Archive for July, 2009

Trend Following in the Forex Markets

I want to speak this morning with the idea of trend following in the forex markets and how to use forex signals. There is no magic to trend following in the forex markets. It is not easy however. The magic is using one of the time tested simple forex systems such as Donchian breakout. The Donchian breakout has been around since the 1940s. There is no magic in order to trade the forex markets. The forex signals used are 22 day ( period) breakouts…and breakdowns with various risk parameters & exit parameters. That is it.. simple. What is complicated is the discipline and patience to let the system work. More so I would suggest not just trading the forex markets but a wide base of commodity markets ( depending on your account size) as at times they can become very quiet.
In order to enter a trade ( forex signal) is a 22 Period breakout.. or break down with the condition that a long term MACD is confirming the direction. I risk less than 1% of my account on any trade based on the risk to the initial stop. The exit is based on an initial stop based on Average true range…as well as following stop based on price. If the trade moves… I am trailing the move..
In all honesty it does not get any easier than that…
Look at these following trades… you can trade any of the forex markets or crosses..

Japenese Yen CME contracts…

5.21.08 Entry Fill .9889 loss -$3884.00 on 5.28.08 .9696 3 contracts .5% of the account
7.15.08 Entry Fill .9641 loss -$5,500 exit on 7.23.08 .9433 4 contracts .8% of the account
9.16.08 Entry Fill .9735 loss -$6,000 exit on 9.19.08 .9427 3 contracts .9% of the account

At this point most inexperienced forex traders or commodity traders would have given up. The key point is you never know what trades will work. You must be consistent without any emotions. This is were the discipline comes in.

9.29.08 Entry Fill .9748 profit of $13,638 exit on 1.05.209 2 contracts ..There were forex trades there after…You never know what trades will work.

What I have personally seen is the lack of discipline when one goes through a typical draw down. I have two suggestions. One is to have a brokerage trade your forex signals (automated forex) or allocate to a commodity trading advisor who has developed the full strategy from entries..risk… money management…and mostly discipline.
More so if you want to try to compound your way to wealth don’t think you can be an expert overnight if you try trading yourself. Too many inexperienced traders try to trade forex without a plan or methodology…they are basically gambling. However this is maybe what they might want. Ed Seykota has said we all get out of the markets what we seek. I do not seek entertainment or gambling. I know it is a hard game and I am trying to compound my way to long term wealth with strict money management and risk parameters. The actual chart can be found here www.myinvestorsplace.com/2009/07/26/trend-following-in-the-forex-markets/

Andrew Abraham
www.myinvestorsplace.com

Futures and commodity trading involve substantial risk.People can and do lose money trading.

My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I am a commodity trading advisor/co manager of a commodity pool who adheres to the philosophy of trend following. Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets us apart from other Commodity trading advisors and commodity pools is that we are not only concerned about the return on investment but how much risk you will have to tolerate to achieve your goals.

Article Source:http://www.articlesbase.com/currency-trading-articles/trend-following-in-the-forex-markets-1069918.html

It takes a great deal of time and patience to learn how to trade Forex effectively. In fact, rushing into the Forex trading game could result in devastating losses before barely even getting your feet wet. Luckily, there are several measures one can take in ensuring their Forex venture is one of fruitful gain. Outlined below are some of the more popular methods for success.

You need to be in a business state of mind whenever making Forex trades. When dealing with Forex, you are dealing with all of the highly skilled and powerful competition as well. This competition includes powerful investors, international banks, and large corporations on top of all home based Forex businesses that have been around for years. Dealing with this kind of competition necessitates a business oriented attitude.

One huge mistake people make when trading Forex is blaming the markets for big losses. The uncertainty involved in this business is what makes it so lucrative and worthwhile, so it is up to you to be fully responsible for the outcome of your trades. This way, you will always feel you have control over fixing your mistakes rather than rendering yourself a helpless victim of a bad market.

It is also critical for Forex traders to be extremely organized. Don’t do anything without documenting it and furthermore don’t make any moves that you aren’t fully prepared to make. Figure out a system and stick with it.

For many extremely successful traders, their secret to their huge profits is they keep records of every move they make and later analyze them to better understand where they are going right and more importantly where they are going wrong. Keeping an organized track record of your experiences is detrimental to the growth of your Forex business.

You may think that, with all of the scams and false information out there, it is impossible to learn to trade Forex any way but by self conducted research. While there is some merit to this belief, it could be extremely time consuming sifting through all of the available resources and eliminating that which is false, usually by way of trial and error.

There is so much literature and information regarding Forex available that it is not necessary to take the challenging route of learning everything on your own. In addition to the infinite resources available, you should also be weary of the increasing amount of Forex misinformation that circulates. Most of this false information revolves around Forex being a huge money maker requiring little to no effort. The very opposite is true. If you want the most relevant knowledge possible, your best option is hands on training by a professional trader.

It is always a good idea to keep track of how much you are putting into your Forex business compared to the profits you’re making. Often, new traders spend hundreds and hundreds on software and other products and services and are thrilled to make a successful trade as a result, but what they have yet to realize is they are still in the negative! The safest investment to make in Forex (meaning it is most likely to increase your trading success rate) would be those made into your own personal knowledge.

G. Malone has amassed a site of Forex Resources, and if you are interested in, navigate to allforexshop.com to get started. Learn How To Trade Forex and start trading Forex today.

Article Source:http://www.articlesbase.com/currency-trading-articles/the-best-method-to-learn-forex-trading-1066619.html

What are the important factors to be kept in mind when choosing Forex trading software? While there are many, the crucial points are performance of the software and its profit potential. So, how do you choose the right software? There is no dearth of software in the market to assist you with Forex trading. However, if you are a newcomer to this field, beware of software scams. It’s not difficult to be fooled by their convincing claims and promises of high returns on investment. Read on to find out exactly what you need to consider before you finalize on the software of your choice.

Fully Automated Software

Forex trading calls for making a lot of complicated decisions. Pondering over these decisions while taking into account a whole lot of information and data is not easy. Especially for newcomers who are still on a learning curve. However, with speed on their side, Forex traders can make very important decisions in a jiffy and speed up the trading process. When buying Forex trading software, find out if it is fully automated. That way you, you will be able to do many things, from the analysis of market conditions to the selection of the best currency pair to trade in much faster.

User Interface Should be Simple

Not all of us are comfortable using complicated software with confusing interface. There is beauty in simplicity, and it would be best to go for Forex trading software that have a simple and user friendly interface. As far as possible, avoid programs that are difficult to use. Choose one that is easy to learn and can be mastered fast. Look for software that can train you with the help of interactive videos. More and more software companies are beginning to include these training videos along with the software.

Server Based Software or Web Based?

There are two types of Forex trading software – one that is server based and another that is web based. The server based software needs to be downloaded from a server and installed on to your computer. A lot of people don’t prefer the server based programs as they are rather expensive and call for regular maintenance and updating. The web based software, on the other hand, is much more convenient to use. A user account is created in your name on the website and whenever you want to access your account, you can log in with it and your password. They do not require maintenance, and can be accessed from any computer.

Other Factors to Keep in Mind

Choosing Forex trading software is also a matter of personal preference. You need to go for software that complements your knowledge of the field, experience and interest. When choosing an automated system, go for one that has the ability to convert pips into money. The software should also be capable of being installed on a virtual server. If you are still unsure what kind of software to buy, contact your local brokers and find out what they would suggest. When buying software from a company, thoroughly cross check the testimonials.

Forex Trading Software makes you independent and you no longer have to rely on anyone to make your decision. For more information on Forex software, log onto http://www.workfromhomeatmakemoneyonline.com/forextradingsoftwaresystem/.

Article Source:http://www.articlesbase.com/currency-trading-articles/what-you-need-to-remember-before-choosing-forex-trading-software-1067326.html