lead a well-established system into chaos, which is wrong at the very least. That's what agents are there for, to handle situations. Brokers are involved in transactions both on their own behalf and on behalf of individuals.
There are as many brokers as there are tempting offers from them when registering. Some, for example, at registration and depositing add up to 100% to your account. Others allocate a certain amount of real money, on which you can trade. They also organise competitions and promotions specifically for you to receive additional funding from the broker into your account. All this is done so that you can bet, as they have direct income from it.
In any case, before you choose which broker to work with and to whom to entrust your capital and desired earnings, install the program for testing and register a demo account. Determine for yourself a convenient time when you will take part in trading, and find out whether the working hours of this broker coincide. Next, test the software in detail, how quickly you will respond to applications in trading and assess the online support in action. The choice of who you work with is very important, because it is the support you need to ask questions and make direct money.
After working on a demo account, testing is not over. You need to open a real account, put down the minimum deposit and trade on the platform with real money and in real time. It often happens that the demo is faster than the live account.
A company can provide a trader with funds, increasing their financial income. A large number of brokers provide forex forecasts, which can be relied upon for buying and selling currencies. This information is made available throughout the trading session.
How to choose a reliable broker
There are basic criteria for selecting a broker, these are experience, favorable terms for trading, prompt work of the company's team, and its technical support, work of the platforms in the network, legality of the broker.
The first thing worth considering is trading conditions. After all, if there is one thing that does not suit a trader, there is no point in analyzing the broker further. Requests for opening and closing orders should be received and processed very quickly in order to minimize your losses. Processing of an order, by standard, should not exceed 4 seconds. If a broker assures you that they work for free, you should not trust them. They make a profit on commissions for each of your trades, but there are pitfalls.
Before you choose any broker, check if they are legitimate. There must be licensing and registration documents, which show the legal address, availability of an office, and documents authorising the operation. Find out how to contact the management of the brokerage company. Find out which banking institutions the broker works with and how to deposit and withdraw funds. Make sure that the banks the broker cooperates with are large, then this is another big plus to have confidence in the company you have chosen.
Brokers with impressive experience inspire confidence in traders. The most reliable way to analyze the performance of the chosen broker is to check it yourself while trading, rather than trusting dubious reviews. A trader can only get and check the whole list of services provided if he opens an account and trades. Reliable and stable companies are calm about the trader's doubts and create all conditions to dispel them and start a long and high-quality cooperation.

How to invest in PAMM accounts?

The foreign exchange market has become very popular over the last decade, attracting more and more players to try their luck at trading. However, Forex trading is a very complicated business, which requires a lot of experience and specific knowledge, because chances to earn anything at the currency market are equal to zero for an untrained person.
Naturally, learning the basic rules of trading and gaining experience takes a lot of time, which not everyone has. One of the solutions to this problem was PAMM account technology, which appeared a few years ago.
With the help of this technology, you can put your money under the management of an experienced trader, who is professionally engaged in trading on the currency market, thus saving yourself from having to work at the exchange market on your own. The resulting profits are shared between the trader and the investors (the people with whose funds he trades).
However, as can be easily guessed, there is no guarantee that the PAMM-account with your funds will be forever profitable and please the investor with a constant income.
In other words, there is the possibility of losing all the money deposited to the account, as there is no guarantee that the trader you have chosen will not go into deficit as a result of unsuccessful trading. Therefore, when investing in PAMM accounts, it is very important to follow certain rules that help reduce the risk of losing your working capital.
So, the first rule of any investor - it is to adhere to diversification. Since forex trading is a risky business, you should not put all of your available funds in any one account. Spread your money evenly among several accounts of different traders.
The more profitable accounts you find, the better. This will not only protect you from losing all of your money, but will also increase your income, because if one of the traders suddenly goes into deficit, the profit made by the others will make up for their unexpected losses.
The second rule is that one should invest only in accounts that have been trading for at least a year. The fact is that the currency market is subject to the laws of economics, and, as we know, any economic situation is a very unstable thing.
That is, forex trading is also not stable, there are both easy periods, and difficult periods. Therefore PAMM-accounts that have been in existence for at least a year have gone through several different states of exchange, which cannot be said about accounts with a life of less than a year. This means that one-year PAMM accounts are managed by professionals who know their business very well, so the probability of losing money on such accounts is low.
And finally, the third rule - always monitor the status of your accounts. You should not use PAMM accounts as an alternative to a savings book, because even the most successful trader can easily lose your account, since forex trading is a high-risk activity. That's why you should withdraw your profit regularly.
Also you should periodically calculate the overall profitability of your capital and if it has significantly fallen, accounts earning less profit during the last several months should either be substituted with new, more profitable PAMMs or excluded from your investment portfolio distributing the released funds evenly among the remaining accounts.

How to minimise losses in forex trading

In forex, a trader can increase his or her initial capital several times over a very short period of time. But on the other hand, there is the same risk of losing all your investments. To avoid painful losses, you need to learn how to manage risks.
How to cut your losses in Forex?
Let us review the basic methods of risk management in Forex:
1. making sure you use stop-loss orders; 2. trading a small part of your deposit; 3. the trend is your friend. Transactions are only made on the trend; 4. Psychology and management of emotions.
Let us study these aspects in details:
1. Protective stop-loss order. Professional traders have the following expression "limit losses and let profits grow". What does it mean? It means do not sit and wait for the price to go against the direction of an open position. Many people look at the chart and think that the price has already gone too far and needs to turn around. But the problem is that the price does not owe anybody anything! The market determines the trend direction by itself, and it determines where the trend will change, so it is not wise to sit and wait until the reversal point is reached or not. It is easier and more economical to always put a stop loss and cut losses.
2. Trade a small part of the deposit. You should not open transactions with the maximum possible lot. Yes, this way you can double your deposit in a few minutes. But, the first wrong trade leads to total loss of all money. That's why trading should be protected as much as possible from a period of failure. If you allow yourself the chance to make a few mistakes, and in this market mistakes always happen, you can continue your trading afterwards.
3. Trade on the trend Trend trading is also one of the key methods of limiting your risk. Yes, you can enter when the trend is over and the market is about to change direction or go flat, but trading against the trend is risky. The beginners, looking at the historical charts, see that they could buy at the low and sell at the high. In practice, however, this is very rarely the case. As a rule, all profitable forex strategies give an entry point when the price has already passed some part of the movement. It is better to lose a little profit than to take a loss.
4. Psychology. This is the last factor we will consider here, but it does not mean that it is not the most important. Psychology is the key point in achieving success in trading. Even having a profitable system you may be afraid of losses all the time, cutting off profitable positions thus failing to gain profit. Or you can wait for the price to reverse holding unprofitable position and thus increase your loss even more.
The considered issues of loss minimization in trading are common and crucial to success. But without a profitable trading system, risk control will not help you make money, although this is not its primary purpose.
Limiting risk in the first place is designed to keep losses at bay. If you learn to cut your losses in forex, you will very soon learn how to make real money, but this requires you to minimise your risks and keep your deposit.
Successful trading with low risks!

How to reduce risks in Forex trading?

Forex trading involves a certain degree of risk. Only by consciously managing your capital you can save money from loss, reduce risk and make a profit. Financial consultants recommend basic ways of reducing risks in trading:
- Investments should not exceed half of the capital. Traders are advised to keep some capital in reserve to be able to use it in unusual situations and for further efficient use.
- Invest no more than 15% of total capital in any one position. This approach allows you to protect yourself from big losses on one deals at the expense of profits on other ones.
- Open new positions only if the market situation is predictable. Trade in the direction of the trend, the opposite direction is risky.
- It is advisable to risk less than 5% of the investment amount. This principle allows you to protect yourself from huge losses.
- Diversify your investment portfolio. Be reasonable and prudent in doing so, keeping a balance and not spreading funds out in multiple directions.
- Use a Stop Loss. These orders allow you to fix losses and protect yourself from losses due to adverse price movements. In this case the technical means come to the rescue, which simply close the position at the moment "X" if "the market went the wrong way". Traders, especially beginners, often feel sorry for closing a losing trade. They take more and more losses, depriving themselves of maneuvering power, and more often than not, they lose their account completely. It is advisable to place orders right after the price, moving them gradually to the breakeven zone.
- Determine a profit/loss ratio in advance. They need to be balanced out in order to reduce your losses during an unfavorable market development. If you cannot achieve a favorable ratio, you should not open a trade.
- Work on several trading assets at the same time. Some open short-term and limit themselves to stop orders executed when a specified level is reached. Stop orders for trend positions are placed for a longer period. The position is maintained if price movements are insignificant.
If the trade develops negatively, the trader can fall into the "credit pit". Most often it is caused by high leverage provided by the broker. This option is very risky and rejecting it is one of the first ways of avoiding huge losses. Increasing leverage increases the risk of large losses, even if the trend change is minor.

How to reduce the risks of Forex trading?

The desire to preserve and increase one's capital is inherent in almost every adult. Nowadays there are many ways to increase your income apart from the traditional salary. Some people open a deposit account or buy gold and currency from a bank, some people gather information about Forex trading, and some people look for extra ways - all of them are good and effective to a different extent.
One of the popular types of additional, if not main, income is stock trading. Of course, it is associated with risk, but there is also a chance of making a lot of money in a short time. Probably the most famous in this segment of earnings is Forex market.
This financial market is probably the easiest and the most understandable way to start. Many beginning traders trade here. Forex has worked out plenty of possibilities and auxiliary tools for beginners. The most obvious way to reduce risks on the exchange is to gain experience. You can try your hand, learn the basics of exchange trading in a demo account. Here one receives virtual money, which cannot be cashed out or withdrawn.
As soon as a trader starts to feel confident working on a demo account, it is worth to try your skills in real trading. When starting to work with real money many traders are trying not to risk much. This fear is quite understandable and justified, nobody wants to get burned.
There are several basic methods to reduce the probability of losing trades. First of all, capital losses must be controlled. The maximum allowable amount of investment should not exceed half of the total capital (50%), while experienced traders advise against risking more than one third of the total amount. Each position should be worth no more than ten percent.
It is a good idea for a novice trader to use a handy strategy. The most popular ones allow better control over changes in the market situation. Many players resort to the help of robot-advisors. Automated systems do not experience emotions and fatigue and allow not to miss a chance and make a profitable deal.
It is also worth remembering about the possibility of setting stop orders. They are also known as stop loss. This option fixes the price at which a position is closed in case the market goes the wrong way. It is important for a trader to know how to correctly assess their risks in a certain deal and analyze the market.
One more variant of risk minimization is opening of several positions for different instruments. These are so called hedging strategies, which are used by big players of financial markets. They significantly reduce the possibility of profit, but even more insure against losses.
Several options to reduce the risk must be applied at once. All of them can make trading on the exchange profitable. However, decision is always up to trader, unsuccessful deals happen even to the most experienced participants. The main thing is that they do not cause total loss of the deposit.

How to start effective forex trading

Forex is one of the biggest financial markets, operating almost continuously on all continents. Currency trading is done through brokerage companies which provide traders with special trading platforms. They can be downloaded and installed on computers or mobile phones.
It should be noted that trading conditions of different brokers differ from each other. That is why before starting to trade on the currency market one has to thoroughly study the reviews of Forex brokers and choose the company, which best meets the trader's requirements.
The essence of Forex trading is buying foreign currency at one exchange rate and selling it at a different, more expensive rate. The difference between the buying and selling price will be the trader's profit
The unit of currency to be exchanged is the pound sterling, the dollar, the euro, the yen, the franc. When concluding a new transaction, it is not necessary to possess the whole amount of money, it is enough to pay a certain part of it, which is called a margin. After a margin payment, a broker deposits the balance for a trader. Such service is called leverage.
All of the above basic operations are seemingly easy, but to make a profit it is worth to go deeper into the exchange system. Where do you start?
Forex trading may be more than just a hobby - it may be the main way to make some serious capital. The first introductory step will be to study exchange rates, the trading system in general, in order to obtain a general understanding of the whole scheme.
Then it is worth to go into detail on financial terms (futures, contract for difference on the price of currency transactions). This will help you analyze market conditions in depth and determine how you will trade to obtain a positive result and develop your own personal strategy.
Another important point is a trader's readiness for stressful situations and ways out of them. Overcoming different kinds of obstacles will guarantee your success. Finally, we recommend reading books of classics of trading on financial markets, the founders of most current trading strategies. They are Bill Williams, William Gunn, Alexander Elder, Thomas DeMark and others.
The Forex market is an internet marketplace of intellectual labor. Especially for traders all possible conditions for work and business development are created here.
The main advantages of this exchange for beginners are simplicity and availability, possibility to gain profit every day and every hour.
An additional advantage is the uninterrupted work of the exchange, so you can start working at any time convenient for you.

How to start Forex trading?

The main question for beginners is: how to start trading? In order to start earning money you have to study all the information on the system thoroughly. You have to find out what you want to achieve and what you are ready to do.
To trade forex correctly, you should remember that you need to study trading materials and everything that might be related to the market in general. Books, courses, the Internet, etc. will help you with this. The knowledge you acquire will be the foundation for your further work.
The basic rules that will help you succeed:
1. Read the literature. Read up on the world's greatest traders;
2. Select a broker to guarantee your performance and profit from it;
3. Try out the demo wallet in order to understand the whole principle and the functionality of the system;
4. Begin to work with real money gradually. In case of failure do not get upset. These are the laws of the market, and there is always a risk of loss;
5. Always use all analytical tools to develop your system. This will help you make a profit;
6. You have to work out your own strategy, and if you test it successfully, you have to stick to it;
7. Always be in constant growth: you must not forget to study different types of information.
So, what is Forex trading: is it a scam or real money-making?
What is it? After all, is it a scam or a real tool for making money on the Internet? This question interests all those who wish to profit from work on the Internet. Rumors about the deception of this system have been circulating due to some negative feedback towards this platform. Some users claim that Forex has cheated them out of money, duped them and deprived them of their options to earn money.
Such reviews may indeed be real, but it is worth clarifying one fact. Before they started, these users asked themselves what are they willing to do for profit? Were they prepared to take a loss? After all, this is the market, there is no guarantee that you will make a profit. Have they prepared themselves before starting their work? Have they studied the necessary materials, conducted analyses, etc.? Most likely, these users were not prepared to start this kind of work, which led to negative feedback later on.
We are not saying that forex reviews should always follow only a positive trend. But it should not be viewed only from the negative side. There are many examples, and quite famous ones, who have received a decent amount of money while working on this exchange.
The second reason for the negative side may be scammers. Such people are everywhere, not only on the Internet. Their main activity is making money on users and disappear in an unknown direction. You must learn to distinguish between offers of a profitable nature and offers that look like fraud. This way you will protect yourself and your wallet. We have already mentioned that the choice of a broker is an important stage. And it is worth to be very careful not to fall for fraudsters.
The third reason for the negativity in the direction of the exchange may be the market system itself. It is worth remembering that the market is not a predictable phenomenon. No one can give you a complete guarantee of success. You need time to get used to its laws and adjust to them. This will help you in your future work and earnings. Beginners are not always happy with such an outcome and they are beginning to display some angry opinions about working in the Forex market.
Only the already experienced user can understand the whole process of working with currency. And so we conclude that negative conclusions are spread only by those participants who are not ready to learn this field of activity. Most likely, they initially did not understand why they came to this system. There is also the factor that everyone wants to make a profit from the first minute, which actually does not happen in the market. It is worth working on yourself, among other things, to make a profit. But, unfortunately, this may not be clear to everyone.
What do you need to do to get started?
This is the main question before you start working on the exchange. Everyone is interested in it, and rightly so. In order to get started you have to do some steps:
1. First think and determine exactly, whether you need it. You can always earn extra or basic income. But are you ready to improve every day to make such a profit?
2. If your answer to the first question is yes, then it's worth moving on to study all the necessary material for future work. For this you will have to read a few books and take some tests.
3. Choose the broker with whom you will be confident in receiving and preserving your income.
4. To test the demo version in order to determine the system functions, and understand the principle of work. And also to understand what you can do.
5. And finally, to start with a real account, with which you will be able to earn income. Do not forget about the rules of money management.
Is it possible to make a profit?
The main advantage of this system is that you can start earning here from scratch. It is available to both experienced and new traders. There are different promotions offered by brokers, which are aimed specifically at traders with zero balance. You need to follow the news feed and keep track of these offers. This will be a good start for you.
How much money can I get here?
This is a very topical question, but it's not easy to get an answer to it. When you work in the market, there are many factors that influence your profits. Some of them are:
Your experience in the field; What has been your demonstration activity, has everything been learned, etc.; The course of your analysis on the realities of the markets; Readiness for different kinds of outcomes; Application of money management rules; Taking responsibility for your decisions. You should also add the following factors to your profit composition:
1. The state of the market at the time of the operation;
2. The size of the depository;
3. The presence of a profit-seeking strategy.
In the main, users say that it is possible to make up to twenty percent of the investment. In case of good performance, this amount sometimes goes up to 40% of the profit. People with a lot of experience in this field can be proud of their earnings of up to one hundred percent. But to start earning that kind of profit, you have to gain experience in the field, and you have to keep in mind constant development, which will be aimed at generating income.

How to start trading for a beginner

Probably every modern person, even those who don't live in a big city, has access to the Internet either through their personal computer or their smartphone. The World Wide Web has become so vast that it has even enveloped remote settlements, in which not even ten thousand people live.
It makes sense that under such circumstances, many people try to find ways to make money online. Trading in the financial markets remains one of the most effective ways to make money online.
Trading on stock exchanges and over-the-counter markets has long been available, for example, a trader only needs $10 to start working on Forex. In addition, traders have free demo accounts which act as training simulators. Anyone can learn how to trade in the financial market using such a demo account.
Demo deposit What else does a person need to become a trader? First, as it was mentioned above, one should have access to the Internet. Secondly, desire, because it is difficult to count on success without it. Thirdly, a trainee needs training material which will help to get acquainted quickly with the peculiarities of financial market and start learning the peculiarities of trading.
How to learn how to trade fast
Such tutorials and manuals are available on the Internet absolutely free of charge. There are specialists in the trader's community who periodically share their knowledge and experience.
Certainly, you can try to grasp everything on your own, without resorting to the experience of your colleagues, but in this case learning can take quite a long time. It is not rational to "re-invent the wheel" and make up for things you could have learned about in advance.
What can you do to shorten the learning curve of trading in the financial market?
Watch analytics of experienced traders to understand exactly how they analyse the market; Study video lessons of professional speculators; Take part in webinars and master-classes, which are periodically held by these or those specialists. In other words, it is desirable to use all available sources of information in the learning process. A comprehensive approach to training will greatly enhance the effectiveness of your training. Luckily, the Internet already abounds with all sorts of websites and blogs with useful information.
Paying for trading education
Do not be in a hurry to part with your money by purchasing courses, strategies, indicators, etc. As a rule such materials are not sold by the best market experts. Even if you buy a well-publicized strategy you have all chances to get a description of a system of average efficiency, which is freely available.
Try to find information about really professional traders, and after that seek out their lessons and webinar recordings. Such material, although free, can be much more helpful than paid courses and lessons.
Learning how to trade takes time and effort, but it can be done for free if you choose your content carefully. Ironically, it is among the free lessons and videos that you can find quality information to help you get to the next professional level.

How to start trading on Forex?

This article, first of all, will be useful for beginners on Forex market.
Many beginners are asking the following questions: "How to start trading on Forex currency market, where to do it, first steps in trading" and other similar questions.
The article is written as a step-by-step guide for such traders. And if a trader already has experience and skills in Forex trading, in which case they will not be interested, so there is no need to waste their time.
Generally speaking, it is possible to start trading on the financial market after following just four steps. Let's consider all of them in details.
Step one - select a broker Every beginner in the Forex market should start with the selection of a reliable and suitable broker. Reliability, honesty and stability will determine whether a trader will make a profit or a loss on his trades on the financial market. And it means whether he will be able to earn real money.
The broker chosen by a beginner should have a license from any regulating and supervising body of brokerage organizations. If a brokerage company has such a license, then all practicing traders who work in this organization, accordingly, have guarantees about the safety of their money. An honest broker will never cheat its clients, delay payments of the earned money, create technical malfunctions at the trading platforms, cheat with the quotations.
A reliable broker always puts his clients' interests first. It has a good and responsive technical support service, offers them favourable trading conditions, various bonuses, promotions and tournaments. But most importantly, it ensures safety of trader's and investor's deposit, safe deposit and withdrawal of funds, guarantees of their receipt.
A really good broker does not only care about its own benefit, but also about making money for its clients. Free training for beginners as well as opportunity to trade on demo account without any risk of personal deposit money are provided for that purpose.
Step Two - Training At this stage you need to learn all the terminology of trading, otherwise a beginner will simply not understand what it is all about. Understanding the market is a complicated process. Traders go through this process for years as the financial market is not standing in one place and it is constantly changing because the market conditions are changing. An advanced trader always keeps up with the market, he has a complete picture of all market changes.
Any brokerage company offers on its website initial information, which is available to absolutely all newbies. For deeper study it is recommended to study video lessons, attend webinars.
The third step - training and probation After a beginner has learnt the basics of Forex trading he/she has to do his/her traineeship. It is not necessary to start trading on a real account right away. Brokerage companies offer a demo account to all comers. It is a special, virtual account, where one can trade for virtual money without risking one's own deposited funds. Thus, financial risks are excluded during training.
The final step is choosing a trading strategy All stages of learning and starting to trade on the financial market are very important. Profit or loss on deals will depend on the trading method the trader selects. In most cases any trading strategy is remodeled by the trader himself so to say "adjusted to his own needs" for better profitability. This is a normal working process.
Only after a beginner gains stability on a training account he/she may move to the real market and trade using his/her own money.

How to survive on Forex? 5 rules of successful trading

Forex trading is not an easy kind of online business and not everyone is able to make stable money here.
To some extent, this is due to the fact that the simplest rules become complicated for most traders if they have to follow them strictly every day. Monotony is exhausting and not only in currency trading. But the stability of algorithm is the main secret of success of even the simplest beginner forex strategy.
Not only you should know the rules of your own trading system, but also follow them meticulously, limiting the flight of fancy only within the framework of these rules.
Entry points are especially important for any trader.
Let us try to look at certain phases of trader's work through the prism of psychological factors that affect performance of a market participant none the less than errors in analytical calculations.
Basic rules of successful trading
1. Before you enter into a trade, you should adequately assess your psychological and intellectual state. If you are nervous, irritable, depressed, too gambling, there is a reason not to enter the market.
To work, a trader needs, first of all, calmness and the ability to think soberly and wisely. Although, it is not so easy to overcome the excitement.
2. The next factor to take into consideration when making a deal is working hours of American, European, Asian markets and release of important economic news.
If the deal planned by the trader will be executed during the peak hours of any of these exchanges - it is a probabilistic deal. If not, then, accordingly, by entering the market, the player is taking a big risk.
Before you open an order you should check if strong news is expected in the near future. It is risky to work during this period, if the TS (trading system) of the trader is not specially built for trading during the news impulses.
3. You should enter the trade only on the basis and within the limits of your TS.
Even if colleagues and partners persistently tell you there is a strong signal, but this signal does not match your trading system, do not enter into a transaction, because in any case, the transaction should be accompanied and respond to what is happening. And how to do it, if trading rules are unknown? Such work is a breach of discipline, and breaches of discipline are not forgiven by the market, sooner or later.
The fact that if you are lucky once get a profit on someone else's views on Forex trading, the luck will accompany you in the future. All the more reason not to enter a trade based on "intuition". Even intuition should work within the framework of the trader's TS.
4. You should only enter a trade when the stop loss protecting the position is consistent with the trader's money management policy.
After all, a stop loss can also trigger, and here it is important that this planned loss does not cause irreparable consequences to the trader's deposit.
Needless to say, money management issues should be considered in each trading system and polished exclusively on demo accounts.
5. It is not enough to take care of minimizing losses. You must determine the moment of exiting the trade even before you enter it.
You cannot predict 100% which values the price will reach, but the levels of expected profit should tell you how far the deal can potentially go.
If the levels for protective orders are further away than the profit targets, then it's best not to enter the trade. If the target levels are further away and you have received a strong signal from your TS, then enter boldly.
Of course, the market may go against the trader, but constant obedience to the trading rules, laid down in the algorithm of trading strategy for earnings on Forex, will in any case work profitably.
You should not be afraid of taking a loss, it is more important for a trader to take these unavoidable losses, without which forex trading simply does not happen.

Scalping indicator - the panacea for the Forex market?

Many people who are new to the Forex market sooner or later start to learn scalping. Having learnt the basics of the market the newbies turn their attention to Forex indicators which in their opinion help them in trading and enable them to make profit.
However, in most cases it is not so and 90% of indicators available for free are absolutely useless.
Let's take for example lagging or overripping indicators which can lead to a rapid loss of money but are widely available on the Internet. The same thing is with scalping indicators. The very notion of an indicator for scalping is not really comparable to what happens in the market and has nothing to do with the formation of large market movements, which often only happen when big market players such as banks or hedge funds come into play.
A good indicator for scalping is a very expensive thing, especially if it is a really working indicator. It will not cost 15 or 20 dollars as many people think, but its real price starts from 1000 USD and above. Most likely, these indicators will be based on the market volatility and volumes, and they will be bound to certain less volatile pairs. Why namely to them? Because these indicators are usually designed for intra-band movements and only losses from the trend markets. As a rule, the indicator is used for scalping during the night time and Asian sessions, when the market volatility is very low and when it is possible to hit the opposite trend movement with minimal risk.
Another problem for trader, who uses indicator for scalping, is the constant work at the monitor. It is necessary to trace the market fluctuations on minimal timeframes and watch the changes of indicator and price and make decision about entrance and exit from the market. As scalping deals usually do not last more than 3-5 minutes, it causes a strong emotional and psychological tension in a trader and leads to invalid decisions and as a result to huge losses, especially if the entrance according to the indicator was wrong and the market went in the opposite direction.
Another problem of a trader who uses the indicator for scalping is absence of profit targets or fixing of losses. In other words, a trader waits for a return signal from the indicator to exit a trade, which usually appears when the market has taken 1/3 of the profit. And taking into account spread and commission, it turns out almost half of the profit is lost. Absence of Stop Loss may lead to the loss of part or all of the deposit, if the trader did not guess right with the entry or the signal turned out to be false.
Why do you lose the whole deposit? Because scalpers use large volumes, which usually exceed 15-20% of the deposit, which is a losing strategy. And if a trader gets into a large price movement of 50-100 points, there is practically no way to escape a losing deal.
All of this leads to the following conclusion: if you are going to use indicators for scalping, then use them in your trading strategy together with robots and trading experts, who will calculate at least a Stop loss and Take profit for you. This will allow you to initially stay in the market and optimise your EA and your trading strategy.

Individual trading psychology

Every trader has his own Forex strategy and his own vision of the market, but what unites successful traders is their common attitude to the process itself - to the psychology of trading.
Every experienced trader understands that the market is an element and no one ever managed to master this element. An experienced trader enters the market to take what the market can give him at the moment, not to conquer all inexplicable phenomena and tear apart such a tempting environment of large funds and capitals.
But sadly, almost all newcomers make the same mistake. They come on the market and try to crush and dominate this bulkhead, and as a result get a harsh rebuff in the form of lost deposits and frayed nerves.
Then, after the wounds from losing money have healed, the newcomers from Forex try to take revenge again, believing that this time they will definitely tear the market apart and get hit in the forehead again and fly away to even greater distance. This can go on for a very long time, some very stubborn traders spend several years on these visits, losing one deposit after another.
The market should be perceived as a cash cow, which can give you milk if it has it at the moment, and if it does not, you should not annoy this nice animal, because you can hoof it.
You enter the market only to take what the market can give you at that moment, and no more. If the trading strategy algorithm does not show a potential deal, then you should not waste your time and nerves at this moment. You need to wait and get the necessary signal outside the market and enter it on the merits, instead of wandering around opening orders by "gut feeling", dreaming about the gold mountains at the same time.
Take advantage of, but do not invent opportunities, and the positive deals in the tailwinds will not be long in coming. And before plunging into internet-trading with a serious amount of money you should hone your skills on a demo or cent account, so that making a profit becomes a habit, almost automatic, easy thing to do.

Forex intraday trading - for and against

Forex traders are often rigidly specialised in a certain urgency of trades. Few manage to trade in the perspective of both twenty minutes and ten days. But statistics show that most professionals opt for intraday Forex trading.
Day Trading or Intraday Forex Trading
What exactly is it? It is an intraday trading without carrying over trades to the next day. You may execute one or more deals, depending on the size of the position. It is worth to note, that traders, who work within day, are usually engaged ONLY in trading on Forex. It's not passive income, it's not a hobby or extra income. It's a job, and they devote all their time to this work.
Intraday trading on Forex requires diligence and thoughtfulness, a well designed system with competent placing of orders. It also requires sensible reaction to any fluctuations, caused by the fundamental factors. Moreover, intraday forex strategies are available both for professionals and beginners.
Types of intraday trading
Forex news trading is ideal for day trading. As soon as an important economic indicator is known, the market changes instantly, so short-term lovers of this type of trading can make excellent profits.
Scalping also refers to intraday trading. In fact, it is just a series of micro deals in the short term. Trade on pullbacks can also be attributed here.
Day Trading: for and against
Opponents of daytrading argue that trading in such a short term cannot bring serious profits. Only long term investments will eventually result in high returns. It is simply illogical to close a profitable position at the moment of forecasted global movement.
In many ways, they are right, indeed long-term trading is more profitable in the long run than intraday forex trading. But day trading is more suitable for those who do not have a huge deposit. And it can be problematic to go overnight without serious capital. And that brings us to the main advantages of intraday trading:
1. Predictability of risks. The trader will never lose more than he can afford to lose. The basic principle of money management will not be broken.
2. no swaps. So there is no need to rollover the open position to the next day. And it is a separate service, which is paid by brokerage firm at a separate rate. And if your position is not too large, the swap will simply eat up all expected profit. And that's assuming there is any profit at all.
3. no gaps. Forex intraday strategies are also safe in that they do not include price gaps. An overnight gap can overshoot your set stop loss, and bring you such serious losses that they will knock you out of the market in one trade. Therefore, with a small capital, day trading remains preferable.

Investing on Forex - current and profitable!

Investing in Forex financial instruments is one of the most profitable ways of investing your savings. With growing financial literacy of the population, this investment trend is becoming more and more popular
Several methods of investing in Forex:
1. Direct trust management. The investor opens a trading account with a certain amount of funds, chooses a manager and enters into an agreement with him. According to the contract, the manager carries out transactions on the investor's trading account by himself and receives remuneration for that in the amount of a fixed percentage of the investor's income. Everything is simple and clear, but there is a risk to run into a fraudster or an inexperienced trader, so before you start investing, you should collect necessary information on the Internet.
2. Investing in PAMM accounts. This method is a type of trust management and is becoming increasingly popular. In this case, the manager does not have access to the trading account of the investor, and makes all transactions on his own trading account. One trusted manager can have several PAMM-accounts under management.
All profits earned from the trades are distributed among the trustees as a percentage of their current balance. The level of profitability of such accounts depends on professional experience of the trader and his chosen trading strategy. Therefore, it is advisable to identify several managers and distribute your investment among them.
3. Social trading. It is a relatively new direction of investment that is in great demand among beginners. It implies automatic copying of trades in trading accounts of more experienced and successful traders. There are several specialized platforms, after registration on which you can choose a trader and subscribe to his trading signals. Subsequently, the system will copy trades of the selected trader. For that he will get a set percentage of the income.
4. Trading with the help of Forex advisors. Special trading robots (Expert Advisors) automate and optimize trading on the exchange. The key to successful trading in this case is using of highly profitable strategies, developed by the best traders of the world. It is recommended to withdraw the profit immediately, leaving only the initial amount of investment in the account.
5. Cryptocurrencies. Recently currency pairs were launched on Forex, where one of the currencies is a cryptocurrency - bitcoin, litecoin and others. Cryptocurrency trading follows the same order as forex trading: first you need to open a trading account, select cryptocurrencies and make trades.
When you start investing, you need to understand that temporary difficulties are inevitable, but at any moment you can make a very good profit. You need to have a clear investment plan, break down the total amount of money to be invested into several areas, adhering to the rule "don't keep all your eggs in one basket".

Investment strategies

One of the ways an investor can add value to their capital is by developing an investment strategy, which is a series of tools and techniques for managing an investment portfolio. Every investment company applies one or more investment strategies in practice. There are five main investment portfolio management strategies, and an investor may use one or several strategies altogether.
Dividends is the most popular investment strategy which involves buying stocks of various companies. Subsequently, these shares begin to generate income in the form of a percentage of the company's profits. To become one of the shareholders, you need to buy shares in a company before the register of shareholders is closed. The right choice of a company, which is becoming increasingly profitable, is capable of generating a steadily high income for the investor.
Long-term share ownership is a strategy for investors who wish to reduce their risks. While the purchase of shares may deprive an investor of income should the company fail, a long-term holding of at least one year is capable of yielding up to 50% per annum without much risk. The fact is that with such a strategy, the investor allocates shares to several sectors which are independent of each other.
Medium-term shareholding is an intermediate strategy. Under a medium-term shareholding strategy, an investor buys shares for up to a few months and earns money on them during this time. At the time of a price peak, the shares are sold and the investor buys a new block of shares at a low price. This strategy is suitable for investors who practice fundamental analysis to diagnose the current market situation.
Positional trend trading is a strategy for those who don't want to limit themselves by a deadline. According to this strategy, an investor holds the stock as long as the market situation is stable and sells it as soon as changes occur. The return on this strategy can be up to 400%.
Intraday trading is the most dynamic investment strategy. It involves earning income from fluctuations in the price of a stock within one session. During this time, an investor can make up to a few dozen purchases and sales. This methodology is highly profitable, but it is risky, which is why an investor using this strategy needs maximum concentration and the ability to react quickly to the slightest changes in the price chart.

Is Forex trading worthwhile?

In Forex trading, just like in any other market with high uncertainty of the future result, the most important factor of trader's success is his psychological behaviour.
It is a misconception to hope for automated trading systems, some kind of super Forex strategies. In fact, if trading is not accompanied by strict self-discipline and self-control of emotions, neither a scrupulous trading plan nor the results of fundamental and technical analysis will help a trader.
What happens to a beginner when he comes to a dealing centre offering to work on the international financial market? Forex trading for the beginners is first of all psychology. Experienced trainers from brokerage companies have long ago studied the behavior of people who succumbed to the influence of publicity and were flattered by the high profits in a short period of time.
When a person is driven by greed and desire for freebies, in fact at this point he is already caught in the net of managers. Then the treatment in the style of network companies follows, when you are told how much money you can get, how high profitability is possible, if you just start working with a little bit of your own capital. It means that the attention of newcomers is directed not on technologies and difficulties, but on perfect results in case of successful prediction of future exchange rates.
Each company is ready to provide a working place where the trader may get training on a demo account, i.e. work on a trading simulator free of charge without having to invest the trader's own capital. However, the results of fake trading (because you do not pay real money for it, but virtual) may give good results and a beginner may mistakenly believe that his real-time forex trading can be just as successful.
All these points are psychological traps, misconceptions and wrong conclusions. Therefore, psychology, as a human reaction to external environmental factors, is present here from the very beginning. A person who decided to embark on the difficult path of a Forex trader needs from the very beginning to have a critical eye on everything that is offered to him for free and for money.
The hard way of making money in the Forex market
Disregarding tempting promises you must learn to understand the market behavior which is shaped by the actions of politicians, big companies and central banks of the states. All of this is part of fundamental analysis, which allows you to predict the major trends (steady direction) of currencies in the foreseeable future.
When after the training in the dealing centre a new trader starts real trading he is highly motivated, usually positively charged for hard and cautious trading. He has got good skills of graphical analysis, defines Fibonacci levels, sets stop-losses and draws correct trend lines. Also a beginner regularly analyzes news feeds, waiting for important news that experts recommend to take into account for making correct decisions when trading on currency and securities markets. The question "should I start trading?" is not even in his mind. He is raring to go and ready to tirelessly put his profits in the pantry.
But what happens after one or three months of real trading when the deposit is running low, losses are piling up and the trader feels that Forex is a fraud? Someone begins to study additional literature, someone trawls the Internet, various forums, and sooner or later comes the understanding that not everything is as simple and easy as was promised by shillers of exchange trade. After all, all experience and knowledge of what has happened to currencies is based on the past, which has already happened and cannot affect the future in any way. But the future is uncertain and unpredictable.
It seems like a lot easier than that. Choose a result from just two options: buy or sell. There's a 50% chance of winning. Not bad, in principle. But this game is called a negative-sum game, because for every transaction, i.e. entering the game, you have to pay a commission to the broker who brings you into the market, you have to pay a swap fee for moving your position overnight. Even with equal probability, your account will gradually decrease. And here again let us remember about the psychology of Forex trading, the two eternal companions of a trader - Fear and Greed. As a rule, a trader who has tasted failure begins to fix his profit quickly, not allowing it to grow, but may sit in a losing position for a long time, hoping that the market will soon turn in his direction.
Why sober-minded people would never gamble in a casino for profit? Because they know they are playing against professionals who specialize in beating you. To do this, they use special techniques, methods and mechanisms. Why do we think it will be any different in a game as common as Forex? Here the same skillful managers develop strategies to attract clients, they take specialists (often from defeated gamblers) to train beginners, to teach them the basics of trading and market behavior. It is clear what such "gurus" can teach who want to recover their losses with the help of commissions for attracting newcomers.
The most important thing to understand when you decide to trade with your own money is that you will never know exactly how the currency is going to behave at any given moment, you are always at risk of making a mistake. You will always be under tremendous psychological pressure from the fear of losing, making a mistake, losing your money. No rational arguments can stop you when you fall under the power of your own emotions. In addition, you run the risk of falling under a psychological addiction called gambling addiction.
So is Forex trading worthwhile?
If you treat trading as a game in the hope of getting a million-dollar jackpot overnight, then no, you shouldn't. Miracles are only in fairy tales or in the stories of managers of brokerage companies about the mythical people who earned millions by studying with this particular coach and now are living happily ever after somewhere out there in a very far abroad.
Forex is work, and in order to achieve success here, you will need more than one year of hard work with very painful mistakes, which really hurt your pocket. So, in order not to feel agony for wasted money (and the money is usually not small), you should master your skills on a demo account, then switch to cent account, and only then, having made sure of the efficiency of your trading system, gradually move to real money trading, starting with small amounts. And good luck will come. After all, successful traders do exist, but there are much fewer of them than those who took everything from the market.

Is it bad to be a medium-term trader?

The main thing in Forex trading system, besides knowing how to enter the market correctly and how to exit it even more correctly, is risk evaluation and competent capital management. It is equally bad to overload an account with large number of deals and not to use the deposit to its full extent, overly reinsuring the size and number of open lots.
Still, a trader's trading system should include money management and regulate the amount of used margin as a percentage of the total deposit. Usually it is 2 - 5%.
Pluses and minuses of medium-term trading in Forex It is no coincidence that at the beginning of this article I paid attention to the issue of exiting a trade, considering this moment of trading as important as entering the market. Indeed, having closed a position earlier we are not only worried when calculating lost profit, but also we have to patiently wait for the next entry, which may come very, very soon.
Missed entries are followed by a stop loss. And it is good if that stop-loss is in a breakeven zone. I will never forget losing 500 points of profit on GBP/JPY, which has eventually resulted in a break-even level. Most often such mishaps occur when a trader misjudges the duration of a trade in light of the time periods. The position opened by the trader is short-term or, on the contrary, it is designed for a longer trading period.
Medium-term forex trading is safer, although it implies relatively long distances to initial protective orders.
In this case, the trader should not react violently to the slightest price changes and be prepared for the fact that in the first stage of trading his profits will be followed by losses and losses - because he will have to wait for the price pullbacks and corrections.
The desire to close the deal at this moment and get a legal penny or two is great. But, medium-term trends do not "break" quickly, but whether the market will give the opportunity to enter another transaction to replace prematurely closed - is questionable.
And so sad to see the trend gaining momentum, being out of the market, that even the penny ringing in your pocket is not happy. Again, medium-term forex strategies give more opportunity to close a trade at the end of the move.
The trend is like a car flywheel, which takes effort to unwind, but then, after the external forces are over, it keeps moving by inertia for some time. It is this inertia of the price movement that allows the trader to complete his trading without any hurry.
Besides, medium-term trading on Forex allows managing the deposit more effectively when trading with different instruments. Having closed a deal on some currency pair, after that the trader may open a new trading instrument, and then, if desired, a third one.
Of course, it requires certain skills, but the medium-term caliber frees the player from making hasty decisions, and makes it possible to conduct an unhurried and in-depth analysis of the trading situation, select several promising instruments, of which he can then settle on one or two.
With my article I'm not calling followers of day trading to abandon their beliefs and switch to trading on daily charts, I just want to tell you about some advantages of medium-term trading, which sooner or later comes to most of the players who have managed to survive in the market.
So maybe this transition should be made a little earlier?

Is it possible to earn on the stock exchange $100 every day?

You can't become a millionaire in the blink of an eye, so you have to set more realistic goals. Many traders would be happy making $100 every day. Is it possible to achieve such a result? Traders who practice scalping do achieve such results.
But you have to take into account that you have to stand on the stock exchange field live. You will not have to pay for every entry into the market; you will only have to pay for a trading spot on the exchange. Dealing desks always have a commission fee. If you pay for each entry into the market a price equal to one or two ticks, then there is no point in guessing the next tick. Are you hoping to guess several ticks at a time? That's not a successful practice. Even the millionaires at the stock exchange decide one question: what is the next tick? And they bet hundreds to millions of dollars on it.
The vast majority of traders position themselves as traders who hold open positions for days or even months at a time. This tactic is the most effective. But can it guarantee $100 per day? No! Why?
Let's look at the trader's work using a concrete example. Gold fell to 1180 dollars per Troy ounce and the trader bought it. But the chart went down further. One day, the second day, gold falls in the price. What should you do in such a case? Take a loss? No, if you think that gold is cheap, you do not need to close the position. But 100 dollars a day is out of the question, if you stand on the rise in price, but it falls. The time will come and gold will go up to $1,100, and then it will become even more expensive. But no one knows when it will be.
On Forex currency market the situation is similar. Euro-dollar pair is trading at $1.10 per Euro. What to expect in the future? It is possible that the chart will go down to $1.05 per Euro. But before a move lower, the chart could "bounce". And this jump may last for more than one day. Consequently, there will be no earnings during this time.
In the oil market the price fell to $40 per barrel. Despite all the scaremongering, the trader can buy oil. But the chart will dive even lower to $39. Then to $38. Outlasting the fall is simply a necessity. One should not think that oil will be free or almost free. Such tales abound on the internet. But we should not expect cheap hydrocarbons. Therefore, a position in oil should not be closed. Earnings will have to wait, perhaps for a few weeks or even months, but it's better than taking a loss all the time.
The best way to earn $100 a day on Forex is to study analytical video reviews from professional traders.

Is it possible to trade forex profitably without risk?

Depositing money in bank deposits implies a minimal risk of losing them. However, the interest rates on deposits offered by banks do not even allow to cover losses from inflation. This circumstance forces people who have spare cash to look for other ways of investing it.
Trading currency on the Forex market can be one of these options. Speculative currency trading can yield good income but risks of financial losses are increasing as well.
Novice traders usually start their trading career by searching for a winning forex strategy. Experienced traders have long been convinced of the fact that currency speculation in the market is not possible without losses. But they know that using money management is a way to minimize financial risks.
This article is about methods of reducing risks of losing deposits.
Reducing risks - saving deposit
The first thing is to thoroughly prepare each deal. In this process, the trader should use all available tools - price charts, technical and fundamental analysis, and reliable indicators signals.
During trading, it is necessary to use the principle of diversifying the deposit. According to this principle, a trader should trade on several currency pairs and use various trading strategies.
Forex hedging will also help to reduce trading risks on the currency market. It consists of opening trading positions in forward and backward direction. It is used in case of market instability and expectations of sharp price changes of the traded currency pair. A hedging strategy can be called a win-win strategy, but it will not bring you much profit. Here you should be able to close loss-making positions opportunely to allow the growth of profitable positions.
The next method of saving capital is conservative trading strategies ensuring high preservation of the trader's equity. However, in this case one should not expect excessive profit.
The trading terminal allows a trader to plan and limit the possible losses in advance. Stop-loss limiting the drawdown is intended for this purpose. If the asset price reverses and moves in an undesirable direction, when it reaches the stop-loss level the trade will be automatically closed.

Is it profitable for brokers to actually train their traders?

Nowadays there are many brokerage firms which train new traders, often for free. They offer really valuable knowledge, in fact they bring a trader to the Forex market without any investments. The question is why do the brokerage firms do it, what profit they receive? If it suddenly turns out that a brokerage firm receives nothing from the training, then why does it need anything at all, because nothing is just done on the Internet? Let's shed some light on the dark side of brokerage firms and get to the bottom of this issue.
How do online brokerages work?
To get to the bottom of the problem, we need to define the essence of a brokerage firm as such. A broker is a kind of intermediary between a trader and some person at the exchange. The trader needs to buy a certain asset, e.g. a security or currency at a necessary rate and in a limited volume, there can be a person at the exchange who wants to sell. The only thing left to do is to negotiate and conclude the transaction, with the stockbroker being the intermediary. The entire process described above is almost entirely automatic, but the broker's function does not change.
How does a brokerage firm earn money? It receives a certain percentage of transactions made by the traders, regardless of whether these transactions prove to be profitable or not. It turns out that the more trades opened by clients, the richer the broker will be, but to reach it the newcomers in the exchange trading world have to be explained the basics of successful trading. Along with the commission charges many brokerage firms put additional conditions to traders, for example, if after the training the start-up capital is provided for trading, the trader will have to give a part of his earnings, often up to fifty per cent, to the broker. Free training and start-up capital allow anyone to discover forex without any investments, which ideally solves the problem of unemployment in general. It is a different matter, that not all people have a predisposition to such earnings, which require patience and above average intelligence.
Is it profitable for brokers to really train their traders?
So what does the brokerage firm get after training the novice traders? Firstly, the capital that these traders will invest. The capital can be invested initially just for training if it is paid or directly to the trading account. Secondly, the traders will start to make trades on which the broker will receive a commission. If these transactions are losing the broker will not lose anything, if they are profitable the part of profit will go to the broker's pocket.
The considered variants of receiving profit are not the only ones, there are many others. A trader, who is trained to earn on Forex, can invite other people, the same as he is, i.e. start to build an affiliate network. Almost every brokerage firm has affiliate programs, which will give the trader an opportunity to earn extra money. The network is profitable for the brokers for the reasons we described earlier: the more people, the higher the potential income.
Training traders and establishing a well-developed brokerage firm is also beneficial for the future sale of the business. Such transactions are quite rare because traders prefer to receive passive rather than lump-sum income from their activities, but they can still take place. Selling a brokerage server with an existing network of real traders is a sure way to make a lot of money in one go to get away from the business and gain full financial independence.
Analyzing all the above, you can conclude that the training of new traders for a stockbroker is quite a profitable occupation which opens up many prospects at once. Brokerage firms today are not few in number, in order to outrun their competitors they have to lure clients to their side all the time, and to do this they have to attract them with new profitable opportunities. The broker activity itself can be considered quite profitable, because the risks are minimal, the broker does not risk his own money. However, it should be remembered that setting up such a business is a complex process that requires knowledge of all trading principles and competitors should also not be forgotten.

Key aspects of hedging

Today, the concept of hedging is inextricably linked to dealing. The term itself comes from the English word hedge, which means "to limit".
The technique is intended to reduce losses by balancing the aggregate position, but in practice things are not quite simple. Any hedging is impossible without a systematic approach and strict discipline.
By hedging, we mean covering exchange risks by means of foreign trade or any other credit operations, aimed at changing the price of an asset.
Moreover, these transactions are not speculative. They are focused solely on building up an insurance reserve to compensate for unforeseen financial losses due to the influence of unfavorable factors on the quotes in question.
In a general sense, there is a reduction of loss from an exchange-traded (sometimes over-the-counter) instrument as a result of investing in another asset.
Reducing risk through hedging
The use of hedging is always problematic. A trader is compelled to open a position which in the expected circumstances he would never have opened. Therefore it is always a good idea to analyze the open positions and the current market situation before you introduce a hedge, and only then resort to the most effective forex hedging strategy.
Otherwise, hedging will generate a lot of additional problems.
Forex hedging peculiarities
One has to be particularly careful at the insurance stage directly in the FOREX market.
The fact is that all leading currencies are quite correlated or interrelated. The structure of the modern currency system is represented in such a way, that in the interbank market all trading is done against USD. The USD is a universal instrument, a safe haven currency and an investment during complicated political and financial crises around the world.
Even in the midst of the American crisis the strength of the US dollar as the world's leading currency is still intact.
Once you have decided about opening a hedge operation, you should start choosing an instrument.
Here it is appropriate to remember that the purpose of hedging is to minimise risk, and the purpose of arbitrage is to make a profit.
Consequently, at the same time the hedger is trying to reduce his losses, and the speculator knowingly exposes himself to danger, exacerbates the situation and escalates the profit factor. This is why one can sometimes observe sharp spikes in the currency charts during the release of important economic news.
Nevertheless all hedging instruments are divided into the on-exchange and over-the-counter assets according to the way they are traded.
OTC assets include commodity swaps and forward contracts. Such transactions are carried out directly between participants or with the help of a swap dealer.
Exchange-traded hedging instruments include commodity futures and related options. In this version, trading takes place on the exchange floors themselves, and the exchange clearing house is one of the parties to the transaction. It also acts as the guarantor of all obligations, both of buyers and sellers.
An important prerequisite for the existence of a sales institution is the standardisation of exchange-traded commodities. These include crude oil and basic oil products, natural gas, base and precious metals, and all kinds of foodstuffs.
Initially, the hedging mechanism originated from the reciprocal movement of the price of a commodity in the spot market and a similar futures contract, which made it possible for futures contracts to compensate for losses incurred by trading the real products.
Over time, the term acquired a broader meaning, and hedging transactions could be successfully combined with other risky operations, particularly in the FOREX market.
And yet, the main purpose of hedging is not to make a profit, but to mitigate the risk of unforeseen losses. You always have to pay for reliable insurance.
In addition to the psychological costs, hedging requires the presence of margin, commissions, the costs of bid-ask spreads and Swap charges, as well as the presence of variation margin.
Thus, before hedging, it is necessary to estimate the level of possible losses of all open positions and the cost of potential insurance. Only if there is a clear benefit from the hedging strategy does it become a condition for its positive use.

Leverage in forex trading: obvious advantages and hidden disadvantages

One of the major advantages of online trading is that Forex currency trading enables traders to start earning without investing large financial sums in the business.
Unlike the real trade, where a new businessman will need to buy or rent the appropriate area, to purchase goods, to bear the burden of overhead costs, in Forex trading the expenses are incomparably lower, because the transaction is carried out on the principle of margin trading, a constituent part of which is the presence of the leverage.
Leverage allows traders to enter into transactions for amounts many times greater than their own funds. Besides, the leverage allows Forex beginners to try themselves in real trading on the currency exchange market with a minimum amount of risky investments.
What is leverage?
- Leverage is a ratio of the amount of a contract traded by a trader to his own investments. It can be 1:1 (where a trader abandons the use of borrowed funds), 1:100, 200 or even 1:500 or 1:1000.
The most common variations of leverage in forex trading are: 1:50; 1:100; 1:200.
Forex beginners who opened a $1000 trading deposit without using leverage (1:1) should not expect to make much profit from online trading. The standard leverage of 1:100 allows the trader, in case of investing his own thousand, to operate the amount of $100,000 in Forex trading.
If everything is clear with the profit for the trader, then why does the broker have to help the average trader to earn money? The financial advantage of dealing is in providing a long term credit, which is a good promotional "gimmick" and helps to attract more clients to the service.
Recently, we often see advertisements where traders are provided 1:300 or 1:500 leverage and told what great profits can be achieved by using the leverage of the dealing centre with minimal investment of own funds. Only about the amount of losses, which increase in the same proportion as the profit, these advertising companies usually do not say, preferring not to spoil the working mood of Forex for novice traders with modest silence. Although, in case of trader's failure the broker, unlike the trader, does not lose his money. The deal is closed at the moment when the amount of loss is equal to the amount of the client's deposit. That is, the broker providing a sort of credit loan to the client does not risk anything under the pretext of promising earnings, monitoring financial situation with the deposit of the client. But the client, in the pursuit of profit with the use of leverage, risks only his own funds and the higher the risk is, the bigger the leverage is.
Advantages and disadvantages of leverage
Beginner traders should remember that Forex trading with leverage has both advantages and disadvantages.
As noted above, the first advantage of working with leverage is the ability to operate with large sums of money. A dealing centre gives a trader its own money as a loan or a trust. Having a small amount at his disposal, the player expects to get a good profit from trading on Forex, using the leveraged capital. This prospect of profit is what attracts most traders.
Another advantage of trading with leverage is the fact that traders cannot lose more than the amount they have invested. For example, a trader using 1:100 leverage and investing $1,000 will incur losses of this $1,000 if he loses, but not more.
But disadvantages of using leverage, which come from its advantages, are not widely publicized, though beginning traders must find out about this aspect of the matter before they start trading. Trading on Forex market and using large leverage in case of insignificant market movements against a trader's position, the trader may find himself in a situation of margin call and lose most of his deposit. The use of leverage in Forex trading is akin to drinking alcoholic beverages. A small dose is good for the body, a large dose is a deadly poison.
Basic rules of trader's trading system
To avoid stressful situations as much as possible, it is necessary to include several important rules into working Forex strategies, and strictly follow them:
1. Do not use all of your funds in operations, but only a part of them. Be aware of how to effectively manage your capital (money management).
2. Do not forget to place protective orders (Stop Loss).
3. Do not run after an unbelievable chance of instant wealth by choosing the best Forex trade leverage (usually not more than 1:100). It is better to trade smaller amounts than to watch others trade.
Leverage is a complex but nevertheless very convenient tool for trading in the financial markets. It can help a trader to get rich as well as quickly ruin an unlucky player. That's why its application requires from a trader concentration and accuracy, necessary knowledge and skills that fit in the notion of trading system.

Forex trader's losses. Crash or inevitability?

A professional trader differs from an amateur in many ways, including the perception of trading losses. The axiom is simple: forex trading does not happen without losses, in fact - it cannot be.
You should not blindly believe the stories of the "gurus" about their brilliant strategies and break-even trading systems.
Remember the efficiency factor of machines and mechanisms. No machine has a 100% efficiency, although scientists around the world are trying to improve the efficiency of various mechanisms.
Can a trader incur financial losses?
As for Forex trading, the ratio of 7 profitable trades to 3 losing trades (70% efficiency factor) is a very good indicator. However, it sometimes happens, especially among beginners, that a negative result of three trades outweighs profit of seven positive entries, but it indicates absence or ineffectiveness of the trading system. If you are confident in your skills and know how the system works on a demo account, you must put up with the surge of negative emotions that can accompany losses.
Forex market is unpredictable and chaotic. No one can ever accurately predict the behavior of a currency pair. It would seem that everything points to the fact that it is necessary to open a buy order. It is opened. Immediately the market turns and a stop loss is triggered. Here is an unexpected loss! It turned out that there was some unexpected news, or someone said something, or even someone attacked someone. The market reacted and the protective order triggered. After all, a stop loss did not allow the losses to grow, and as a result, it has protected a large part of your account from possible further losses. So it wasn't all bad. The sudden rain that catches us on our way home is not the fact that a worldwide flood has started.
Neither is trading in the foreign exchange market. Making a loss does not mean you are a mediocre trader and your strategy is good for nothing. Moreover, making a loss even for an experienced trader does not mean anything. Every profession has its costs. You can't accuse a driver of unprofessionalism when he accidentally punctures a tyre. He will change the wheel and go on his way. A trader, on the other hand, often makes the major, if not fatal mistake of identifying himself with a loser. As a result, the sense of fear prevents making other trades, the sense of psychological discomfort drives the trader into a hopeless deadlock or, conversely, a desire to quickly win back the loss. All this leads to a depressed state and loss of sense of reality. And that is all. No deposit, no trader. And everything was so good at the beginning...
There is no Forex trading without losses!
What is the conclusion from all of the above? It is simple. Forex trading is not only, and not so much the mechanical opening and closing positions. The psychological state of a trader affects the quality of trading more than anything else. You should not give in to despondency of unavoidable mistakes and allow your emotions to overpower your mind. Remember that only strong self-control will help you achieve success in this difficult but interesting field of business.

The main points of the fundamental analysis of the currency market

Fundamental analysis on the Forex market means studying and taking into account the factors influencing the rate of one or another currency asset. Since a pair includes two currencies, each of them should be analyzed separately.
The general list of factors influencing exchange rates can be divided into the following groups: economic, political and force majeure.
It is worth mentioning that the broad group of economic news includes not only the publication of reports or indicators but also news about the future monetary policy of central banks, speeches of representatives of monetary authorities, ratings and forecasts of economic development.
Economic news is prioritised according to the importance of its impact on asset performance. Major news items include:
- Central Bank interest rate decisions; - GDP trends; - labour market reports - inflation data; - business activity indices.
Political events of fundamental analysis include change of government (government or head of state) by democratic means or military coup, military conflicts, terrorist acts.
Force majeure or circumstances that cannot be predicted in advance. These are natural and manmade disasters that will require a major financial injection to overcome.
Fundamental analysis is not as simple as it may seem, as an ordinary trader is unable to fully evaluate the full range of information affecting forex pairs trading. In addition, the release of two or more equivalent events, conflicting with each other, creates some difficulties. You should also take into account that not always the news, even a very important one, can break or influence the prevailing trend movement.
Traders should realize that they should use both fundamental and technical analysis to minimize mistakes and the effectiveness of their trading strategy. For example, it is better to enter the market after news releases relying on readings of Forex technical analysis indicators. At the same time, the position, opened by technical signals, during a fundamental news release is required to protect the stop-loss.
Fundamental analysis of the Forex market not only helps traders, but also broadens their outlook and gives them understanding of the vast mechanism of the world economy, so it is unwise to rely only on technical analysis or candlestick analysis in trading. But it is unlikely that good knowledge of fundamental factors without the ability to assess the charts of currency pairs movement from the technical side will help traders to gain profit.
Forex trading is a strict algorithm of rules developed by the trader and transformed into a system of actions or a trading system.

Medium-term Forex trading

The standard definition of medium-term trading in Forex is limited to the period of holding a position from entry to exit within one to five days. Five days is a trading week, hence this trading is also referred to as intra-weekly trading.
The average time in stocks is from a few weeks to a few months. But since most forex traders focus on trades lasting only a few hours, the average term for Forex is defined in a different context.
Medium-Term Trading Techniques
Like with short-term trading, but on a different scale, medium-term trading involves a certain amount of risk and level of profitability. Whereas in intraday trading the profit and loss are set at 10 to 50 pips, medium term trading involves at least 100 pips of profit and 50 pips of stop.
Intraday trading is considered to be the most profitable in forex, hence it is the most popular. However, the risks of medium-term trading are much lower with comparable profitability. For the medium-term, the analysis for entering the market is carried out at least on hourly charts. Indicator indicators and trading system signals are much more reliable on higher timeframes.
Support and resistance levels formed during the past week or month are much stronger than intraday levels.
The main difference is that you should use fundamental analysis and consider macroeconomic indicators.
There are many strategies, but the most efficient ones are trend-following forex strategies.
Peculiarities of medium term trading
It takes some time for the people to comprehend the convenience and benefits of medium-term trading. Trading Forex for beginners is, as a rule, intraday trading or even scalping. Only after gaining experience yesterday's newbies choose a calmer and more secure trading option. The organization of work assumes absence of haste in technical analysis and position opening. This style enables you to better plan your trading tactics, which will positively influence your trading results.
The trading capital for a medium-term trader should be higher than for an intraday trader, because significant drawdowns are possible. These are, of course, very subjective notions. More important is the percentage ratio of possible risk to the balance.
Psychological load during the medium-term trading is much less, while observance of discipline and trading rules is easier because traders do not have to check quotations every minute, fishing out every pip.
Another useful feature of medium-term trading in Forex is that the trader's long term mindset allows for multiple entries and exits on the same movement.
Advantages and disadvantages of medium-term trading in Forex
The most important advantage of medium-term trading over intraday is that it requires much less time to analyze and monitor positions, which is especially important for those who combine Forex with other activities.
Technical analysis becomes easier and more reliable, and entries are more accurate. It's easier to trade multiple pairs, which is difficult to keep track of in the short term. Each successful trade brings a significant profit.
But this style also has disadvantages. In cases when market is moving in a narrow range for several days or even weeks, mid-term trading will not bring profit. And according to statistics prices move in the trend only 30% of the time. So one has to be patient or monitor more currency pairs.
You should also pay attention to swaps, which can reduce your profit within a few days, if their values are negative.
However, most experienced traders prefer mid-term forex strategies, as the ratio of profitability to time spent is the best here.

Methods of teaching Forex trading

When starting to trade on the currency market, a trader should clearly understand that it is not possible to start earning money immediately - it is not enough to deposit some funds to the account, download profitable Forex strategies, choose a broker and start trading immediately. If it were that easy, 95% of new Forex traders would not have left the market. Lack of knowledge and experience leads to losing your deposit in the very first deals, so you have to pay great attention to education, learn what long and short Forex positions mean, and what some other terms mean.
Studying the wisdom of the foreign exchange market may be very different in terms of methods:
Study the literature, forums and thematic websites by oneself. Self-study on online courses, webinars Real-life classroom training Watching video-lessons from experienced masters Trading on a demo account and trying to learn everything in practice
Regardless of the method you choose, it is important to remember that both theory and practice are important. First, you need to deepen your knowledge of the economy and the market behavior, learn the vocabulary and the main components of Forex, and then continue with related topics, such as various types of analysis, trading terminal functions, interesting strategies, indicators, etc.
When choosing a course or webinar, you should not be guided by its price. Not always paid courses guarantee a great result, and not everything that is free is of bad quality. You should focus on the completeness of the information provided, its consistency and coverage of all major topics.
The way in which the information is presented is also important. Those who are able to absorb printed information better go for self-study of books and materials, but more often beginners choose video-lessons as the most simple, accessible, demonstrative and clear way to present new information. You can study Forex vocabulary while reading, but the peculiarities of technical analysis and complicated indicators are better understood on video.
After you have studied the theory you must devote time to mastering practical skills. No matter how much information you have to study, a trader cannot start to earn without real trading because there are different situations on the market, and practical experience allows you to go through them, learn to cope with emotions, to understand things you did not understand very well when mastering the theory.
Having carefully studied all the aspects and components of trading, one should not forget about training and demo accounts in the process of real trading. The market is constantly changing, there are new forex strategies, interesting methods, ways of making money. All this requires attention and testing, which is what demo accounts are good for. And a trader can only count on success if he or she is constantly learning, improving, and growing.

Mini Forex

Mini Forex does not fit the concept of beginner traders, because they want "a lot at once", not "a long time and a little at a time", so the attitude to this type of currency trading at Forex is condescending and scornful for most.
Why does a trader need mini Forex?
Really, why bother with ten or twenty dollars if you can immediately invest one thousand - another one, quickly earn and radically change your life according to standard set of benefits from advertising of almost every brokerage company? The imagination helpfully throws up images of a new car, green palm trees against the azure sea ... However, life rather quickly dispels these illusions, but there is no turning back the money.
It is not a secret that in order to work successfully in Forex, a trader's arsenal of trading systems, even a super profitable one, is not enough. It is much more important for a trader to learn to control his or her emotions, or, rather, to exclude them completely during online trading. And, as it turns out, this "trifle" in the end is the most important thing in trading. On a demo account everything is fine and the results are great, but on a real account - tremors in fingers, hectic thoughts and one loss after another. Everything seemed to start so good. But maybe at this point in time not to try to catch the bogeyman in the sky, and still turn their eyes on the previously unjustly ignored mini forex? Let us give a thoughtful look at the advantages of this type of trading.
Mini Forex advantages
First and foremost, it is of course psychological stabilization at the moment when a beginner is switching from abstract experimental operations on a demo account to real trading that sometimes yields quite good profitability. Here a significant positive moment is just activities with real money, even with small ones, which in case of success can become a basis for work with big funds, and in case of failure the loss of such a deposit will not result in serious moral and financial consequences for a trader.
Secondly, mini Forex is an excellent platform for continuing education in the field of online trading, upgrading and testing your own trading system. Many experienced traders have such accounts to test their skills, as they do not trust the quotes provided by brokers' demo servers. And in case of failures on their accounts with many thousands of dollars they prefer to take time-out and make "debriefing" with possible changes in trading algorithm on mini forex accounts.
Mini Forex also makes a trader to take a new look at organizational aspects of his work. It is a wide range of questions usually left for "later". These are the issues of computer protection against virus attacks, and arrangement of a redundant Internet connection, and many other important, but not relevant to demo trading issues. In addition, the presence of even a small but real amount on the deposit is more effective in disciplining the player, than hundreds of thousands of virtual dollars on a dozen of demo accounts.
Switching from demo to real account using mini forex
To summarize, we can say that forex mini is not only an excellent starting point for beginners, but also a "safe harbor", where one can sit out in the periods of trading turmoil, rethinking and re-evaluating your trading vision, and maybe even improving your financial situation. Just 15 years ago it was impossible to become a currency market player without putting $ 10 ths on the deposit in the dealing centre. Now, when Forex beginners are offered to try their forces in real trading on Forex almost from scratch, it is, at least, unwise to neglect it and not take advantage of mini Forex accounts.

Money Management on Forex

What is the secret of a successful forex trader? Most likely, a successful trader is someone who considers trading to be a serious job rather than a hobby or a way to get rich quick. There are 3 major segments in this business: trading strategy, psychology and money management.
In this article we would like to focus on money management in Forex trading and discuss some practical recommendations based on the experience of Forex traders.
Money management is a crucial part of Forex trading
Before we continue it should be noted that money management is an important, if not the most important, part of forex trading. But which is more important - forex strategy or money management? Forex beginners seem to think "strategy" and this explains why they spend most of their time searching for the best entry and exit algorithms. However, the answer for professional traders is the opposite: the most important thing in forex trading is money management, as they have already accepted the fact that no strategy will guarantee a consistent and stable income. So before you start trading it makes sense to spend some time developing rules to help you preserve your trading capital.
What does it mean to manage capital in Forex?
So what is money management in forex? It is the science of how we manage our own money, where the golden rule of investing is that not only are we free to invest our own (solely our own) money, but we should also allow ourselves to lose it.
Beginner traders tend to ask, how much money should they put into their trading account as initial capital? There is no common answer - the amount of seed money will be different for everyone. Why? Because no matter how the trader trades he must be prepared for the worst-case scenario, i.e. even if he loses the whole amount, his current lifestyle will not be drastically changed.
Even though a trader can start trading as soon as he has deposited funds into his account, this does not mean that he should immediately start placing positions, even if he thinks that he has the most brilliant forex strategy in his hands.
How to calculate the lot size of a trade?
Let's use the work of a hypothetical trader - N - for an example. Suppose he has $10,000 on deposit. His first task is to determine the lot size or develop a postulate: how much money he can dispose of when making a deal. This is very important for any trader. Another important rule is that we must risk only a certain percentage of our deposit in each transaction. And, as experience of professional traders shows, it is better if this amount will not exceed 2-3 percent.
Suppose N has also decided to limit the transaction risk to 3 per cent of the deposit. The maximum loss that he can take from one unsuccessful deal will be 300 dollars, which on the background of the total deposit of 10,000 will not be a tragedy with the cries of "I'm broke!
The next task is to determine how much lot volume N can trade. Here he should analyze the chart to determine the entry point into the market, as well as the levels of protective orders and expected take profit. And the most important point is the distance between the entry price and the stop loss.
Let's say N defines the distance between the entry price and stop loss as 50 points. In this case he, using a simple formula:
(10000х3) : 100 = 300
(300:50) x 0.1 = 0.6, where
10000 - total amount of the deposit; 3- the chosen percentage of funds involved in the trade; 50 - distance between entry point and protective order placement level
determines that in this case, it can trade 6 minilots (0.6 standard lots). If the trade goes against the trader, N knows that his maximum drawdown is still the same $300, and he still has $9,700 left in his trading account.
Often Forex beginners find such methodology of calculations difficult because they think the process of making "real" money on the currency market will be very slow. Although, just like any other business in the real world, Forex is not a place where you can get rich in a short time. The important aspect here is that amateurs tend to calculate potential profits while professional traders focus on risk and will first determine how much they will lose if the market goes against them.
To conclude, it is worth noting that you should not open more than one trade at a time, on affiliated trading instruments or on the same currency pair, unless it is a question of building up a position after the first order has been moved to the no-loss zone.
Let's say we are considering two currency pairs that are close in dynamics, such as EURUSD and GBPUSD, where the common part is the US dollar. Many traders will trade following their strategy. But in this case they will risk 6% of their trading account. If the dollar goes "wrong", both trades will be unprofitable, traders will lose that 6%. Do you see what the problem is? What can you do about it? Choose only one of these pairs, so as not to risk more than a certain amount of capital.
Although, of course, with experience in Forex trading, the total amount of the deposited funds involved in all trading instruments can be brought up to 10%, but no more. Remember, the main objective of a trader is to preserve one's trading capital.

Night trading on Forex

Usually many traders are active in the currency market during the daytime, during European and American trading sessions. The market at this time is active and there is an opportunity to make good profit on the price fluctuations.
But at the same time there are traders who believe that night trading on Forex can be no less profitable than day trading.
Let us try to find out if this is true in reality.
Time of night trading
Let's first define what kind of trading can be considered night trading. It is generally considered that night trading starts at closing of the American trading session, and ends at opening of the European session. That is, the period from 22-00 GMT+1 (the closing of the New York Stock Exchange) to 8-00 GMT+1 the next day (the opening of the Stock Exchange in London) can be considered a time of overnight trade.
Peculiarities of the night trading on Forex market
The reality is that when American and European exchanges close, market activity decreases rapidly. And there is nothing strange about it. When the hectic financial activity in US exchanges comes to a close, it is late evening in Europe and all financial institutions are closed. The Asian and Pacific commodity exchanges do not have the potential to have a significant impact on the behaviour of the underlying currencies. Usually, currency trading on these exchanges is centred around the yen, the Australian dollar and the New Zealand dollar.
- Most currency pairs become "sluggish" overnight. The corridor in which their quotes vary is usually less than 20-40 pips.
- Given the weak volatility, currency pairs are usually unable to cross key support/resistance levels. The price moves between these levels, alternately pushing away from them.
- At around 3-00 - 4-00 GMT+1, the market may see a surge in quotations for pairs that include the Japanese Yen. This is due to the fact that at this time large financial companies and banks of Japan enter the market.
- The news flow at night time is getting weaker and its influence on price movements of major currencies is insignificant. Only the Japanese, Australian and New Zealand currencies are not affected by this rule. Usually all the major news about these assets is released at night. And if news about the interest rate is released, we can expect to see a rapid price jump in pairs, which include the currency touched by the news.
What is the best strategy for overnight trading?
When choosing a trading strategy for the night time trading, we should consider the specifics of the market behavior. In particular, scalping may give good results.
You may also consider a narrow range of price movements so we can easily identify thresholds between which price quotes change and use a channel (range) forex strategy. Once you have determined the location of the levels, you can buy the asset when the price reaches the lower boundary, close the trade and sell the asset when the price reaches the upper boundary of the range. Low market volatility will allow you to trade this strategy without much risk, and low probability of breaking through support/resistance levels will allow you to make a profit in most open trades.
Advantages of night trading on Forex
- The main advantage of this type of trading is minimal risk. Thanks to the measured behavior of the market the risk component is virtually reduced to zero.
- Technical analysis during the night time is much easier than during the day. False signals and breakouts are extremely rare during such trading.
- Night trading is suitable for those who by virtue of various circumstances can not trade during the daytime.
- Psychological load on the trader in the period of quiet trading is much less, and consequently the effectiveness of his trading activity will be higher.
- At night a broker's server experiences less load than during the day. To some extent, it minimizes the risk of slippage which ultimately affects the quality of trading.
Disadvantages of night trading
There are not so many disadvantages of night trading, but still they need to be mentioned.
- The lack of proper sleep is the main disadvantage of night trading.
- Accumulated fatigue can lead to inattentiveness which prevents you from getting the best result in trading.
To sum it up, it should be noted that despite low market volatility during the night time, it is possible to trade profitably during this time. If you do it professionally, you can get as good results as during daytime trading. The only thing is that you have to correctly calculate your forces and not to make a lot of mistakes because of fatigue when starting this type of trading.

No need to rush... Or about the reasons for the first financial losses on Forex

It is recommended to start Forex trading with demo accounts for beginners. And the work with virtual money should confirm that the trader has a workable strategy, which brings profit for quite a long time, usually 3-6 months.
But in practice beginning traders, after having worked on Forex market for about two-three weeks with demo accounts and having mastered a bit, hurry to start real trading as adults in order to start earning what is called Big Money at last.
They do not hear warnings of experienced traders that one must practice with demo accounts for at least four or five months. And not only practice, but also reach real, and most importantly - steady results in this virtual Forex trading. And they not only do not hear but also think that more experienced traders just do not let them take a big bite from this delicious pie.
But, statistics just confirm the sad trend that the vast majority of newcomers (about 95 per cent), "lose" their initial investment in the first trading session at Forex market.
And no matter how many experienced traders told about it, and one can find a lot of similar pieces of advice on the Internet, nothing can help. To all appearances, beginners tend to hope for notorious Russian "ovos". Or they believe that they should be the ones lucky on Forex market.
Reasons of frequent losses on Forex
Most traders are eager to catch their luck. After all, here they are, the big money! This is their ultimate victory!
Non-professional players believe that their money will instantly grow. And immediately and many times over. In reality, unrestrained pursuit of super profits on the financial market often turns out to be a loss. And instead of expected thousands of dollars in winnings, unprepared players see zero in their current accounts. They suddenly lose everything. How? How could this happen to them?
And yet they were shown, told, given examples, finally warned. But it is unlikely that new Internet trading adepts have realized that they are not the only ones who dream to get rich by Forex trading. That thousands and thousands of traders from all over the world want to win. And a lot of dealing centres and brokerage companies also see their profit in the money of traders coming to exchange trading. If everyone is a winner, who is a loser?
Is a broker always to blame for trader's losses?
Of course, someone from this army of traders, and in brokers' dreams everyone is better, must surely lose. After all, it was not invented by us that if in one place there is a gain, it is at the expense of the other place, where just the same thing is losing. That is why in Forex most of newbies bring their money for someone somewhere just to put it in their pocket.
Only those who have had an excellent theoretical training, a vast amount of knowledge and accumulated experience can successfully work and make profit here. Those who have patiently avoided boring trading on demo accounts and learned to make stable, albeit virtual, profits for at least three months in a row. Those who are constantly self-improving, learning countless facts and nuances inherent to this type of activity.
Many experienced traders say about the necessity for the beginners to be ready to part with a rather large sum of money. And the best thing is not to be stingy in the beginning of your way and find good training courses from the acknowledged masters of the Internet trading. That will pay off in the end.
But unfortunately most of them rely solely on their own efforts, squandering more and more deposits in trading, giving away much more money and nerve ending up with nowhere. Such players sooner or later come to think about professional education. So maybe it's better to think about it early so that in half a year or a year you could start getting good sums of money from Forex trading?
It is impossible to become a professional without investing in your education. And the sooner the trader realizes this axiom, the sooner he will have good luck in the difficult but fascinating world of trading on financial markets.

Portfolio trading on Forex

The fact that successful trading on Forex market requires a well-thought-out and tested trading system is known to almost all traders. It is discussed on forums and in manuals. Besides, it is considered that trading algorithm should always be in line with the rules stipulated in this system. Only in this case a trader may count on stable profit regardless of the market behavior.
But the practice shows that no matter how perfect the trading system is, it may fail sooner or later. It is well known that surprises are possible in real trading and even the most profitable trading strategy can turn out to be inefficient or not unprofitable at a certain period of time. And this may happen regardless of the trading method used by a trader - manual or mechanical.
Functioning of a trading system
When using a manual trading system, a trader is supposed to perform certain actions strictly. In this case, time of trading, presence of conditions for entering the market, and meeting of conditions for exiting a trading position are taken into account. A trader follows all this on his/her own and fulfills conditions, which are set in the trading system, independently.
Mechanical trading (by Expert Advisors) implies a similar trading algorithm, but with the help of a software product. In such trading there are no emotional factors inherent to a real person, and the pre-prepared algorithm of trading actions is performed by the robot clearly, without any deviations from the rules.
Trading system vulnerability
So what are the vulnerabilities of a trading system, and why can traders have problems when using it in one way or another? The thing is that if we analyze a lot of information related to trading on Forex, we can come to a conclusion - the market is built in a way that its behavior does not always fit a formal perception. Some even compare it with a living organism, which behavior is difficult to predict and not always possible. Therefore, no matter how well-thought-out and tested a trading system is, it will not be able to respond adequately to non-standard situations when the market turns out to be a dead end.
What to do in such a case? The answer is simple. You need to have an arsenal of several trading strategies and use them depending on the conditions, which the market dictates.
In other words, portfolio trading at Forex is a tool that can provide a stable and truly profitable trading, regardless of how the market behaves.
What is forex portfolio trading?
- Forex portfolio trading is not just a collection of different trading strategies, but also the ability to use them in the market, no matter how the market is doing.
For instance, if you follow a system, you open trades solely on the trend. It makes you profit and you are used to it. But what do you do when the trending price movement is over and the market goes into a phase of prolonged sideways movement? This is the scenario where portfolio trading comes into play. The trend strategy gives way to a system which allows you to make a profit during the flat period.
Thus, by applying portfolio trading you can get:
- Uninterrupted trading opportunities in the market. - Balanced risks. - Reduced drawdown levels. - A smoother growth curve for your account.
But to get the efficiency of the portfolio you need to include only a proven system. Also you need to learn how to correctly assess the current market situation, so the chosen strategy will be exactly in line with the actual market situation.
What can I include in a portfolio for forex trading?
The following techniques can be recommended for inclusion in a portfolio:
1. swing trading system. Swing trading involves opening trades for a relatively short period of time. Usually the trading period is not longer than one trading week. The trades are closed manually or by stop-loss. This method is not only profitable, but also allows essentially limiting the risk component of trading.
2. The system of trading in the direction of the trend. Trending forex strategies are used during steady unidirectional price movements, and show good results.
3. Scalping forex strategies can be used for short-term trading. Despite the fact that this method of trade is often considered risky, in good hands it brings good profits.
4. Counter-trend trading system. You may not use this method very often, but it is necessary to have it in your arsenal.
5. It is a trading system, adapted to the lateral movement of the price (flat).
Thus, using different strategies from the portfolio it is possible to achieve impressive results. The main thing is to follow the dynamics of the market, and in time to switch to the strategy that is more consistent with current events in the Forex market.

Profitable work on forex market with forex advisors

Forex Expert Advisors are special programmes, which are designed for automatic work in the Forex market. They give a great opportunity to make automatic deals without any human involvement. To start using these advisors, you only need to deal with the settings of the selected program. Here you need to set the parameters on which the robot will operate and make a profit.
The benefits of using EAs
An advisor always automatically follows the new trends at a given time. Most Forex Expert Advisors use special indicators or other types of analyzers. They independently examine and compare any conditions and possible market factors, and, as a result, open trades based on their own analysis, all this happens automatically.
There are the following types:
Algorithm trend-following advisors, are most set up to profitably trade on the trend, all of which are bound to take the longest possible positions with high profits. Pips and scalpers always work according to their own algorithm, which is set up to make multiple trades, often with a large lot - several pips for each trade. Multicurrency types are fully versatile, all of them can work on many trading pairs simultaneously or individually. Pyramid or martingale Expert Advisors use their own algorithm, which is set up to significantly increase the lot immediately after a losing trade. This is the riskiest of all modern Forex Expert Advisors.
Good Forex Expert Advisors have quite an important advantage - it has no emotion, no hasty decisions and no nerves. This is the main advantage of this robot over many live traders. In fact, such Forex Expert Advisors are not as perfect as they may seem at first glance. There is also the possibility that the EA may one day make you a bankroller, so you need to keep an eye on them.
Many traders sometimes forget that a used Forex Expert Advisor is just a robot, which has been written by exactly the same person to make different transactions in the market. It does not take much effort to download such a robot for free, but you cannot teach it to think like an intelligent person. So, trust it, but still test it with a demo to find a profitable option!

Pros and cons of forex trading

Every profession or activity has its positive and negative aspects. Two sides of the same coin come to mind at once. Forex trading, where you can easily and quickly improve your financial situation or lose the funds you have invested, can also be put in this category.
Like any other business, forex trading has its disadvantages and advantages. Let us dwell on them in details. Let's start with the negative aspects of this business.
Downsides of the forex market
Risk. Risk is the most negative aspect of this kind of trading. But if the trader has a sufficient theoretical knowledge and experience in trading then the risk can be minimized. Losses in Forex are limited only by the sum, which the trader put on the deposit. You cannot lose more than that.
Choosing the wrong broker to trade with. Even in case of high-quality and profitable trading there is a risk of getting into the clutches of a swindler. Many unpleasant moments can wait for you on the platforms of irresponsible brokers and companies. That's why you have to be very careful when choosing a broker to trade with.
Psychology. When trading on the Forex market the main enemy is yourself. Many human drawbacks appear here, among which the key ones are fear and greed. To trade correctly depends much on character, temperament, discipline, and self-control. You need to constantly work on these qualities to be successful.
The positive aspects of the forex market.
Now let's have a look at the pros of Forex trading.
The first one is freedom. In forex you can trade anywhere and anytime. The only thing that is required is an internet connection. Nowadays, to open an account with the brokers is very quick and easy. And serious companies may offer a fairly tangible bonus to a beginner when opening an account. After that all you have to do is to trade and increase your profit. Forex is a very highly liquid market, so there are no problems related to opening and closing of trades.
Unlimited profit. If you trade correctly and know how to trade you can safely expect a very large profit. Every year there are more and more companies, which provide access to the currency market, giving more choice to traders. All brokers have demo accounts. In a demo account you can practice making trades in a real time mode without risking your own money. Now it is possible to trade on Forex with a minimum investment of as little as $1.
Some people may think that there are less pros than disadvantages in Forex trading, but it must be mentioned that the advantages of trading are rather significant and with smart trading they easily cover all the existing risks.

Pros and cons of intraday forex trading

There is an opinion, and rightly so, that forex intraday trading is the most difficult type of trading in the foreign exchange market. This is not a good forex trading method for beginners. You have to be experienced in trading, have skills in proper graphic analysis of Forex market, have deep knowledge in technical analysis, but most importantly - to have a steel will, iron nerves and unwavering discipline to work intraday.
What attracts traders to intraday trading
It's difficult to have all these qualities at once. That's why there are so few truly successful intraday traders. But trading intrade has its own advantages which attracts more and more followers time after time.
1. higher profit percentages due to the fact that intraday trading covers all price movements during the day. If a medium-term trader works in one direction, as a rule, the trend direction, then the intraday trader intercepts movements in different directions.
2. The possibility of more flexible behavior on the market. As you know, the market is not very predictable. Yesterday all analysts based on their brilliant strategies, predicted the movement upwards, and today it is going downwards, contrary to all predictions. Intraday traders, are able to reverse their bets according to the situation. Medium- and long-term traders can "hang on" for a long time with their losing trades.
3. having clear boundaries between the working day and the leisure time. An intraday trader works during the day. As a rule, all the deals are closed by the night. And the trader can quietly sleep, have rest, and not be psychologically tied to the exchange. It is quite a different matter with medium- and long-term traders. Their deals will "walk" for several days or even weeks, keeping a trader in constant psychological tension and anxiety for the fate of the deal.
And yet, there are some disadvantages.
For many people the disadvantages of intraday trading on Forex outweigh the pros. For example:
1. as a rule traders choose working timeframes no higher than 1 hour. They mainly work on five-minute and fifteen-minute timeframes, sometimes even going down to the minute timeframes. And the work on minute timeframes is dealing with "informational noise" of the market, where only very and very experienced traders can distinguish the main price movement from the movement of provocations, short-term news spikes, etc. Forex beginners usually cannot do that.
2. Intraday trader has to permanently pay attention to the market. Practically, an intraday trader is chained to the screen from morning till night. In contrast to medium- and long-term traders, who after placing bets can only come up to the monitor from time to time to control the process.
It is not so easy for an intraday trader to determine the acceptable mathematical expectation of the deal. Stops are usually short, but intraday traders' take-profits are not large as well. They rarely catch global trends. Therefore it is very important for them to have a trading strategy which allows making statistically larger amount of positive trades than negative ones. While medium- and long-term traders can afford having a higher percentage of negative entries, due to more favorable stop and take profit ratio.
Of course, each trader decides for himself how and on what time frame to trade, but, strange as it may seem, those who survived the market, trading on "small" charts, and gained some trading experience, sooner or later shift to medium-term trading.

The Psychology of Forex Trading: Greed and Fear

Traders tend to make mistakes and break their own trading rules.
Winners and losers are known to have heightened feelings. For one it is euphoria, for the other, usually a sharp decline in self-esteem. Anyway, if the psychological state is disturbed to one or another side, trading will not go well.
What then should a trader strive for, if not for money? First of all, you should not think about profit but about the trading perfection! The money will come by itself if the trader works only within his own system, proven by time and demo account.
Greed in trading
Some people are not willing to part with a cent of their money. As traders, we all know that losing trades cannot be avoided. That's the price of trading. And when you hate losses, become prone to make bad decisions, you are often guided by gambling and make other mistakes which will make you lose even more money.
Losses from greed to close losses on time lead to even bigger losses, right up to the liquidation of the deposit.
Only a psychologically balanced trader who adheres to the rules of the strategy and sets protective orders will profit in the long run.
Fear in Forex trading
Some traders are afraid of losing their money. Money which you are afraid of losing should not be invested in trading. This fear is due to the fact that the invested amount is significant for the trader. A trading signal appears, but the fear is too strong, because there is a risk to lose all or part of the amount, it puts psychological pressure, and the trader looks for ways to avoid trading.
Such traders enter and exit the market quickly and do not let the profitable trade reach its full potential. Of course, by doing so they avoid large one-time losses, but these mistakes will affect their trading accounts to an unimaginable degree. And all this up to a certain point, up to a mistake, when the planned small plus suddenly turns into a big minus, which greed prevents them from closing.
And the fear of losing everything makes them make inadequate decisions, putting aside the rules of the trading system. Although, usually these traders' algorithm is poorly prescribed.
Forex trading is a psychology
A simple example, let it be from the stock market trading. A trader bought a stock for $1. According to forecasts its price should reach $2. But it stops at $1.4 to $1.45 and oscillates there for a long time. The reason for that is the steady level created last week. When this happens, doubts begin to overtake the trader. He starts to think that there are not enough buyers and the price will soon fall again. He exits the trade and immediately the price breaks the level and reaches $2.5. Yes, he's made some money, but it's also a form of loss. Usually, in this case, the trader experiences more pain than with a loss in the usual way, when the price went against him. After all, he had calculated everything correctly. His trading system was giving out a successful signal, but he failed to use the "technique". The trader was ruined by the psychological component of trading. As a rule, he or she will get angry, blame himself or herself for not being patient enough and, in order to compensate for the loss, will start making random deals. And random deals, like random connections, rarely lead to good.
It is an interesting way trader adapts his psychology to forex trading by rearranging his thinking. Like Buddhist monk, he learns himself bit by bit, progresses, thereby making his career. To achieve long term success it is not enough to arm yourself with the most modern and most secret Forex strategy, you must also learn your thinking process, because forex trading is first and foremost a psychology.

The reality and chaos of forex

When Forex trading for beginners produces stable losses and every deal is closed in the red, the beginner starts thinking that to trade successfully he should learn to predict the price movement.
Having read books and talked to experienced traders he will find out that one should study fundamental analysis to make long-term forecasts. When our beginner starts studying the market history where he/she trades, he/she will definitely find what is called repetitive patterns.
What are recurring patterns in Forex?
During long periods of time the market moves in cyclic waves up and down. If a trader is attentive, he/she will notice various technical patterns that appear on the price chart over and over again. Discovering the world of mathematical forex indicators, he will see that most of the shapes are repeated near the most important peaks and troughs.
By discovering all these patterns, he will calculate how staggeringly huge the profits could be if a certain trader takes the right action at the right time. No wonder, when a new trader will conclude that the market, time after time, repeats itself, and it is enough just to learn all figures and install on the terminal Forex Grail indicators to become a billionaire. Maybe, the market is organized in such a way, that it repeats itself every time in some encrypted form. All you need to do is to find this cipher and solve the puzzle! Then it will be possible to completely avoid losses and make huge profits.
Armed with all possible literature, our trader, like the first Templar looking for the holy casket, will begin to pursue the goal of finding the secret cipher. From time to time he will receive e-mails with offers to sell some perfect trading systems that are able to recognize repetitive patterns. Since quite often such "brilliant" strategies are worth several thousand dollars, a trader may easily believe that they are able to provide their owner with profits and get a new forex scam for good money.
As a rule, such MTSs are advertised in brochures, which usually talk about legendary traders or reclusive traders who have suddenly discovered an incredibly profitable trading formula. And such statements further strengthen a beginner's faith that there really are people who have managed to discover in the market what is hidden from others.
But even with so many predictions in books, trading systems and programs, every year nearly 95% of traders lose their money. But none of the players think about whether there really are repetitions in the market? Could it be that it is chaotic?
It is human nature that we are receptive to ideas that give us hope. People believe in an idea even though there are hundreds of proofs that it is wrong. The most dangerous kind of trader is a trader who made a profit on a short period of time and fiercely believes in his idea. A fleeting success can turn a sensible trader into a fanatic. What is the most important quality of a successful trader? Undoubtedly, a lot of different qualities are important for a trader, but one of them is the most important. He must perceive reality as it is.
Losers traders have a wrong perception of the markets, of themselves, and of their actions while trading. To make a profit in the future it is crucial for them to get rid of this distorted view of the world. It is important to realize that the market will try to reinforce their false perception of reality all the time.
People who have gone through this begin to relate to the market in a different way. They now look at it through chaos theory, eliminating the study of price movements by mathematical or statistical methods and by not trying to identify some recurring cycles.
Markets are non-linear dynamic systems that can be analysed using chaos theory. In particular, when this theory is applied, it becomes clear that markets are a random set of price characteristics with a small presence of a trend component. The value of this component is measured according to the type of market and the time frame value.
In order to better understand the chaotic motion of the market we use the term 'fractals'. The definition of a fractal is rather difficult to grasp by ear: it's an object which has the property that one of its parts is similar to the whole object. However, once we put this definition into our everyday framework, everything becomes clear. For example, take a tree. As we approach its top, the branches of the tree become smaller and smaller, although any branch is similar in structure to a larger branch and finally to the tree itself. The same property can be found when studying price movements on hourly, daily, weekly and monthly charts. In spite of the different timeframes, their structure remains similar.
Why is a chaotic market so difficult to predict?
Now it's time to talk about such market characteristic as "sensitivity to starting conditions". Because more and more errors in describing the market situation are accumulated over time, the system becomes more and more complicated, and therefore it becomes impossible to make predictions.
Even if we forecast price movements accurately for tomorrow (which is impossible to do in reality), predicting price movements two weeks ahead will still be close to zero.
Many experienced and thinking traders assume that trading, for example on a five-minute interval, is an attempt to make money on random noise and equates to a waste of time. In the end, noise traders are left at a disadvantage because their profits eat up the cost of trading (commissions, overheads, etc.). However, at the same time they say that long-term price movements are not random. Therefore a trader who trades on a daily or weekly chart has a good chance of success.
Think about how it is possible that short-term movements with a random character merge into long-term movements which already have a clear trend. Doesn't it seem like an absurd idea? In fact, the idea is correct and such a paradox exists. One should remember that there are no repeating cycles in the short term, and indicator patterns and prices that players rely on when trading can always be found in a set of random numbers. It turns out that price prediction in a short-term movement is a kind of prediction of numbers falling out in a lottery ticket.
Does it mean that the market is a random fluctuation, so every trader is doomed to fail sooner or later? Not at all. Players can take advantage of the long-term trend component, which will give them an advantage. All trend-following systems work in the same way, and this, by the way, explains why such systems, on the background of their other fellow traders (who trade intraday) bring good profits a year.
If you want to be a successful trader, put yourself in the shoes of the casino owner as often as possible, who has the upper hand on any bet. Yes, the casino may incur losses, but the more a person bets, the more the casino wins. Therefore, a trader whose approach is based on the long term may incur losses on any given day, however, he will always end up winning in the end.
What is the result of a successful trader? There are three components: discipline of trader's trading, market choice, and system itself. The last point is quite specific: we can never predict when our system will show its advantage over others or when it will fail.
Most traders use trading methods, which they have read in books or learned from others. They do not think if their method has any statistical advantages, and if their trading system is described in a book by a trading guru, it must work flawlessly. Besides, they are too lazy even to test their system on history. Do you recognise yourself in this description? Then don't be surprised that trading brings you nothing but losses. Yes, trading can be fun for you, but remember that you have to pay for the fun.

Scalping and Pipsing on the Forex - Advantages and Disadvantages

Those who are interested in the methods of trading at financial market may have heard such terms as scalping or pipsing. Even experienced traders who have been on the Forex market for many years have mixed feelings about these trading methods.
What is scalping in trading? - Scalping is an intraday forex strategy on minute, five-minute charts. As a rule, scalper traders try to work with the confident price movement in one direction or with a distinct flat and during important news releases.
Usually in this type of trading, orders are placed within a few minutes and the average profit is measured in multiples (pips, hence the name for this type of trading: Pips). Large profit is achieved due to a significant number of deals - up to several hundreds per day.
Of course, Forex is volatile and scalpers make a lot of losing trades, but if you trade skillfully, your total deposit balance will be in the plus. The question is how to achieve this positive result. In theory it is simple - the total number of profitable trades should exceed the number of losing trades where stop loss does not exceed 10 pips.
The scalping method in simple words The currency market is very dynamic. Looking at the daily candlestick of a currency pair, we see that on the day the asset rose or fell by, for example, 20 pips. That is, if a trader opened a position 24 hours ago and chose the right direction, he/she would earn some profit during the day. But if we look at the minute charts, we will see that the price has risen by 100 pips, then fallen by 80 pips, and then was moving in a narrow range bounded by 20 pips for several hours, i.e., if orders were opened correctly, we could have closed dozens of deals and earned about 200 pips a day. Any trader will confirm that 100-200 pips of profit a day is a grail, the life is successful! Hence the large number of supporters of this method of Forex trading.
The possibility to make several hundred percents of profit per month fascinates newbies. But, unfortunately, not everything is simple in our world - high profit automatically means high risk. Traders who have been trading by scalping method for more than a year, know very well how pipsing kills accounts, crushes dreams....
Scalping strategies of forex and pipsing are very profitable, dangerous and unpredictable - although superficially simple (which is why scalping on the stock market is usually used by either beginners or very experienced traders).
Why is scalping dangerous? Firstly, there is always market "noise" on Forex. Even if the price movement is correctly detected, a scalper trader has a high chance to get a stop loss (as we mentioned before, in this kind of trading the stop is just a few points away from the order opening price).
Secondly, it is not so easy to determine the trend on small timeframes correctly even with special indicators for scalping because of a lot of false signals.
Thirdly, beginners who have closed several times to a stop loss make a typical mistake - they either stop placing protective orders or start shifting them. The market does not forgive this - sooner or later the trader will catch a strong trend movement in the wrong direction and lose all the money on the deposit.
One more important point not considered by newbies is a heavy psychological and even physical strain when using scalping methods of trading.
Trading on demo-account and real money is very different. A beginner tries scalping on a demo account, makes a profit, goes to the real account and there it goes... A few successive stops triggered (loss of a large part of the deposit), fear and uncertainty appear and the trader appears again, but waits for additional "strong" signals of some newfangled strategies and waits for a strong movement in its direction (of course, the order does not have time to open). Then comes the anger - I won't place a stop loss and will leave the order open until morning .....
Also, scalping and pipsing at the exchange involves the constant presence of the trader in front of the monitor and a readiness to open or close transactions at any time. This is physically very difficult for many hours in a day. That is why most of the beginners leave the market or switch to other trading strategies.
To sum it up, scalping system is the only one with the highest profitability on the currency market, but only in potential. To be successful in trading, a trader should be experienced, resistant to stress, mindful of risks and work, work, work...

Short-term forex trading

When comparing different ways of trading activity on the currency market, short-term trading is undoubtedly the most popular.
It is especially popular among the beginners. This is due to the fact that this method of Forex trading allows for a relatively short period of time (usually one trading day) to get a pretty good profit. It may happen that in order to achieve a positive result in the transaction trader may need only a few minutes. And if the trader works in this mode all the time, the number of performed deals is difficult to even count.
But it is good when total profit in such deals prevails over the loss. The apparent simplicity of short-term trading and its high profitability is a wrong side of the coin. Such trading activity is considered the most risky, and one can lose his/her trading deposit rather quickly by using this type of trading.
For whom can short-term trading be successful?
As a rule, short term trading strategies can only be successful for traders, who have mastered the methods of technical analysis with extensive experience in trading. In such trading, the personal qualities of a trader, his iron will, nerves of steel and, of course, the ability to observe strict discipline often come to the forefront.
Naturally, these qualities are not known to everyone. Maybe this is the reason why only few traders are successful using this trading method. But short-term trading has its own advantages, which cannot be ignored, that is why many traders prefer working within the trading day.
Advantages of short term trading
So, the main advantages of short term trading on Forex, are as follows:
- Firstly, such trading gives the trader an opportunity to manoeuvre, he can at the right moment rearrange himself and make a decision that will correspond to the current market situation. In this way the trader can ensure that the level of his losses will not be critical. In the work of traders who practice long-term or medium-term trading on Forex, there can be a period when their deals are in the negative zone for a long time.
- Secondly, short-term trading allows the trader to plan his working day more clearly. He or she can both open trades and exit the market at the end of the trading session without leaving any positions open. All this gives additional comfort to traders, as they can avoid unnecessary worries about the fate of open positions.
Disadvantages of short-term trading
Despite the presence of certain advantages, disadvantages of such trading are also clearly seen, and often their weight significantly exceeds the advantages.
- Usually, when practicing short term trading, a trader uses a time period not exceeding one hour. Very frequently fifteen-minute, five-minute and sometimes one-minute time intervals are used. But, as we know, on small timeframes the "informational noise" is the most clearly perceptible, and only a trader with vast trading experience is able to distinguish it from the real price movement.
- Short-term trading, as a rule, requires from the trader high attention and, as a consequence, a constant presence at the terminal. A trader's working day in this case is quite busy and intense.
- As a rule, a trader working in the short-term trading mode is constantly faced with the necessity of defining the mathematical expectation he or she is planning to get from a trade. Usually he should place short stops in deals, while the level of profit should not be too high. As for the global trend, short-term trader manages to catch it very seldom. All this requires application of a trading strategy which allows making much more profitable deals compared to the number of losing trades. In this aspect, traders who trade with a medium- or long-term method have a certain advantage. They can afford more losing trades and take profit on the basis of more favorable stop-profit ratio.
To sum it up, it should be said that eventually it is up to a trader to choose a timeframe, which is more convenient for them to work on the currency market. But it has been noticed that as traders gain experience, they change their preferences. As a rule they give up short-term trading in favor of middle-term trading and leave the right of sitting at a trading terminal to novice traders.

Simple rules of money management

Money management involves many issues that are related, first of all, to the safety of trader's money.
It includes evaluating the volume of investments in a certain market, diversification, finding the right balance between possible profit and loss, and therefore the technique of placing protective orders, choosing tactics after periods of failure or success, etc.
- The golden rule of online trading is to first save, and only then multiply.
There is a lot of literature that covers all of these issues in detail. But at first it will be enough to make a set of simple rules that should be strictly followed for currency trading to make any sense.
Some basic rules of money management
1. You should not invest more than 10% of your total capital into the market. For example, with a deposit of $2000, only $200 can be used to open a position on all selected trading instruments. In this way, the trader insures himself from investing too much money in a single operation.
2. the trader must be prepared for losses. But losses should be minimal, ideally not more than 5% of the total amount of investment, if the transaction turns out to be unprofitable. In other words, the risk percentage for each currency in which a trader invests his funds should not exceed 5% of the total amount of his capital. That is why every transaction should be planned in advance. You should determine the location of the protective order on the terminal and calculate how much loss will result to the trader if it is triggered. And so for each planned transaction. The risk rate is the most important rule, which should be followed by the trader when deciding on how many positions he can open at once, minimizing losses.
3. When several positions are opened on one or more trading instruments, the total investment rate can be increased up to 20-25% of total capital. However, this should only be done if previously opened positions have been converted to at least lossless position, and a stop-loss order triggering on them will not cause losses to the trader's deposit.
In this case, with proper analytical calculations it is quite possible to open additional positions on previously selected currency pairs or open new positions on the profile of some currency. The markets belonging to the same group move more or less equally. This can be seen, for example, in the appreciation of the dollar, if it is going up, it is going up against all currencies at once. But - first - transfer the protection to Breakeven, and then recalculate for new orders, according to the conditions outlined above.
Using these simple rules, as the deposit grows, the amount that can be used in each transaction will increase, and this, in turn, will lead to higher profits, and the profit will again increase the total amount of investment. And so it goes round and round. But in order to keep the profits growing, you should first take care of saving the money you already have.

The worst forex situations. How to avoid them?

Working on the Forex market can be classified as a very difficult activity. This article contains the list of the most disadvantageous situations that traders should avoid. Any of these situations can play a deplorable role, first of all it concerns financial goals.
So, let's begin. When choosing a broker one should be aware of the risks as not all the companies are reliable and many of them play against their own clients. It is especially true for the binary options brokers, who advertise their services so aggressively lately.
You cannot trade an amount of money that you cannot afford to lose. When people start trading with vital money, they have risk and fear, so the result of the trade turns out to be a losing one due to psychological stress. In general, only trade with an amount that you will not face serious financial problems if you lose it.
You should not take Forex for a roulette, there is no place for gambling. First, you must learn the theory and consolidate your knowledge in practice. After all, a successful trader should always be confident in any deal, and not trade at random, as many traders do. Of course, even professionals make mistakes when trading on Forex. The most important thing is to take a calculated and competent risk.
Very often many beginning traders are lucky and find themselves in a very profitable situation. It would seem that there is nothing bad in it. Even a favorable outcome can lead to serious problems for the trader. Profitable deals put players in a state of euphoria and they start dreaming about big profits they have not yet earned. The trader is in dreams and expectations, thus forgetting about trading. In the state of euphoria the beginning trader starts considering himself a professional. Therefore, he/she makes a lot of ill-considered decisions which have negative effect on the profit. Eventually the trader goes bankrupt.
People who were successful in other spheres of activities face the same problem. Therefore, they are sure that they will never face such situations. Their self-confidence is a big problem for them. Also, such people do not admit their mistakes after failures, which is a gross mistake. It turns out that they do not learn from their mistakes, so they will make them again and again.

Software for forex trading

Effective trading on Forex market today is impossible without high quality software, the choice of which is quite large and diverse.
It would seem that a trader just need to trace the emergence of new forex trading programs, analyze their advantages and disadvantages and use them in his work.
However, it is not that simple: many advertised assistants turn out to be only loss-making or useless.
It should be noted that forex trading software is a fairly powerful trading tool in the hands of a skillful trader. That is why their quality and reliability should be at a high level.
But how can a trader make the right choice as there are so many of them?
Choice of programs for forex trading
Today, most brokerage companies and independent creators offer in-house developments, all of which are divided into the following categories of software products:
Automatic software - used to organise trading without the direct participation of the trader, whose role is to set up and monitor the program. Automated aides include trading advisors, automated trading systems, in a word, everything that frees the trader from routine work, eliminates the psychological component, spares his nerves, but at the same time is designed to increase his capital. These systems include a specific set of forex indicators, signals from which the algorithm of the Expert Advisor is built.
Analytical software for graphical analysis. This software is based on technical analysis of the current market situation, which is displayed on a chart of the asset, and has many useful features. There are programs that identify candlestick patterns, chart patterns, reversal or continuation of a trend.
Programs for copying trading transactions. This software allows the trader to benefit from the experience of professional traders and replicate their entries and exits into the market, setting only the lot size. Such trading programs are produced both by brokerage companies and independent traders and work in automatic or manual mode.
Choosing the right program tools for operations on the financial market allows traders to organize their trading time in the most effective way and, correspondingly, to get the maximum profit from trading.
However, one should not blindly trust all found programs. Firstly, any software should be tested on a demo account so that you can adjust the program to your needs or replace it with another, more profitable one. Without preliminary testing it is not recommended to use software products in real trading, otherwise it may result in complete loss of the deposit.
In the age of IT-technologies software for forex trading is becoming a common thing, but it is up to the trader whether the software you choose will be a reliable assistant or a tricky depositor.

The stages of Forex trading

5 Key Stages of Trading
All Forex trading can be divided into 5 stages. Three of which will be intellectual and the rest will be reflexive. But let us proceed in order.
1. Searching for possibilities This stage is essentially elementary study of charts for several hours in order to determine which situation is most suitable for your type of working forex strategy. Naturally, this process is entirely intellectual.
Here, for example, you have always traded on breakouts and you enjoy doing so. So, you spend a lot of time searching for the appropriate breakout, but you cannot find it. And then suddenly a situation occurs that is very similar to one of the breakouts. It is true that the resemblance is distant, but something pushes you to make this deal. That is, at this moment the deal looks attractive enough, and you make it, although you understand that this is an unsuccessful deal in advance.
Before you make any deal, you need to decide on a course of opportunity-seeking and stick to it. But for you, at some point, you may find it boring and then you need to find an approach that will stimulate your interest.
2. The opening stage of a position This is a purely reflexive stage. This means that from the time you find a suitable market situation until you place your order, it should not take more than a few seconds. You can only open a position once the situation has been fully identified. What you need to remember is that if you are not sure of yourself and your correctness at the first stage, you will definitely have nothing to do at the second stage. Generally, traders who lose money lose their profits because they do not trust the work they have done themselves.
3. Position management For most players, this stage will be one of the most difficult, because at this stage the player's money is already in the work and the trader may panic a little. But any trader just need to learn to control their emotions, whether it be fear, greed or hope. When the trader becomes more successful, his emotions will gradually recede into the background, but for now the player must simply learn to ignore them.
4. The stage of closing the position This stage is a reflexive one. This means that in the transition from the third to the fourth stage the trader's brain is not preoccupied with such issues as profit or incurred losses. It just has to close the position and get out of the trade.
5. Fifth stage. This is analysis. If you do not keep a diary where you register all your trades, then it means you trade currencies just for the sake of trading. If you want to become a professional trader you should make it a rule to keep strict records of your trades. Any trader, beginner or experienced, should keep in mind that the most profitable trade only works once, but if it does work out, it will bring the player a decent profit.

Stop loss invented by cowards?

Of all the problems faced by the trader, the problem of his attitude to protective orders is the most difficult. Rarely do players understand at once that it is not for nothing that the experienced traders and well-known masters of online trading repeat from book to book, from article to article, how necessary a stop-loss is for successful trading in Forex.
The beginners shrug off this advice without considering protective orders in the Forex strategy for beginners, preferring to live in captivity of illusions. To them, stop-loss seems like a waste of money. Indeed, what if the protection works and the deposit is deducted? Some people see a global conspiracy against traders. They say that the stop-loss was invented on purpose, to make the currency market players lose money for no reason.
And only after several accounts are wiped out, and tears are shed, newbies grudgingly open the forgotten books and flip through them in search of words that seemed unnecessary to "future millionaires" yesterday. And now they are thinking about risks, money management and stop-loss, but now with a completely different understanding and approach to the problem.
Rules of working with a stop-loss
It's time to learn, understand and apply the rules of stop-loss order operations.
1. A stop loss is working by the rules.
Forex trading without a stop-loss is a guessing game with the exchange, similar to a casino. In this game, the one who deals the cards, in our case the forex exchange, always wins. And do not think that if you are lucky in this game today, you will be lucky tomorrow.
2. Stop-loss is set below or above a certain significant level.
There are many significant levels. How to determine the necessary level of stop-loss? Very simply. Here the rule "minus one, plus one" applies, which says that if we enter the trade, guided by signals of a certain time-frame, then we set take-profit at levels of larger time-frame, and stop-loss at the levels of the smaller.
Let us say we entered the trade when we saw a signal on H1. Take Profit, we will set, focusing on levels H4, and stop loss, focusing on levels M15. However, it is better not to place a stop loss close to the levels, but at 10-15 points from them. On a buy transaction, it is 10-15 points lower; on a sell transaction, it is 10-15 points higher. But this distance should be determined independently for each TF.
3. Stop-loss may and should be moved, but only in the direction of take-profit.
When new levels are formed on the timeframe, on which stop-loss is determined, protective order is moved to reduce the risks. This approach greatly reduces the risk of a negative position.
Although you should not move the protection immediately after the price has passed 10-15 pips, unless of course the aim of the trade was the size of the profit. It is better to wait for the correction on the working TF or on a smaller step, and only after its completion move the order to the new levels.
4. Forex is a very dynamic market and the behavior of currency pairs strongly depends on various economic or political news, any of them can short-term affect even an established trend.
Therefore with very small stop-losses there is a high probability of their triggering, which of course will not make the trader very happy, especially when price, after knocking down orders, rushes in the direction which the trader set for his Forex trade. Setting too "long" stops is also not comfortable, because even such protection can work, in case of incorrect analytical calculations of the trader, significantly reducing the player's deposit.
So does a stop-loss on Forex?
As soon as the trader comes to the realization that stop-loss is a necessary tool for risk control, while risk control is the basis for profitable forex trading, from that moment the beginner is no longer a beginner. Now he is almost a professional trader. And his success in this field becomes a matter of time, but it's inevitable.

The story of the Dow Jones Index

"Why do we need all this? After all, we want to work in the foreign exchange market, not the stock market!" you will say. The fact is that all the dynamics of the stock market have a very significant impact on the Forex market. Stock indices show us quite transparently the health of the state economy, and in particular its different sectors. For example, if the US economy shows high growth, the investors of the world buy shares of American companies and firms, releasing funds from other assets, and at this time, the dollar exchange rate usually decreases.
It is known that when Forex does not have its own drivers for movement, as a rule, the market starts moving in the rut of the stock markets dynamics: national indices are rising, the currency does not stand still as well. This is why traders around the world keep a close eye on stock market indices. So, let's get acquainted with the index number 1.
A brief history of Dow Jones The first index in the world was created by Charles Dow (1851-1902), an American famous journalist who founded Wall Street Journal, one of the most famous financial publications in the world. Dow spent a lot of time and energy studying the laws of the securities market. His research marked the beginning of the "technical analysis", in other words, the method of forecasting price movements with the help of chart analysis.
Also Dow set himself the task of creating a stock market "barometer", that is, an indicator which would be able to quantitatively - in the form of a single figure - express the "mood" of the market. The task is not an easy one: at the same time stock prices of some companies go down, others go up, and still others stay the same. How can we assess the health of the US stock market as a whole, rather than of a single company?
Charles Dow found an answer to this question, and his "barometer" was created on July 3, 1884. Like all brilliant things, the method was simple enough: the journalist simply started counting the average closing price of shares of 11 companies once a day. Some stocks may have fallen and others may have risen, but the change in the average price of these stocks allowed him to see the general trend.
Naturally, this index was not perfect at all. Firstly, there were only 11 companies. Secondly, almost all of them were railway companies, in other words the index did not show the 'feel' of the stock market as a whole, but only its railway sector (afterwards it was called the 'railway index'). In spite of this, a general method of numerically measuring market dynamics was nevertheless established.
Most likely, Charles Dow understood the "bias" of his own brainchild towards transport, and therefore in 1896 he created another index - the industrial one. It was calculated on the basis of shares of 12 industrial enterprises and was called Dow Jones Industrial Average. By the way, besides the surname of Dow in the name of this index, there is the surname of Edward Jones, his friend in the publishing business.
Dow's invention was further improved. In 1928 the DJIA index included shares of several more companies and companies, which together totalled 30, making the index the most accurate. In order to prevent rapid changes in the index value in cases such as share splits, the calculation formula was made much more complicated.
Imagine this: an enterprise in the index suddenly decided to "split" its shares - for example, it announced that from then on, the owner of 1 share of $20 is the owner of 2 shares of $10. But the index itself is calculated as an average value of shares of 30 companies. And suddenly, out of those 30, one share has halved in price. As a result, the entire index went down, even though there was no real reason for it to do so. To get around these distortions, certain configurations were changed in the formula for calculating the index. And for over 80 years, the DJIA has been in the hands of traders and stock market analysts.
Types of the DJIA Index The Dow Jones Industrial Average is the best-known of the Dow Jones Index family. When people say: "the DJIA fell off" or "the DJIA opened in the green", this is what they mean. The New York Stock Exchange, which lists the securities of America's 30 leading industrial companies around the clock, has updated its value every half-hour.
But, if you have noticed, the method Charles Dow invented can be used to analyse not only the state of the industry, but also other sectors of the economy (including the market as a whole) more clearly. For this reason, the DJIA family of indices includes the following indicators:
- DJIA Transport Index (a descendant of the "railway index" described above) - calculated on the basis of the share prices of 20 railway companies, airlines and motor vehicles;
- DJIA utility index - calculated on the basis of share prices of 15 companies from the gas and electricity supply industries;
- DJIA composite index - calculated on the basis of share prices of all 65 companies that make up the remaining 3 indices. Although the Composite Index represents the overall US stock market, the DJIA is still the most authoritative index.

Swing trading on forex

What is swing trading?
Despite the fact that this type of trading has been known for a long time and is described in details by J. Douglas Taylor in his book "Taylor's Trading Technique", this trading method has gained wide popularity relatively recently. Therefore, let us discuss it in details.
So, let's start with the terminology. "Swing" means swing, swing amplitude, swing, rhythm, turn.
As a result of such price swings a profit is made, but the transaction is not designed for a long period. In swing trading, a position usually remains open for no more than five days and even less.
The goal of swing trading in forex is to make as much profit as possible with as little market entry as possible.
If we take a broader look at this question, we will find that the term "to swing" has a certain meaning which is directly related to trading.
On the one hand, it indicates that you should "walk the measured steps" in trading, i.e., take your time and be careful, and, on the other hand, it warns that you can "be hung" and lose everything if you trade unprofessionally.
Based on these tenets, it is clear that swing trading in forex is based on the principle of avoiding unnecessary prolongation of trades. It is believed that it is better to close a trade rather than wait for it to accrue a loss, thus depriving the trader of the opportunity to enter the market from more profitable positions.
Reasons for the popularity of swing trading
1. It is a style of trading where a position is "active" for several days allowing a trader to find the best time to close a trading position and make a profit, or to stay out of the market when it starts to "storm".
2. Swinging is used by many investors in times of market instability to reduce the risk component of trading.
3. Swing trading in forex is ideal for traders whose daily schedule does not allow for intraday trading activities.
Swing trading rules
First of all, it should be said that swing trading is a part of a large market cycle. And if a trader wants to take advantage of its movement and make a profit, he or she should act flexibly, correctly evaluating the current market situation. Depending on this, apply the trading methodology that best fits the current market dynamics. This trading strategy might sound complicated. But time invested will be more than paid off if the details are thoroughly studied.
The following rules should be observed in swing trading:
1. The volume of trades you open. Since swing trading is not a long-term strategy, and the trades are opened for a relatively short period of time, the volume of the trading position should be such that the transaction can withstand a short-term price correction in the opposite direction to the open position. It is up to the trader to decide on this volume, based on the size of his deposit.
In particular, if volatility of the currency pair fluctuates in the range of 100-150 pips, then it is recommended to open a deal with a volume that can easily withstand correction in the opposite direction of 50-70 pips. The price level, at which stop-loss should be placed, is chosen accordingly.
2. Entering the market. The point of entry into the market according to this strategy is considered to be the price level, at which the reversal and a new trend is outlined. It can be caused by important news publication or notable market depletion.
In order to determine this point, the trader should be able to analyse the market dynamics, apply properly the methodology of technical and fundamental analysis. It is advisable to enter the market when you are sure that the price movement vector has changed and there is every reason to believe that the new trend will not be a short term correction.
3. The duration of an open position. In swing trading it is believed that a trade should remain open as long as it is profitable. The preferred option for closing a trading position is to lock in profits at take profit.
4. Exiting the market. Closing a trading position in a trade using this methodology may be done manually, or as a result of activating stops. The decision to exit the market can be made by a trader as a result of trend reversal signals or news publication, which can cause a radical change in the vector of price movements in the opposite direction to the open position.
Postulates of swing trading
- To open a trading position, a medium-term trend must be identified as soon as it emerges.
- Entering the market is considered correct if profits start to grow immediately.
- If the target has not been reached during the trading day, and profits continue to grow, the decision on the trade should be made the next day.
- A losing trade should be closed, if there is an opportunity to enter the market on more favorable terms.
- If a profit turned out to be larger than expected, it should be closed promptly.
- If the trade turned out to be profitable, but the market shows signs of a trend change, it should be closed immediately. But if the market shows no intention to change the price trend, then one has to learn to wait and take profit at the target level.
Advantages and disadvantages of swing trading
No one needs to be convinced that there is no such thing as a 100% win-win strategy in forex. Swing trading is no exception, and it has its advantages and disadvantages.
The merits of this trading method can be considered:
- Swing trading allows you to earn regardless of the global trend of a particular asset.
- This trading method does not imply a strong emotional load on the trader.
- Swing trading allows you to count on greater profits with less risk compared to intraday trading on forex or scalping.
However, the advantages of this trading method are revealed only when a trader is able to correctly orientate in complicated market conditions and catch its dynamics. Analytical skills combined with intuition (in the good sense of the word) should help traders understand what to do - buy or sell an asset, close a position or wait for the price to reach a target.
The disadvantages of swing trading include:
- Swing trading usually uses a large time frame. The consequence of this will be large stops, which in turn requires a considerable amount of money in the trader's trading account.
- Swing trading requires a certain level of training for the trader. Without the ability to determine the cyclic behavior of price movements and trend direction correctly, it will be impossible to make a profit and correctly calculate the risks.
Who is swing trading suitable for?
Despite the obvious advantages of this method of forex trading, it is not suitable for everyone. Even traders with long and successful experience in the market are not always able to use this strategy effectively.
Swing trading will be optimal for traders
- Those who have enough patience and are able to hold open trades for several trading days;
- Those who believe that you should make money not as a result of opening a large number of trading positions, but as a result of high-quality market entry and timely completion of the deal;
- Know how to work with stops placed at a considerable distance from the entry point;
- remain calm in situations where a trade is not successful.
Swing trading should never be used by traders
- who use active trading techniques;
- traders with low patience thresholds who want to see their trading results as quickly as possible;
- Irritable and prone to nervous breakdowns - especially when trading is not going the way you want it to;
- lacking the ability to analyze market developments on a daily basis.
To sum it up, it should be noted that swing trading may not be used by all traders. But those traders who are willing to study its peculiarities thoroughly, take time and learn to catch market moods and market movements this forex strategy will enable them to earn good money.

Forex trading tactics

Forex trading tactics as a part of trading strategy is a fundamental element allowing a trader to work successfully on the financial market.
Thanks to a correctly chosen strategy, a trader can always easily navigate complicated market movements and enter the market or close a deal at the best price.
You will agree that even after careful analysis and correct determination of price movements vector, you can lose a significant part of profit if you make a tactical mistake when determining the moment to enter or close a trading position. But if a Forex trader uses smart tactics, all other things being equal, he or she achieves the best results in trading, and possible errors can be easily minimized.
So what are the tactics you should master in order to achieve the best results in trading? Let us try to answer this question in details, specifying the most effective Forex trading tactics.
Tactical trading tips
- Never try to increase the volume of your losing positions. By following this rule you will be guided by one of the best tactics used in Forex trading.
- Be confident in your trading plan and do not make hasty decisions. Do not take a critical view of your position, even if it has been in the negative zone for a while and is not profitable.
- Try to plan the deal in advance, identifying the levels at which you can lock profits and possible loss levels, at which the deal will be closed by Stop Loss. It is advisable to do it before you enter the market. The Stop Loss value should be calculated based on actual market data, rather than on the size of your deposit.
- Stay out of the market, if there are no good trading signals or the situation at the financial market is poorly predictable. Being able to wait out a lack of liquidity or increased volatility in a currency pair will be an indication of proper tactical behavior by the trader.
- Consider a trading plan when the market transitions from one state to another. The flat, the prolonged fall in price and the prolonged growth of quotations imply using different approaches to trading. They must be thought through in advance in order to be used in practice.
- Practice the technology of exiting a trading position. Remember that exiting a trade on time is more important than successfully entering the market.
- Always remember that one and the same trading plan will not always work equally well in different markets. It might be optimal in a rising market, but at the same time it might not work in a falling market.
- It is not a good idea to sell in a dormant market if the currency pair was previously in a bullish trend, or buy if it was in a bearish trend. By following this rule, you will be using one of the most effective Forex trading tactics.
- Given the cyclicality of price movements and the fact that trend directions may differ from time to time, it is advisable to trade on a currency pair which shows the same trend direction in nearby timeframes. Trading in the direction of the dominant trend is considered to be the best tactic used for making profits in Forex.
- Watch when important economic news is published. Shortly before the news becomes widely known to the traders, try to secure the trade by placing a Stop Loss protective order in the breakeven point. From a tactical point of view, it will be justified to refrain from trading during the publication of important economic news, and wait out the period of strong price fluctuations, and only then enter the market. Trading Forex news is a highly risky form of trading and is not suitable for everyone.
In the above recommendations we have mentioned only a part of tactics, which should be used to increase the efficiency of trading on Forex. As the trader gains experience, he or she may introduce some new trading tactics and thus improve the trading strategy making it better and more profitable.

Technical analysis - Persistence through the ages

When predicting the trading situation, a trader should certainly analyse the market using both technical and fundamental analysis methods. Without prejudice to the latter, it is safe to say that technical analysis is the predominant method for analyzing forex trading and market fundamentals.
Technical analysis is a method of forecasting future price movements based on mathematical deductions. Technical analysis was formed as a coherent theory and even philosophy only in the 70s of the 20th century. Until that time, it had been developing separately. At the beginning of the 20th century, charts were drawn manually and calculations were complicated by lack of computer facilities that could do the necessary amount of calculations in a short time.
But reading the literature on stock trading in those years, where the bestseller is undoubtedly E. Lefebvre's book "Reminiscences of a Stock Speculator" published for the first time in 1923, you can feel respect and piety for the masters of trading in those olden days.
At that time the main method was graphical analysis to identify trends, break through resistance and support lines, identify reversal patterns, etc. All necessary information for analytical work was made available to traders in those times from stingy telegraphic reports or from the pages of not always fresh newspapers, and the charts were drawn on a piece of paper, which happened to be at hand. But they knew what they were doing. Many world famous financial dynasties were born in those times of exchange trade beginning.
Somewhat later, traders began to calculate the average price. It was the first indicator, which made chart analysis much easier. Appearance of further indicators and oscillators, as well as improvement of averages, was made possible with the advent of computers. But, despite the fact that from the first exchange trades to date, a string of years has passed, ordered in the centuries, and technical analysis has evolved, its basics are still the same. They can be summarised as follows:
1. The price takes into account everything.
This postulate is based on the statement that all factors which influence the price, no matter political, economic or psychological, are already taken into account by the market and included in the value. Thus, it is sufficient to study the chart to predict future price movements.
2. Prices move directionally.
This axiom, in turn, is divided into two statements:
- an existing trend is more likely to continue than to reverse; - a trend exists until it weakens.
This postulate has become the key in graphical analysis and is the basis of technical analysis.
Technical analysis distinguishes between three types of trends:
- "Bullish" - price rises upwards, each successive high (low) is higher than the previous one; - A bearish trend - the price is falling and each successive high (low) is lower than the previous one; - "Flat" (or sideways) - the price moves in a certain corridor (channel).
A flat often occurs when trends change. More precisely, there is even a rule that says that any movement starts with a "flat" and ends with it.
Strictly speaking, prices do not move constantly and linearly up or down. It is simple: a bull trend increases prices faster and more than prices decrease, a bear market does the opposite, and a flat equates the upward movement with the downward one, and it is almost impossible to tell which one is dominant.
3. History repeats itself.
This postulate stresses the constancy of the laws of economics, psychology and physics at different periods of history and shows that the rules that were successfully applied in the past still work today and will continue to do so in the future. Technical analysis is eternal in this particular form and is suitable for all types of financial markets.
It is these seemingly simple definitions and laws, formulated with the experience of more than one generation of traders, that allow today's market players to count on making profits in their difficult activities.

To the myth of fast win on forex

Targeted advertisements of Forex dealing centres, screaming about the ease of fabulous success that Forex trading brings, have flooded all over the place. Newspapers, radio, TV ... Everywhere you hear that you just need to come and win a big score from Forex market, solving your financial problems once and for all ... But how? We'll teach you.
But few people think that if everything were that easy and simple, would anyone grow bread, melt metal, heal people?
Is it possible to win on Forex?
Incorrect evaluation of conditions on financial markets leads to disappointment, painful experience of beginning traders, loss of equity. To avoid these negative consequences of their acquaintance with the market the beginners should understand that making money is not easy. It is making money by works, not by winning relying on blind luck.
This rule applies to any business. And Forex trading is no exception.
To achieve something you have to at least understand it. Therefore, the question of self-education of a trader comes first and dealing centre training courses are only the first stage of this long journey.
The notion of self-education includes not only knowledge of technical aspects of trading, but psychological aspects of trading are even more important.
Development of such qualities as patience and discipline. They are the ones that keep a trader within the framework of a trading plan and do not let his emotions run wild.
After all, nothing can be so detrimental to trading on financial markets as uncontrolled emotional outbursts. In order to properly assess yourself, determine your strengths and weaknesses, and practice using the knowledge you receive, the next step in trader's education is opening a demo account.
From virtual victories to real profit
Opening of demo account is absolutely free of charge and does not take much time. You can download the program from the website of any brokerage company. But you should understand right away that working with demo account is the most time-consuming and important stage of trader's development as a trader.
Of course, every person has his own perception level, that is why there is no time limit for Forex earning strategy. Only some self-assigned target can be a criterion here. For example, to increase your deposit by 50% every month for three months. For a shorter period of time it is unlikely you can really evaluate your strength and capabilities.
It is very hard for Forex novice traders to keep from realising their first successes. Self-importance can reach catastrophic proportions, the desire to open a real account and earn big money on it will outweigh common sense to stand the test period to the end and work through the detected errors.
Usually this quickness only leads to a quick loss of your own finances.
So, is it possible to win in Forex? Unlikely. But to succeed in trading, clearly - YES! But you must remember that it's not an easy task. It will take a lot of hard work, patience and discipline. There's no such thing as easy money. And everyone probably knows where the free cheese is.

Top 10 mistakes of novice traders

Traders, like all people, make mistakes. Besides, some people learn from others' mistakes and start trading more effectively, but they are, unfortunately, in minority, while others cannot learn from their own mistakes, stepping on the same rake several times.
In any case, Forex trading for beginners consists of a whole series of typical blunders that few people manage to avoid.
In this article we will formulate 10 most common mistakes made by Forex beginners. By getting acquainted with them a trader can take a more self-critical look at his work that will surely have a positive effect on the results of his trading operations. So:
Major mistakes of traders
1. Prolonging of losing positions.
All beginners close profitable trades as short as a couple of points easily and quickly for some reason, but they are ready to wait for days to modify an unprofitable position. Many traders even stop using stop-losses, allowing a losing trade to "eat" the entire deposit in some time. Limit your losses.
2. Move the stop loss following the loss.
This mistake overlaps with the first one. Often traders recklessly move their stop-loss following a losing position, hoping for a "wind of change" that will turn the market in their direction.
Forex beginners should just admit their mistake and trade according to their initial plan. A triggered stop loss will certainly spoil your mood, but the psychological mood will come back to normal much faster than with a total loss of the deposit.
3. Bilateral positions.
Placing locking positions instead of the traditional stop loss is a question that has been on the minds of traders for quite some time.
This method has its zealous supporters, as well as its equally well-reasoned opponents. On the one hand, it is psychologically easier to open a counter-order and freeze losses of the losing position, on the other hand, it is a great skill that comes to a trader only with experience.
But beginning traders think differently, rashly abandoning stop orders in favor of lock orders. Usually this type of trading does not do any good, in fact, most traders working backwards only deliberately prolongs the inevitability of losses and increases their amount.
4. Desire to win back.
Here the situation can develop in two directions. In the first case, the trader after a losing trade immediately opens another position in the market without analyzing and predicting its actions.
In the other case the trader opens a position later using a larger amount of capital violating all money-management laws.
Both of them are unfortunate. A true trader is devoid of emotion, subjecting his actions solely to cold calculation. Forex is not a casino. And to really make a profit you have to devote some time to analyzing the trading situation and instantaneous decisions will never lead to success.
5. Closing profitable positions prematurely.
The old trading rule is "let profits rise, but close losses immediately". But beginners close profitable positions too quickly, not allowing profits to increase. It turns out that total profit even from a large number of good trades made in a row may overshadow a single unlucky entry.
Necessary to wait for take profit triggering, or leave the market in accordance with the rules of his trading system, otherwise trade will be meaningless, and therefore unprofitable.
6. Lack of risk management.
Every trader is first of all obliged to save the money he/she already has, and only then to build up capital.
Profitability of a single transaction does not matter, what matters is the result at the end of the whole period (month, quarter, year). Any most successful trader can have a whole series of losing trades. You should calculate your deposit in such a way that it is possible to make 20 losing trades in a row.
7. emotional outbursts.
All beginners get highly upset with each loss and just jump with happiness after each profitable deal. You must pull yourself together, shake off all emotions. The feeling of feeling down, as well as "giddiness from success" interfere with trader's real estimation of his own forces.
8. Overconfidence in analysts.
Many traders who don't have a profitable trading strategy start listening to analytics. But not all analysts are traders, and they are not responsible for anyone's deposit. You should make decisions only by yourself.
9. Do as you want, not as you need.
Often there are situations when it seems that it is the perfect time to make a big bet. This may be due to the news or other factors. But in any case the laws of the market do not change, the laws of trading should not change either. A trader develops a trading system, but then the system and only the system guides the trader's actions.
10. Constant monitoring of price charts.
You don't have to stare at your monitor all day long. You can assess the situation on the market in just a few minutes. Moreover, long time, supposedly studying the market leads to doubts. Doubts give rise to uncertainty in your trading system, and uncertainty will always lead to mistakes.
The Forex trading algorithm is simple: open a position, wait for the order to trigger. If take profit is taken, you are in profit. You win back the stop loss, you should proceed to sort out the mistakes.
And especially there is no point in trading on minutes, mid-term forex strategies are safer. And the sooner a beginner debunks the myth about staggering profitability of intraday trading, the sooner he will succeed, and the above rules will only contribute to the success of the trade.

The traders are new. Rakes old

Day changes night, winter replaces summer. Unsuccessful applicants for fortune in Forex trading are giving way at monitors to new applicants trying to catch a moment of luck.
Unfortunately, the number of unsuccessful traders exceeds many times the number of those for whom trading on the financial market has become a successful business. One of the reasons of such situation is ignoring by novice traders of the experience of previous generations. Lack of desire to learn from others' mistakes.
Regularity of Beginner Traders Behavior Long-term observations of currency speculators turned out to be very interesting and typical pattern in behavior of most beginning traders:
Practically every beginning trader initially starts trying his or her forces in short-term trading using intraday forex strategies. They are attracted by the dynamics of the process, by the seeming simplicity of gaining quick profit. Although, as everyone knows, intraday trading is the riskiest due to rapidly changing market conditions, and trading on small time frames is the most sensitive to any market noises.
Day trading requires both academic knowledge and a balanced mental attitude. These are the very qualities that are lacking in beginner speculators. All this comes only with trading experience, and there is none. Therefore, it is better for a beginning trader to abandon illusions of fast enrichment and focus on medium-term and long-term trading, develop psychological stability and slowly gain valuable experience.
-Lack of knowledge and experience, lack of confidence in your own abilities make a beginning trader look for an "oracle" in your environment. He listens attentively to the recommendations of even more experienced, but not always successful colleagues, completely atrophying his own ability to analyze the market and make decisions.
It seems to newbies that a casual comment from their neighbour most precisely describes the market situation, while their own opinion is not worth a penny. Of course, listening to the opinion of others is not forbidden. But it must be an opinion of a recognized authority, which ultimately will help a beginner to develop and implement his own trading system. It is the work according to the system, not the unsubstantiated prediction of price behavior that distinguishes a professional trader from an amateur.
-The emotional component of trading influences trader's psychology. They do not want to admit that they made a mistake in calculations and do not hurry to close loss-making positions hoping for the situation to change for the better. Surely such behavior will lead to failure. Failure will lead to a new outburst of negative emotions and a desire for immediate revenge. And so it goes in a circle. Eliminating emotions from trading is a much more difficult task than the trading itself. Opening - closing positions is a small part of the trading system. Internal self-control is the main component of trading on Forex markets. Naturally, winning psychology comes with time.
So it turns out that there is no trader without experience, and experience, of course, is divided into positive and negative because a break-even forex strategy is an advertising ploy of internet sellers. But, knowing and analyzing the mistakes of more than one generation of predecessors, why make them again? Working on the mistakes, eliminating negative things from your practice, will only bring any novice trader closer to the heights of financial success.

Forex cross trading or walk through uncrowded trails

To begin with, let's refresh your memory on the definition of crosses.
- Forex crosses are currency pairs that do not have a dollar component.
In other words, crosses do not imply any dependence on the American dollar in forex trading.
Of course, the dollar is the world's reserve currency and will remain so for a long time. Oil is traded only in dollar prices, almost all countries for different mutual settlements use dollar equivalent, valuation of big corporations and companies is also made in US dollars. Of course, this is correct, because there should be some relative world reference point, a kind of SI system of financial matters.
Maybe, it is the wish to touch something big and great that the majority of traders choose EURUSD and GBPUSD pairs for trading at Forex, without considering earning on other market instruments. This choice narrows their horizons. Besides that, they strongly depend on news, which are quite significant for these major currency pairs. It is hardly possible to guess which way the market will go in the minutes of news publications. Of course, nobody cancelled technical analysis of forex, and all of the planned plans will work out for long-term strategies, but how many stops are closed or deposits are reaped exactly at these moments of news release.
Moreover, both EURUSD and GBPUSD are just working tools, two currency pairs. They also move according to the laws of the market, having an impulse component of movement (trend) and a correction component (flat).
Advantages of trading cross pairs on Forex
What should a trader do if there are long term corrections? Wait out of the market? Most of them start inventing entries and exits, deviating from the rules of Forex earning strategy just to be in the trade. Naturally, it all ends badly. Wouldn't it be easier to look at other instruments? Take a closer look at crosses?
The world forex statistics shows that there are still popular instruments devoid of a dollar component.
Popular Forex crosses
First of all they are pairs GBPJPY and EURJPY.
GBPJPY is certainly a "scary" cross. To pass 100-200 pips within a session is not a problem. As a disadvantage we can refer long stops, even in trading on the 5-minute charts. But, this pair has some pluses. In addition to high volatility, the instrument has the property of a "flywheel", which is difficult to get wound up at first, and then it is equally difficult to stop. If you go, you go. The trader just needs to find the direction in which this cross moves. And it would be quite sad to be on the opposite side.
In terms of calmness, EURJPY is, of course, better. It may not go so far and fast, but the dynamics of the instrument is even, analyzable and not so dependent on different news. You can easily see this by looking at the pair's chart. Only AUDJPY is "calmer" than it.
EURGBP is a little bit less popular among the traders around the world. It is also very interesting instrument with larger lot and pip size than usual currency pairs. Though, due to strong dependence on news the cross is quite "noisy. This instrument is more suitable for the mid-term trading.
And on the other hand, its "colleague" EURCHF, in my opinion, spends most of the time in the flat movement. Also NZDAUD is not very interesting, although with this instrument, though sometimes, but it is possible to work. Surely, every trader can find an interesting currency pairs for trading without the dollar component.
In my article, I do not urge traders to forego trading in Forex in exchange rates of EURUSD and GBPUSD. No. I just want to say that these pairs are just two instruments that are present in any broker's terminal. And there is no sense to refuse all of the diversity of Forex crosses, especially because all of them are absolutely free. You just need to look more deeply into trading and diversify the range of financial instruments. If a trader understands the analysis of some cross pair, this will bring him some extra income, and who can be against profit?

Trading currency pairs on forex

In forex trading practice, currency pairs are usually divided into two categories:
- "major pairs" (pairs that invariably include USD); - "crosses" (forex pairs formed without USD).
The most popular currency pairs at Forex market are EURUSD, GBPUSD, AUDUSD, NZDUSD, USDCAD, USDCHF and USDJPY.
Best currency pairs for forex trading
Of course, the most popular currency pairs for forex trading are the currency pairs belonging to the 'major' category. It should be noted that this popularity has obvious reasons.
Firstly, it is due to the popularity of USD as a world currency, which performs at least two key functions in the system of global finance:
- the currency of international transactions (settlements); - the currency of international reserves.
Secondly, major pairs are the most attractive for Forex speculators exactly in the market aspect for currency exchange transactions. Trading in major currency pairs at Forex is almost always accompanied by high liquidity. It has the highest turnover and business activity, which is very important for a variety of trading sessions which take place in the currency market as the respective time zones alternate.
Multinational companies, Central Banks, and other major financial institutions are constantly exchanging currencies. It is natural that a European currency, for example, will be more in demand by some Central Bank than the Ethiopian Rand.
While brokers allow about 170 various assets for forex pairs trading, about 80% of the trading volume is traded on the "Majors" - the seven major currency pairs
Thirdly, the major currency pairs are considered to be the most convenient for fundamental analysis. There are a lot of significant events and news, and factors connected with US economy are in the focus of attention.
Fourthly, as practice shows major currency pairs are reliable tools in forex trading for beginners as they are ideal for traders who are not yet very experienced and allow them to combine aspects of fundamental and technical analysis in practice.

Trading forex by volumes

Application of market deal volumes at Forex for forecasting of price behavior became popular only few years ago. The problem is that in the foreign exchange market no indicator will show your real traded volumes, much less open trades.
Forex simply does not have such volumes, because it is an over-the-counter market with no clearly defined trading venues, where there is not even the technical capability to collect such information. Traditional Forex volume indicators for MT4 usually show tick volume, i.e. the amount of transactions per unit time, and no one knows how much money is behind these transactions and whether they are in real life.
About 5-6 years ago it became possible to receive for a fee the information from major exchanges about volumes of futures - currency, commodities, indices - traded on them, which allows at least indirectly assess the influence of volumes on the market movement at Forex.
Of course, even now such data is not available to all, the information on each instrument is paid separately or it is suggested to open a real account, say, on CME (Chicago), perform on it a minimum volume of trading and then it is possible to receive in your terminal the flow of information about real volumes. Entry level to such an exchange platform starts at 5000 c.u., so not every beginning speculator can afford to trade on Forex volumes. Moreover, different software is required for processing such data.
Traders are offered either the most complete information on a particular exchange, or averaged information on all major trading floors. The volume data allows the size of the open and already recorded trades at a particular price level to be seen in a real stock ticker. But do not forget that the exchange trades are futures counterparts of forex instruments, and a special technique is required for the correct analysis of incoming signals.
Forex trading by volume provides insight into the activity of players in the market. If there is a large trading volume, then you can be sure that there is a big player on the market, and the market will react to his interest by a sharp break or a complete reversal of the trend.
If the volumes are small, there are no big operators and serious changes should not be expected, regardless of whether the market is in flat or a trend is present.
The volumes of trades traded also reflect the interest in certain price levels. Even a significant price movement on "thin" volume does not deserve as much attention as even a small price bump on high volume.
- Trading volume is always ahead of price because it shapes it, and divergence of volume and price indicates an imminent trend reversal.
Basic rules of forex volume trading
At the beginning of the trading session, orders accumulated by brokers overnight are executed, as well as volumes ordered by "willy-nilly" traders - importers/exporters, banks and others. This process is what ensures high volumes. The decline goes to the middle of the session, at the end of the trading session speculators form the closing prices of the market by entering into a large number of contracts.
The chart on the spot market has a shape opposite to the stock market, with the peak at 11 a.m. to 2 p.m. of the European time.
A decrease in volume signals a decrease in trading interest in this direction, which will give either a trend reversal or a flat.
Increasing volumes indicate growing interest from market participants in the current trend, which should lead, again, either to a trend reversal or strengthening of the existing trend.
If we observe the decrease of trading volumes with the sharp change of price, it means the capitulation of the players of one side of the market and waiting for the turning of the trend.
It is worthwhile to keep an eye on the volumes at lunchtime and at night, when the main trading floors (London, Frankfurt, Paris) are closed. During this time, the market is poorly predictable and small amounts lead to serious fluctuations. Big trading risks usually come at the opening of the American session - an aggressive break in the trend formed during the European session is possible, if the current state does not suit the big players.
Both price and volume dynamics are influenced by seasonal factor - expiry dates of futures and large options, end of financial and calendar year, major news releases.
The price level where there was high volume recently is particularly significant; it will later become a key support/resistance area.
Volume analysis on forex allows you to get a real picture of the balance of power between buyers and sellers and make the market closer and friendlier!

Trading Forex from scratch

Many people know that Forex is an international market, where currency is bought and sold, where currency exchange happens around the clock. But many of us do not even realize that trading Forex without investing your own capital is real!!!
Most people think that in order to start trading forex you need an impressive amount of money to get started, but you don't! There are ways to start Forex trading from scratch without spending a single penny.
However, to get started you will require some basic knowledge.
To Learn the Basics of Forex Trading
You don't have to jump right in with a bang, but start with the basics. Study and analyse the literature on Forex. There is a lot of information on the Internet, watch the video on youtube on the theme of "Forex trading from scratch".
You need to choose a broker.
You have already mastered all the theory, the techniques, then you need to choose a Forex broker.
So, a Forex broker, or brokerage companies, are those companies which are intermediaries between the market and the clients. In other words, they provide access to trade in the international foreign exchange market.
Absolutely all trades of all traders come through an intermediary - a broker, without it you cannot trade. A good brokerage company has to have a license to work on the market.
So, what you should pay attention to when choosing a broker.
The most important thing is that it should be reliable because there are cases when you might get cheated and abscond with your money in an unknown direction, so the first thing to do when getting acquainted with a broker is to check the special license, its validity period as well as look through the customer reviews.
You should take into account the percentage of commission set by the broker for its services.
Convenience and quality of the platform. It is important to have an easy and understandable interface of the trading terminal, free use, understandable charts, availability of news.
Open a forex trading demo account
When trading forex for beginners the most important thing is not to risk personal money. You may start by simply opening a practice forex trading demo account, which is no different from a real one. Then you have to try trading, as if to check your system, make adjustments, if necessary, make sure you have selected the right broker. It is easy to open such an account and it is absolutely free.
Improve your trading strategy
You should not start trading forex without a proper trading strategy. You should start by learning at least a couple of strategies.
All strategies can be divided into types:
Long-term (a couple of weeks to a couple of months). Medium-term (a few days or even weeks). Short-term (from a few hours to several days). Scalping (up to two hours). Pipsing (from one to five minutes).
Necessary to open a real account.
Opening of a real account is a serious event for many beginning traders. When trading with real money you start to feel nervous and worried about your hard-earned money, so be prepared to realize that trading with real money, as opposed to the demo version, may not give you the desired result straight away, even though the trading strategy is the same. Don't get upset, it happens to all beginners; psychology is the main thing in Forex trading.
Trading Forex without any investment
There are ways to earn on the currency exchange without any investments of your own capital:
Affiliate programs are one of the most popular ways to earn money on Forex without any investment. It works like this: you have to register on a brokerage company's website and attract new clients, and when they start trading you will receive your income as a fixed rate or in the form of interest. Then you can start your Forex trading without any investment or you can simply withdraw your funds in a convenient way - become a partner of a brokerage company
There is a method of earning money by participating in different competitions. This way you can earn substantial funds without worrying about your own capital. The idea is that you can compete with other participants in trading efficiency and the one who is the best is the winner. The amount of reward for the victory in the traders' contest may reach tens of thousands of dollars.
No deposit account. Sometimes brokerage companies organize campaigns and provide the so-called welcome-bonus to all traders who have opened an account at the moment. There will be a minimum amount of money on it that cannot be withdrawn without executing a certain number of lots. The advantage for you is that you can gain experience in the Forex market and hone your skills in real trading. If you succeed, you will be able to withdraw your earnings from your account.
Special forums. You will be rewarded for every post you make: the more such posts you make, the higher your earnings.
So, trading Forex without investing your own capital is quite possible. To succeed, you need to carefully learn all the strategies and refine your trading techniques, because Forex is a great place to make some serious capital in a variety of ways.

Trading Forex on the news

Forex news trading is one of the most popular trading strategies on the currency market. Its peculiarity is that fundamental analysis is used as a basis for making decisions about entering into transactions. The simplest version of news trading involves concluding deals prior to the release of important economic news.
Is trading the news the life of risky traders?
It would be wrong to consider forex trading on the news as a separate trading strategy, because this group of strategies, despite the common "ideological platform" can be quite different from each other. The main thing a trader who wants to check his theoretical knowledge about trading on the news should pay attention to is ambiguity of trading signals coming from fundamental analysis indicators.
Technical indicators also produce false positives, but everything is much more complicated in "news trading".
Firstly, not all currency pairs are affected by macroeconomic indicators. Yes, the change of interest rates will have an effect on a currency rate, but if it is going to be, for example, the Australian dollar, then when forecasting its value it will be necessary to keep a close eye on the situation on the world gold market, irrespective of any events in the Australian economy. The commodity currencies of which the 'osie' is representative are not as macro-economically exposed as the high-tech currencies (USD, EUR, JPY, GBP and others).
But that is not all, the same news can have different influence on one and the same trading instrument. This means that a trader has to consider a large number of factors, not all of which can be interpreted unambiguously.
Peculiarities of the fundamental analysis in trading on the news
The classical procedure of market forecasting using fundamental analysis tools includes the following steps:
- Analysis of political and economic situation; - Forecasting of the contents of the coming news and options of market reaction to this news; - calculation of expectations of direct competitors; - Calculation of possible variants of their behavior.
For the vast majority of speculators this approach to predicting trades seems too complicated, so in short-term trading the release of important news signals the start of a "drive".
While waiting for the news, without bothering with analytical calculations traders place differently directed orders. Such "news strategy" also has the right to live, but there is one peculiarity of this method - before the news releases the instrument price moves in a narrow corridor, but there is a high probability that after the pending order triggers the price will move in the opposite direction, easily breaking through the corridor walls. This "phenomenon" is explained simply - the traders who placed orders in the "opposite direction" have triggered stop-losses.

Trading forex through a bank

These days, currency trading at Forex is available to everyone. A great number of people come to this market every day and try their hand at currency speculation.
However, not many people think about how money enters the market, where it is kept and what happens during trading. Traders are mostly concerned about fast and easy entry and exit of their funds, transparent trading conditions, informational and technical support.
The minimum deposit amount and the possibility of working on cent accounts are also important for beginners in Forex trading.
No one can trade on Forex market by him/herself. For that there are intermediaries. The choice of such intermediary is very important for daily work of trader. The Internet is full of advertisements of various organizations, which offer the most favorable conditions for access to the Forex market. It is quite difficult for a person, who has decided to trade on the currency market, to make sense of all these offers. How to do it and which intermediary to choose? What are brokers and bank brokers in particular? You need to have an understanding of how things work.
Participants of the Forex market
- The Forex market is a generalised concept. Actually, trading takes place on the world stock exchanges, where contracts for selling currencies are put out and bids are made to buy.
The minimum volume of a contract is 5 million dollars. Only licensed participants are allowed to trade on stock exchanges. Participants on stock exchanges include central banks, commercial banks, large international companies, large brokerage firms and various investment funds. Each of these participants has its own purposes in the international exchange market. We will focus on the purposes and role of brokerage companies.
A broker is an intermediary who enters into exchange deals on behalf of his clients. He receives a commission percentage of the transaction amount. There are two main types of brokers in the Forex market. They are brokerage companies and bank brokers. The difference is that brokerage firms keep their funds in the accounts of commercial banks, while bank brokers operate with their own capital.
Financial institutions with direct access to stock exchange trading are called prime brokers. The clients of prime brokers are the various brokerage companies in which most of the ordinary traders trade. Basically, these brokers operate on an aggregate position basis. They collect buy and sell orders and then sell or buy the difference from the prime broker. The prime broker, in turn, collects a pool of such bids and enters into a contract on the exchange. This is, of course, a simplified scheme. Brokers can open accounts with each other, with broker banks, etc. For example, ECN technology has recently become widespread. An electronic communication system connects traders and prime brokers directly. However, again, prime brokers provide access to this system.
All the brokerage companies have different working methods and terms of access to the Forex market. The main difference between them is licensing and regulation of the activity by national and international regulators. The task of a beginning trader is to choose a broker according to his knowledge, abilities and desires.
There are many unlicensed brokerage companies and dealing centres where it is very easy to open an account. Deposit replenishment with such brokers is possible through different electronic payment systems, where everything is also very fast. However, it is not recommended to risk much money with such brokers. And more experienced traders try to trade at Forex through the bank.
Forex trading via the bank
For traders operating with big sums it is more preferable to trade at Forex via banks. Who are the bank brokers? They are banks, which partially or fully participate in the currency exchange business and which provide market access services to individuals.
Importantly, any banking activity involves government licensing and regulation. Traders become clients of a bank and receive appropriate protection for their money. You can only trade through a bank by opening a nominee account with the bank. Such accounts are insured by the law of the country where they are registered.
Apart from guaranties of safety of money, trader gets more reliable access to the market, which is reflected in low commissions, quick execution of deals, and accuracy of quotations. In case of conflict situations, issues are resolved quickly and fairly, as banks value their reputation.

Trading on Forex with a minimum deposit - from initial losses to sustained profits

How much money do I need to trade on Forex?
When it comes to Forex trading many people think that a deposit to work at this exchange market has to be big. Well, to a certain extent such opinion may be considered fair.
Indeed, it is rather difficult to count on serious earnings without big money invested to trade at Forex. But this is mostly true for traders who are experienced enough to maintain stable and profitable trading. But what a beginner should do, because to become a professional you have to go through certain establishing stages?
Many brokerage companies cooperate with beginners and offer them an opportunity to open a cent account.
- The minimum amount to trade forex on such an account is just a few dollars or even one, and you can use it to work on the financial market.
Unfortunately, not all traders take full advantage of such opportunities.
How do beginner traders often trade on the market?
Very often, and this is proved by many researches, people starting to trade on Forex are not inclined to take the process of education seriously so that they could achieve a high professional level.
As practice shows most of the newbies are rather big-money hunters. In most cases, they either try to accelerate their deposits or rely on some super profitable Expert Advisors that can be downloaded for free. Actually, there's nothing to be surprised about, as almost every Internet advertisement runs on the black and white saying that one can earn $50-100 per day in the Forex market almost on autopilot, and the deposit size on the account will steadily grow.
Of course, not many people would refuse to earn hundred dollars a day easy, and even in online mode. And so a beginner, being fully confident in his actions, opens a trading account, puts $100 to $200 on it, and then runs the "wonder-advisor" in the hope that it will bring material prosperity.
It may happen so that at first the initial deposit slightly grows, but then, if a drawdown appears on the account, the beginner is not able to change something, because of the lack of knowledge in trading and the algorithm of the advisor work.
How does it all usually end? Probably nine out of ten beginners who lost their money that way can answer this question. Similar results can be expected by those desperate traders who from their first steps in the market try to increase their deposit but do it haphazardly and inefficiently.
What should be the minimum amount for Forex trading?
At the initial stage it often happens that a trader loses the money deposited into his trading account. It may happen more than once. It cannot be ruled out that a trader loses the second or even the third deposit. Unfortunately, it is reality and has to be reckoned with. That is why every beginning trader should remember one simple truth:
The first deposit to the trading account should be such that in case of losing this money it does not affect the general financial well-being of the person, does not cause psychological trauma, does not deprive him/her of confidence and desire to trade in the financial market in future.
As for the amount of deposit for beginners, it may be different, and it is difficult to name a concrete figure. After all, the loss of ten dollars is undesirable for someone, while someone trading currency on Forex may lose a hundred or more dollars without feeling it. The main thing is not to strive for immediate making big money by trading on Forex, you should do it gradually, finding the optimal size of deposit which will help you to feel comfortable in difficult market conditions.
How scared are you of losing your first deposit?
Often beginners perceive losing their deposits rather painfully. Such a loss may make a trader disappointed in trading and doubtful that it is possible to make any profit on Forex.
But if one looks at the situation sensibly, without emotions, it becomes apparent that the loss of money occurred primarily due to mistakes made by the trader. The main thing in such situation is not to overreact and look into the reasons of losses to draw conclusions and not to repeat such mistakes in future. After all, the sooner forex trader understands that every loss of money in Forex trading is a payment for his own mistakes, the sooner he can reach the level when there are fewer mistakes and the profit is much higher.
Thus, we can say that the currency market is not a place for fast enrichment. You have to approach trading thoughtfully, and sometimes even philosophically. And the philosophical side of the matter is that regardless of the size of the deposit, its loss shall, first of all, make the trader to think, draw conclusions, in the end, decide whether it is the right thing to do or not. And if the answer to the last question is affirmative, the first losses, no matter how unpleasant they are, must become a powerful incentive for further success in market trading.

Forex trading without indicators

There are a lot of different methods to analyse price movements on Forex. The most common is technical analysis based on indicators. However, the main disadvantage of this type of analysis is lagging of indicators relatively to the current price.
As traders gain experience they start to understand that they should not rely solely on the indicator readings. You can understand market trends by price movements around significant levels, within channels and ranges, by candlestick patterns, and by market volatility.
There are traders who do not use indicators in trading. Some of them trade on fundamental analysis.
Varieties of trading without indicators
There are several ways of Forex trading without indicators. These may be wave analysis, candlestick analysis, use of non-standard Renko or tic-tac-toe charts, analysis of graphical figures and patterns.
All such strategies have a common name "Price Action", i.e. the action or behaviour of the price.
Wave analysis is based on the patterns of price movements, which are based on the behaviour of buyers and sellers in the markets. An experienced wave trader determines by the number of waves where to open a position to get to the beginning of the movement.
Candlestick analysis involves determining the direction, reversal, and continuation of a trend using typical combinations of candlestick patterns. Such strategies are particularly numerous. Often the trading system involves action after the appearance of a certain candle like a Pinbar or Harami.
Renco charts make it easy to identify trends on different timeframes without the need for indicators. All traders are familiar with the chart patterns head and shoulders, flags, triangles and other combinations. They are quite often repeated and provide an opportunity to open positions at the most profitable levels. For example, once a head and shoulders pattern is formed, the price almost always reverses, while a triangle pattern most often breaks in the direction of the previous movement.
A large group of forex trading strategies without indicators is based on breaking through channels and ranges. If, for example, in an uptrend channel, the lower boundary is broken through, the price is likely to go down. When the price has been moving in a narrow range for several days, then a big amount of orders is accumulated on its borders, which are triggered by the breakdown, and the price gets a strong impulse.
This is the principle upon which the most popular trading strategy of opening of the London session works. Usually, before the opening of the London exchange, the price moves in a narrow range. After the opening, there is a flow of orders, which determine the movement in the next few hours.
The forex news trading strategy is also based on the concept of price behavior. The price charts clearly show how the range narrows before the release of important economic news, and how the sharp movement immediately afterwards occurs. The famous carry trade strategy is based on the difference in different interest rates of central banks of different countries, so no indicators are needed.
So it is possible to trade at Forex without indicators and there are quite profitable strategies for that. Of course for wave and candlestick analysis you need to gain experience, but breakthrough systems are available for newbies as well.

Forex trading strategies: connection of times

The most important task of technical analysis of Forex market is to determine a trader's direction of price movement of a chosen currency pair in a certain time interval. And the binding of the movement to the time is the main guarantee of successful trading.
Before opening a position, the trader should firmly know exactly in what time frame he will work. Flat on the charts of large TF does not mean there is no trend on small time intervals. There is practically always movement on Forex market and the main thing is to benefit from it.
At the same time, a pronounced, for example, "bearish" direction of a currency pair on a 15-minute or hourly chart may not be confirmed by the general direction of the price movement on a 4-hour or daily timeframe. This does not mean you cannot trade against the trend of the older charts, but it does mean you should work with the position at the time format in which the selected movement occurs. After all, any trend on small time intervals, can be simply a trivial correction of the global movement, which lasts for months, which can be clearly seen and work on the charts of large TF.
Actually Forex trading can be classified into three types of trading strategies:
- short-term. Forex trading on small time frame charts is attractive to a large portion of traders. The quick dynamics of price fluctuations, short stops and desire to be in the market allure newbies to this strategy. Unfortunately, only later they start to realize the fact that this Forex trading strategy requires a lot of nerve stress and experience. One can even formulate a certain forex rule whose meaning is that the more experienced a trader is, the less permissible interval of his/her operation TF is. But all this is understood with years and experienced traders do not always try to trade in short term mode avoiding excessive "noisiness" of the market in favor of more stable time intervals. M1, M5 and M15 are used as working charts in the short-term Forex strategies. M15 - H4 charts are used for the analysis.
- medium-term. Trading by this strategy is carried out on the H1 and H4 charts. A relatively small size of stops, almost the complete absence of different noises, makes this strategy very attractive for the work of Forex traders. Positions, when working with a medium-term strategy, are held for several days to several weeks, which by itself does not require constant monitoring of the trading situation. Mid-term trading enables the trader to plan entries and exits without any fuss and nervousness, placing remote orders. Naturally, the slowness in making decisions allows the trader to monitor a large number of trading instruments. The analysis for forex trading in the medium-term strategy is carried out on charts H4, daily and even weekly.
- long term. This strategy is more suitable for investors or traders with a pretty decent deposit size, and implies the work in the position up to several months. The work here is most often carried out by the forex trading strategies for the daily charts, and analyzed the weekly and monthly periods.
By choosing a Forex strategy, a trader does not mean that he/she always becomes a supporter of certain timeframes and an ardent opponent of others. Forex activity requires flexibility from the trader, because working with a medium-term strategy does not imply rejection of short-term positions. But, this flexibility comes only with trading experience. In any case, to be successful the player is required to fully understand the time frame in which he will carry out his transaction.
It is understanding what is happening in time that allows a thoughtful forex trader to succeed, while aimlessly jumping from one time frame to another will sooner or later lead to a fatal outcome for the deposit, where even the most ingenious forex strategy will not help.

Types of currency trading in time frames

There are several time frames in trading which distinguish the types of trading operations. Each of these types has its own peculiarities in using of analytics, trading process, making of orders. But besides technical aspects there are factors that depend on personal traits of a trader in every separate case. And it is necessary to admit that not everyone will be able to trade on all timeframes.
Practice has shown that a trader who has found the optimal variant of the trading strategy in managing the deposit on long timeframes is sure to fail when trying to work on short timeframes and, sometimes, in scalping.
The subtleties of short-term trading Such tendency is caused by the fact that when trading short-term trading, one has to possess completely different qualities - calmness, absence of excitement, excellent reaction to market events and some others. Besides, in this type of trading it is necessary to be able to make instant decisions, based on market situation changes. And this decision must be economically or technically justified. Therefore, it is necessary to detect the reversal points and enter the tail end of the trend, ignoring minor price fluctuations.
The difference of long-term trading Long-term trading on Forex market has its own peculiarities as well. Here you need to be able to conduct a thorough analysis. While for intraday trading the technical analysis indicators, indicators and oscillators signals are very important, for trading in timeframes of 4 hours and more, you should learn to use the fundamental analysis readings. Studying economic indicators and news feeds is also a must for successful long-term trading.
However, technical analysis should not be neglected. Regarding the trader's condition during such trading, it should be noted that calmness, rationality, and attentiveness are necessary. Besides, it requires good judgment and thinking outside the box, as many economic factors should be taken into account while analyzing indicator readings.
General trading principles But no matter how different the types of time-trading are, they all have something in common that is important for any successful trading. They all lie in four basic principles of currency trading.
First, an attempt should be made to minimize all possible risks - this is called minimizing financial risks.
The second mandatory factor is trading strictly following the trend. What is meant here is an irresistible desire of some traders to trade in a corrective wave. Quite often it brings good results especially on long timeframes and there are even special counter-trend strategies. But more often such trading ends up in the loss of the deposit, especially in short-term trading.
The third condition for successful trading is the ability to manage the risks. It concerns the sufficient volume of deposit into trading operation, use of leverage in margin trading, actions for losses localization. Overconfidence will only lead to the destruction of funds on the deposit, while competently placed stop-loss will save most of the funds and allow you to make up for lost time in the next transaction.
And the last point on this list is unconditional use of your trading strategy. You should never experiment while trading on real accounts.

What is the difference between CFDs and currency pairs trading?

Before you start trading, you need to be clear about the direction you want to take. For those who prefer aggressive forex trading CFDs are fine. Conservative traders prefer to trade currency pairs.
Contrary to the common opinion Forex market gives traders an opportunity to trade not only currency pairs but also a great variety of different instruments. These are precious metals, oil, stock indices and company stocks.
The possibility of trading these assets is provided by contracts for difference (CFD).
Here the trader must clearly understand that, despite the fact that all these instruments are included together with currency pairs in a single trading platform, they have different specifics.
The main difference between CFD and currency pairs
The main difference between CFDs and currency pairs is that CFDs are similar to futures. Trading in CFDs is also carried out using leverage, only if traders in currency pairs can use the ratio of 1:200, 1:500 or even 1:1000, in CFDs this ratio will rarely exceed 1:50, which is a completely different money management and profit calculation.
Secondly, trading CFDs and currency pairs differs in fundamental factors necessary for market analysis. In technical analysis, as we know, there are no differences between assets. Whether it is EUR/USD or Google Stocks, chart patterns or candlestick patterns will appear in the same way on the charts. And it is different in case of a fundamental analysis, where only a certain layer of statistical information will affect the dynamics of an instrument.
For example, if trader trades on the stock index Dow Jones or NASDAQ, he will first of all be interested in the national economic indicators, in this case the USA, to assess the prospects of each component of the overall index.
CFD on oil will depend on the supply and demand ratio in the market, decisions of OPEC, the dollar rate (with all the ensuing ramifications) and the performance of the world economy, as well as the main consumers of "black gold", primarily China.
Working with CFD on shares implies an in-depth study of the selected companies, their financial and economic situation and development plans.
Trading pairs on the forex market is certainly easier and clearer, because there is no need for an extended set of fundamental indicators and transactions can be made on the basis of the usual economic calendar.
The third difference between CFDs and currency pairs is the volatility of the instruments. It is believed that CFDs react more actively to fundamental changes. The issue of volatility is very important for speculative traders. The greater the amplitude of the movement, the more profit they can make. As far as CFDs are concerned, intraday forex strategies are popular among traders.
Finally, CFD trading is usually based on trading hours of stock exchanges, whereas forex trading is available 24 hours a day.
The similarity between CFDs and forex assets
Nevertheless, trading currency pairs and CFDs is very similar. Both are included in the same forex trading platform, are suitable for speculative trading, lend themselves to fundamental and technical analysis, have spreads and are margin trading instruments.
Which to choose: CFD or currency pairs?
To make a choice a trader should define his preferences to trading types and rationally estimate the equity of his deposit.
If he takes volatility bursts calmly enough, and the size of the deposit allows using smaller leverage, it will be advisable to work with CFDs. If the deposit is not large enough, then trading in currency pairs will be better suited.
CFDs will also suit traders working with shares of companies. However, when working with foreign securities, a possible language barrier should be taken into consideration, because news, reviews and analytics are published on English-language resources.
Nowadays traders can trade both in one terminal, but money management is very important. Using in trading both high-speed CFDs and smooth currency pairs, the trader makes trading versatile and does not depend on only one direction of fundamental analysis. If, for example, the stock market fails, trades on EUR/USD or GBP/JPY may help. But this approach requires a certain amount of experience and knowledge.

What is Forex and how does it work? How does a trader make money?

What is Forex and how does it work? The Internet has opened up a lot of new and exciting opportunities for the mankind. One of them is free currency trading in online regime, which may be united under a single term "FOREX market".
For reference. The abbreviation FOREX is derived from the English expression "FOReign EXchange" - foreign exchange. Originally Forex was an inter-bank currency exchange market, but with time private investors gained access to it. Since then, its turnover has been growing and has reached several trillion dollars per day (!).
Unlike traditional stock exchanges, the Forex Market operates 24 hours 5 days a week, because trading takes place worldwide. During the day, the financial centres are Wellington, Tokyo, Hong Kong, Frankfurt, New York, and of course, London - accounting for approximately 30% of all foreign exchange market turnover. For this reason, the trading day for traders is divided into 4 sessions (GMT time):
- Pacific (22:00 - 06:00) - Asian (00:00 - 08:00) - European (07:00 - 16:00) - American (12:00 - 20:00)
During the European session, the Euro and GBP are actively traded, while during the American session, the USD is actively traded. It is worth mentioning that currency pairs are traded on Forex, which are denoted by six-letter names. For example EURUSD is the currency pair EUR-USD.
When you open a "buy" on EURUSD, you are buying euros for dollars, and at the close of the transaction you make the opposite operation - exchange previously bought euros back into dollars. When you sell, it is vice versa.
How do you make money on the currency market? By making money on differences in exchange rates, just like banks and street currency exchangers do. The only difference is that the rate is not fixed, it "swims" depending on the price of the hundreds and thousands of transactions, which are carried out at the currency market every second.
The trader's task is to understand which way the price will move in the future and, accordingly, to buy or sell a currency pair. Usually, there is no psychic at hand, so we have to use other methods, which may be grouped into two groups:
- Fundamental analysis - studying macroeconomic indicators and news. The general rule is that if the news is good, it will strengthen the currency rate against others, and vice versa. - Technical analysis - mathematical methods of price forecasting, which are based on the fact that market participants act in repetitive patterns. A prime example is the massive selling of currencies after a prolonged bullish trend.
How to earn on Forex? Becoming a Forex trader is very simple - all you have to do is to download Metatrader trading terminal from a reliable broker and open a trading account or a training demo account with a virtual currency.
The more important question is how to become a successful trader? As in any other business, you will need time to train and gain experience. It is advisable to take a training course in trading. The main thing is to be patient and not to use much money until you are sure of your abilities.
All the best and success in Forex trading!

What is Forex and how you can make money on it

The ideal of the free man travelling around the world with a good income is not only popular with IT professionals. Many people would like to have a stable income and the opportunity to earn from anywhere in the world where the Internet is available.
It is quite realistic to realize this dream by Forex trading. In this article we will dwell on the opportunities of the Forex market.
How did the Forex market emerge and why is it profitable?
The decision to freely convert currencies, which was made by the leaders of economically developed countries over forty years ago, laid the foundation for the formation of the currency exchange market. The abolition of the strict binding of national currencies to gold has benefited not only the global economy, but also millions of people making money on the Forex exchange market. The name is derived from the English Foreign Exchange.
When foreign exchange rates are set free, the value of national monetary units is determined by the free market on the basis of a supply and demand relationship. In a market currency becomes a commodity; you can buy it cheaper and sell it more expensively, like any other commodity, and make money at the same time.
Currency as a commodity has a number of undeniable advantages:
- it does not require warehouses with expensive rents;
- it can be traded on the Internet directly from home or any other location;
- organisation of the business does not require large investments, as at the start of any other business;
- Currency trading does not require special economic education.
Experts consider the foreign exchange market to be one of the most liquid markets. This means a simple fact: currency as a commodity can always be bought and sold. In the huge global market thousands of transactions are being made at the same time. The daily volume of forex trading today exceeds 3 trillion US dollars. So, how can a common person make money on it?
How does Forex work?
The international currency market is a number of large financial centres located in Europe, America and Asia, which interact with each other. The system generally operates around the clock due to time zone differences in London, New York and Tokyo, where the major centres are located.
Transactions in the foreign exchange market are done via computer terminals and electronic trading systems. Thanks to this, Forex is widely available to everyone who wants to get involved in currency trading.
The main participants of currency trading are banks, professional and state-owned traders, as well as major investors. They conduct the larger volume of transactions, have a major impact on the movement of currencies and shape the pricing policy on the market.
Historically, the goods in Forex are not a single national currency, but currency pairs. The most popular currency pairs among traders are Euro-Dollar, GBP-USD, USD-Swiss franc and USD-Yen. They are characterised by high price movement, which allows you to earn good money on buying and selling.
How Do Individual Traders Earn in Forex?
One specific feature of Forex trading for individual traders is that they trade through a broker. The importance of this intermediary is difficult to overestimate. Exactly broker provides trader the sum, required for entering the currency market, which is also called "leverage".
For example, using 1:100 leverage an individual trader can enter the market with a personal sum of 1000 Euros to make a deal of 100,000 Euros. The earnings from the transaction remain with the trader and the leverage amount is returned to the broker. It is a principle of margin trading, which allows individual traders to earn on Forex with relatively small amount of money.
So where do you start as a trader? The answer is obvious: You should start by registering on a broker's website. It is important to choose a brokerage company responsibly and seriously as the success of the whole affair depends on it. Firstly, you should familiarize yourself with the trading conditions of the company. Secondly, it is necessary to read reviews of the clients of the broker to avoid meeting with fraudsters.
Beginners can be advised to register with those brokers, who provide free demo trading platform, mini forex accounts, qualitative training materials, webinars, video lessons on the subject of trading. Mastering a new profession will require both personal efforts and professional information from professionals. It is important that the brokerage company is reliable and trustworthy.

What signals exist and where to get them

Most traders deal with signals when they get acquainted with indicators. When we speak about the first ones, we mean a particular indicator, which "analyses" the market and informs about the most opportune moment to buy/sell an option.
How to find the right indicator?
Experienced traders advise to work the old-fashioned way and to use the mechanical indicators, which are well-known and tested by many people. You can find them on different portals (including foreign ones), websites, groups, etc. Often, indicators with signals are presented as a live chart, you can choose the most suitable option from the list provided.
You can use the following to receive signals:
technical indicators; Moving averages, including the popular Stochastic; Market reversal points on the change of a steady trend; Analysis of currency pair behavior based on technical data; classical graphical models.
Where to begin?
Moving averages are ideal for beginners who wish to master the intricacies of financial markets. They are suitable for intraday trading and show price charts with smooth jumps and drops. To understand the trend direction and its dynamics in short-term trading, you should go to a longer chart (for example 1 hour), where everything will be visible. Moving averages are a great combination with technical indicators. You can buy or sell an option when both the chart and the binary options signals predict the same situation. If the signal contradicts the overall picture, then you should not pay attention to it.
Signals based on graphical patterns are also good for beginners. Classical graphical models clearly demonstrate price behavior, and professional traders are often limited to such "helpers". Moreover, the trading platform Metatrader allows you to install the most convenient indicators for working with charts and identifying signals.
Separately, it is worth mentioning the signals provided by economic calendar. They give you important hints how to behave a trader on the market during news releases. Such signals cooperate with graphical models perfectly, whereas moving averages can confuse a beginner as they will smooth out the slight price changes.
Automated signals which are not based on indicators, but on a certain technical analysis algorithm have also become popular. This means that the trader will not understand what exactly a signal is based on, so he will not be able to assess its credibility. Such "tips" are often used by people who do not want to learn the basics of trading, but expect an easy profit. In most cases they incur losses. But such algorithms are developing and, who knows, they may soon reach the level of artificial intelligence.

Which broker to choose for forex trading?

Forex trading is becoming more and more popular every day. And it is not surprising, because you can make good money trading at the exchange market from the comfort of your home.
Unfortunately, in any area where good money circulates, there are always cheaters. The Forex market is no exception. With increasing popularity of electronic trading at the exchange, brokerage centres and brokers, who offer their services to traders, appeared like mushrooms after the rain. Not all brokerage companies fulfill their obligations in good faith, so you can easily lose your funds. Right now let's try to answer the question: "Which broker to choose for trading at Forex?" and let's analyze the most important moments you should pay attention to before you open a trading account with any company.
How to choose a "right" forex broker?
- Pay attention to the broker's reputation, how long it works, read reviews on the Internet at various forex forums. As a rule if the broker has an unfair reputation, the Internet community reacts with negative feedbacks.
- A reliable broker always has a regulator and a license. That is why, when choosing, you should find out who regulates the company and whether it has a license for rendering brokerage services. All this information can usually be found on the broker's website.
- An important point is the support service because different situations may arise which need to be resolved very quickly. A reliable company always has a staff of consultants ready round the clock to solve any problem.
- Choosing a broker, you should pay attention to the trading conditions: what types of accounts are available, the amount of leverage, spread, what commission the company charges for its services, swap. Take leverage, for instance. Many firms now offer their customers to open accounts with 1:1000 leverage, which is a lot, but it is acceptable and you can comfortably trade under such conditions. If you are offered to open an account with leverage 1:2000 and more, you should think over the reliability of the broker, because higher leverage adds risk, which brokers prefer not to mention. All the terms can also be found on the broker's website.
- Withdrawal time. A conscientious company always pays the earned profit on time. There are brokers where the money is withdrawn in a few minutes but most brokers withdraw the money from one hour to several days.
- Traders work on the trading platform, so it is important to pay attention to the software. You can start by opening a demo account and use it to trade: you can check how fast the orders trigger, whether the pending orders work, whether there is no slippage, whether the terminal freezes. But you should know that unscrupulous brokers have very different conditions of trading in demo and real accounts.
As you can see from all written above the choice of a broker for forex trading plays an important role because one can make money on the currency market only with the help of a reliable broker, and of course with experience and knowledge, but that is a separate subject.

Why do we need robots for Forex trading?

The main thing a robot has to deal with is trading without the trader, who often can't be in the right place at the right time, whereas a robot is always on the alert.
Of course, you can't discount the psychological component either. The robot will relieve traders of stressful workloads, because even the best professionals in currency trading are not immune to mistakes. A person can be tired, sleepless or ill.
Statistics show that about 80% of forex trading is done by robots and the trend is continuing in favour of automated trading. But of course before using trading robots traders need to understand their functionality, be familiar with the principles of the system, be able to make necessary settings and keep track of statistics.
So, what are the functions of a forex trading robot?
- Constant monitoring of selected trading tools; - instant processing of a large array of input data; - automatic trading without a trader within a strict algorithm trading strategy. It is no secret that a good robot can trade better than a trader, especially in a saturated news environment. To accept information, process data and make a decision about entering or closing a position, a robot will need a couple of seconds, while a human can hardly find his or her way around during this time.
Depending on robot's algorithm, we can mention the most popular trading systems:
- Trend - the most popular robots, which determine the entry point in the direction of the current trend and close the transaction when signals of a change in direction are received:
- Working on the principle of Martingale - also quite popular among traders robots, although trading with them can lead to complete loss of the deposit, as the robot, with an unsuccessful transaction opens the opposite lot twice as large as the previous one. If it fails here as well, robot opens a new position in the opposite direction but with four times bigger lot than the original one. Considering that forex trading is highly dependent on news, releases and other fundamental factors that are instantly recognizable, but are not always the impulse to start a trend, using robots with Martingale often looks overly risky.
- Scalping - robots most commonly used in forex news trading. Systems quickly process the received information and instantly open or close positions.
To choose a trading robot, trader should clearly define the range of automated trading objectives, choose the most appropriate trading strategy and make a full preliminary test of the system.
Experts recommend consulting professional developers, because in this case you can not only order a robot for certain tasks, but also get certain guarantees and service support.

Why does automated forex trading not produce millionaire traders?

There is no point in discussing the advantages of using Expert Advisors in trading. This topic is discussed day by day, pouring over all advantages of automated trading from one article to another - "a soldier asleep while the soldier is away", there is no need to sit at the computer, there is no need to read the news, there is no reason to study all the details of trading, the process is on autopilot, the money is there and no nerves.
All this is seemingly good, but one question arises: why with such an abundance of advantages, there are no newly minted millionaires who have deposited a hundred or two dollars to their accounts at random and bought some history-tested wonder trading robot online?
Of course, someone is quietly trading using EAs and getting good dividends. However, most traders, judging by comments on forums, feedbacks of Expert Advisors and their authors, lose everything as they did in manual trading. Why?
The main problem is the narrow possibilities of the robot algorithm. The market is very dynamic, and not always what worked perfectly six months ago will work today.
In addition, any trading instrument, as we know, has two major phases of movement: flat and trend, and it is calm most of the time.
In this regard, it is foolish to demand from the Expert Advisor that uses the trend strategy and uses in its structure the readings of, for example, the most useful indicator MACD or Bollinger Bands to trade profitably in the flat. Likewise, a robot that uses the stochastic or any other oscillator will not be useful during a trend movement of the asset.
Of course, while the daily chart is lingering sideways, the 15-minute chart may have spectacular rallies. But here we have another pitfall of automated trading. As a rule an EA is created for working on a single chart. A good robot will take into account the readings of the neighbouring ones, while a regular one will not. The trader who bought the Expert Advisor is very sorry that it is idle, and it starts to adjust and adapt the robot for other timeframes, which already leads to drawdown.
The lack of artificial intelligence is both advantageous and disadvantageous for the automated trading in Forex. Expert Advisor cannot catch the nuances understandable to a trader, feel the mood of the market. But this does not mean that automated trading has no future. Algorithms of modern Expert Advisors are so thin and precise that there are hardly any traders who can compete with them in profit. But they are usually expensive robots used by banks and other large financial institutions. Naturally, they do not guarantee a 100% profit either.
Most of us use other types of robo-advisors. And here, the main rule of choice was formulated a long time ago. Everyone remembers the cheese and the mousetrap. If you have decided to go for automated trading, you should be very careful when buying or creating an EA and not rush to install the new product on a real account right away.
To summarize, once the trader gets an Expert Advisor, he should handle it very precisely, not just hang it on the chart and wait for a money avalanche. A trend robot should work only in a trend and a flat robot should work only on sideways movements, and both of them should be placed only on the chart they were created for.
A very important point is built into the algorithm of the Expert Advisor to protect the position. This can be a simple stop-loss or trailing stop, but a failed entry or an unexpected reversal of the price should be closed at a minimum loss. There is no need to be in a hurry, even in automated trading, and who knows, maybe a thoughtfully acquired robot will become the first step to the Forbes' rating.

Why traders need quotations: definition, types and peculiarities of application in trading

Quote is one of the main terms used by traders. It refers to the price of any exchange-traded asset - securities, commodities, currencies or precious metals. This value is constantly changing in the course of trading, since it takes into account the current offers from market participants - buyers and sellers.
Key features of a stock exchange quotation
Constant monitoring of the value of the assets of interest is the key to successful trading on any financial or commodity market. It helps to understand why a trader needs quotations, by studying the parameters that influence the value of a certain currency, commodity or stock. It is in constant motion, because the behavior of buyers and sellers depends on a number of factors. These include macroeconomic indicators, the results of the security's issuer and industry news.
In financial markets, quotes change many times during each trading session. The opening and closing levels of the exchange, and the maximum and minimum prices of the day, are regularly published by a quotation committee. Its main task is to control all transactions made by traders.
Varieties and rules for publishing quotations
There are several types of currency quotations:
Official - determined by a country's central bank, used for financial accounting, customs duties;
interbank - determined by major participants in the currency market with consideration of current supply and demand levels;
Exchange-based - formed by constantly collecting and comparing all bids to buy or sell a certain asset.
There are direct and reverse quotes on the currency market. The former represents the quantity of a particular currency in US dollars, while the latter represents the number of USD in the national monetary unit. If the two assets are not traded against each other, a cross rate is used - the ratio between them calculated by means of a prior conversion to the US dollar.
Quotations can be published as absolute and fractional values. The rules for displaying them depend on the specifics of the exchange. The Forex market normally uses a four decimal place notation. With this rounding off, traders can quickly work with the current rates. Quotation lists are accessible for all traders. Each of them selects the assets of interest to obtain information on their current prices, transaction volumes and other relevant information.

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