Show Buttons
Share On Facebook
Share On Twitter
Share On Google Plus
Share On Linkdin
Share On Pinterest
Share On Reddit
Share On Stumbleupon
Hide Buttons

Tag Archives: forex trading

3 Critical Tips For Choosing A Forex Broker

The importance of choosing the right forex broker is often underestimated. New traders with dreams of getting rich quick often look for features that are not important, and can even do more harm than good. In this article, we describe the three most important things to look for when choosing a forex broker.

1. Choose a broker who is subject to strong forex regulation.

The importance of this cannot be understated. Unregulated forex brokers are able to take advantage of you in ways you do not even realize. A prime example is slippage. Slippage is the difference between the price your trade is executed at, verses the price that was quoted when you placed the order. Slippage is a normal part of trading, because prices fluctuate all the time, and can easily move in the short time between when you place an order, and when it executes. However, unregulated brokers can pass the unfavorable slippage on to you, but keep the favorable slippage for themselves. This increases your transactions costs, and the effect can be significant over time, especially if you are a scalper.

The CFTC & NFA have arguably the strictest forex regulation in the world, and they audit their brokers regularly to make sure that slippage practices are neutral. This is just one of many ways that forex regulation can protect you as a trader.

2. Choose a broker who obeys the law.

This may seem obvious. However, it may surprise you to know that as of May 2015 there are only two forex brokers left in the United States who have never been fined by the regulators. The rest have been fined or banned from doing further business. Even in the face of strong regulation and regular audits, forex brokers still try to get away with cheating their clients. Do you want this kind of broker handling your money? Of course not. If you screen for United States forex brokers from this broker review page, you can easily see which brokers have been fined, and which have a clean regulatory record.

3. Choose a broker with low transaction costs.

Transaction costs are a lot lower than they used to be, and you may think this does not matter much to your trading anymore. If so, you are mistaken, and the following example illustrates why:
Say your starting account balance is $20,000. You have a simple trading system with a 30 pip stop loss and a 30 pip take profit level. You leverage 10:1 and you win 55% of your trades. Broker A offers a spread + commission of 2.5 pips, and Broker B offers a spread + commissions on only 0.7 pips. You make 450 roundtrip trades per year, which is just under two trades per day. The following chart shows the results after one year:

tips for chosing a Forex broker

The chart shows that with Broker A:
• 83% of your gross profits get lost to transaction costs
• Your net profit for the year would be $4,500 or 22%
With Broker B:
• Only 23% of your gross profits get lost to transaction costs
• Your net profit for the year would be $20,700, or 104%

In this example, you are clearly better off with Broker B. The difference in transaction costs will have the greatest impact to your trading if you trade frequently, or have a narrow trading edge.

This article was kindly provided by Forex Scam Alerts, who provide advice about the risks of forex trading and how to avoid scams.

If you enjoyed this article, and think it would benefit other traders, please like it on Facebook, tweet it on Twitter, or bookmark it using one of the social bookmarking buttons below.

Thanks for stopping by, and have a great day. 🙂

The Secret To Successful Forex Trading

What does the market do everyday?

If you think about it logically the market can do 3 things every day. It can go up, it can go down, it can go sideways, but it always does something. The market does not stay at the same price for 24 hours, its always moving, it never stays still, and if its moving, its moving for a reason, and if you understand why its moving, then there are opportunities to make money from those moves.

what does the market do every dayMost traders fail to understand why the market moves as it does.

They think price goes up because people are buying, they think price goes down because people are selling, and they think the market goes sideways because people are not buying or selling.

That can sometimes be the case, but its not always the case. Most traders react to what they see on the chart, if they see prices going up they buy. If they see prices going down they sell.

So why is it that 95% of traders lose money, if they are doing what the chart is telling them to do?

Why traders lose money in the market.

The reason most traders lose is because they buy when they should be selling, and they sell when they should be buying. The reason they lose is because they buy when prices go up, but because they don’t know why the price is going up, they don’t know how long to hold the trade for, when prices then reverse they get stopped out. The same applies if price is going down.

why do traders lose moneyHow much money would you be able to make if you knew why price was going up or down, and you knew how long you could hold your trade for to make maximum profit. Not because of buying or selling, but because of some other factor that’s making price move.

So you have had no success with buying or selling into a move, so you try to catch the bottom or the top of a move. Prices start going up, so you sell. Prices start going down so you buy. Prices keep going so you add to your losing trade, and prices still keep going. When you have been stopped out prices then reverse.

Why did you lose your money? For the same reason that you lost it before. Because you were buying when you should be have been selling, and you were selling when you should have been buying. Whether you are trend trading, or counter trend trading you need to know why prices are moving, and whether you should be buying or selling.

Its not just as simple as buyers or sellers. Prices move for many reasons, and you need to know that reason before you enter a trade, so you are on the right side of the move.

Understanding the Forex market.

understanding the forex marketI get a lot of calls from traders that think i have some sort of magic formula for trading the markets. A holy grail, or a guaranteed method for Forex trading success. Well guys i have to confess that i don’t have such a thing, as such a thing does not exist. No one knows with a 100% confidence what will happen next in the Forex market. But if you fully understand what is making prices move, and take high probability trades based on that understanding, then you can be a successful trader.

I am not the master of the market, or a Forex trading guru, and i cannot promise you untold riches by enrolling on my training and mentoring program, but what i can promise you is that i will teach you what you need to know in order for you to be successful, and if you devote the time required to learn what i teach, then you will be a consistently profitable trader.

Embrace new ideas and beliefs.

How i trade, and what i teach is very unlike what you may have come across before, and it can take some traders longer than others to fully embrace what i teach, and adapt their trading strategies accordingly. It can be a struggle for some traders to get in the mindset of how a professional Forex trader thinks, and how he trades.

the truth about ForexIf you have been trading for a number of years and losing money all that time, it can be hard to let go of your learned behavior, and look at the market in a different way. Some traders however, will see my stuff as a light bulb moment in their trading journey, and my teachings will literally transform their trading overnight.

So to any prospective students reading this, if you are considering coming on board with me, please have an open mind, and be prepared to embrace new ideas and thought processes about how the market works. What i have to say will turn your understanding of the market on its head, so be prepared for some shocking revelations.

Use your understanding to trade with confidence.

I trade Forex with confidence and an unrivaled understanding of the forces that drive the market. My entries and exits in the market are based on high probability reversal points.

trade with confidenceSome of my entries and exits are so precise, that it does sometimes seem like the market is dancing to my tune, which has prompted some of my students to ask me if i have a contact on the inside, someone feeding me information on where to enter and exit the market. 🙂

It does sometimes look that way, but i can assure you i do not have a contact on the inside, and there is no slight of hand involved.

Everything i trade and teach is based in what the chart is telling me to do. I am not going to go into detail about how i trade, and how i teach, but its all based on market knowledge. All the information you need to do what i do is contained within the chart.

Don’t waste time and effort with free education.

free forex educationThere are many Forex training companies, or individuals that will give away free information, or make videos of how you should trade the market. There are 1000’s of free videos on You Tube that you can spend years trawling through. I respect those people for taking the time to put together training videos to help people learn how to trade Forex. But the sad fact is they are a waste of your time and effort.

You have heard of the saying you don’t get something for nothing, well its true 99% of the time. You can spend a few years going through all this stuff on You Tube, and don’t get me wrong, its entertaining stuff, and you will learn a lot of the basics, but as far as making money goes, there will be very little in there that will help you in that regard.

The secret to successful Forex trading.

I am going to give you something now that will help you in your journey to becoming a profitable trader. This is a very important part of what i do, and in my opinion is the real secret to successful Forex trading.

the secret to forex trading successMost people think the Forex market is random, but its not. I have been in this business long enough to know that no matter how random it looks, its not random. The market is very structured. The same things happen, time and time again in the market, and when you understand the market as i do, you can easily pick up on these recurring events, and use them to make a profit from the market.

This is what i teach you in my training course. I teach you to recognise the recurring events in the market, and how to profit from them. And i am not talking about chart patterns, like head and shoulders. Although head and shoulders are a very good pattern, if you know how to trade them correctly.

I am not talking about buying and selling at trend lines, or support and resistance levels. I am not talking about Elliot Wave, or Harmonics, or Moving Averages, or MACD or Bollinger Bands or any other indicator that you can find to give you trade signals. What i am talking about here are the guaranteed moves in the market that happen every day.

Use what you know about the market to make money.

what-do-you-knowThis may seem like a strange statement, but try and think about what i have just said.

Use what you know about the market to make money. Think about what you know about the market, and what makes price move. What do you really know, with the highest probability? Work out what you are most confident about, and trade based on that.

If you are unsure about how price is going to move then don’t trade. You need to focus on probability to be successful. Be proactive in your trading not reactive. Analise the market for probability, and trade when the probability of a successful trade is most in your favor.

Thanks for visiting my site, and have a great day. 🙂

A Profitable Forex Trading Strategy.

Searching for success.

There are 100s of Forex trading strategies that are used by traders, but not all of them have the potential to be profitable. Traders spend a lot of time searching for a profitable trading strategy, but the majority of them never find a strategy that they have enough confidence in, to enable them to trade with big money.

search forex strategyMany traders think that the reason they are not making money consistently, is because of a lack of discipline. They believe that their losses are down to their own inability to follow a profitable trading strategy, when in fact the real reason they cannot make money is because their strategy is weak.

I agree that discipline plays a major part in the success of every trader, and it is something that is very hard to truly master, but you also have to have a proven trading strategy to work with, or you have no chance of success. When you trade with a great strategy, and you have mastered discipline then you will become a very successful trader.

Finding a profitable trading strategy.

searching through shitThe problem faced by many traders is finding a strategy that has the potential to make profit consistently in the Forex market. This was a major problem for me when i first started out, as i did not know what worked and what did not work.

Would i be wasting my time and effort trying to learn something that would never be able to make money consistently. I know that this is a problem that many traders face. You can waste years learning and back testing strategies, only to find out that they do not work, and its very frustrating.

I am fortunate that i am a quick learner, so it took me a lot less time to wade through all the crap and get to the really good strategies that can make you lots of money.

Are you a frustrated trader?

When you first start on your Forex journey you inevitably come across many Forex training websites that will claim to be able teach you how to trade. So many traders will invest a few 100 bucks in something and start to learn what is being offered.

frustrated traderAfter a number of months or even years of learning, the majority of traders are left frustrated because of their lack of profitability.

I know of many such websites and training providers that claim to be this that and the other, but in reality they do not understand the business at the level required to be able to offer training, and although they are not charging a fortune for their services, its the time that you lose that’s the real killer.

The lost years learning to trade.

It is very important that you find the right trading strategies to learn, as it takes years to be a truly great trader. Yes you can be profitable in a few months with the right training, but to be consistent week after week month after month will take a lot more time.

lost yearsTime is an extremely valuable commodity that some people do not fully respect. Yes you may have lost a few 100 bucks learning something that doesn’t work, but how long has it taken you to find out, and how many more strategies will you learn, that do not work either.

You can get back the money you have spent on these crap websites when you finally learn how to trade, but you will never get back the time that they have taken from you. I have been there, i have wasted my time on their shit too, and although the money is insignificant, the time that they have taken from you is very significant, and lost forever.

The strategies i teach.

forex trading strategiesI trade and teach many strategies, but everything i teach makes money. I do not teach strategies that are not profitable. I value time above everything else, we are not on this planet for very long and your time and mine is very precious, and i would never take time from anyone and teach them crap that does not work.

My Forex training course is not cheap, but its worth every penny i charge and more. The knowledge that i have about the Forex business has been built up over years and years of chart study, time that i will never get back, but its been time invested wisely by learning some really great stuff that i can now pass on to my students.

Knowledge + Time = Success.

formula 4 successThis simple formula is all you need to be a great Forex trader, but the most important part of the formula is knowledge.

Time on its own will not bring you success. Time will bring knowledge, and the more time you invest, the more knowledge you will have, and the closer to success you will be, but learning to trade this way is the wrong way in my opinion.

The quickest way to learn, is to find someone with the knowledge you need, and invest the time with them, and success will come much quicker. If you have ever learned anything in your life you will most likely have learned it from someone else. Learning to read, learning to drive, learning your job, so why would learning to trade Forex be any different?

Volume Spread Analysis (VSA)

This article was kindly provided by Leonardo Barata of analyticalvsa.com who is an active VSA trader. VSA is a trading method that is favored by many traders. I do not trade VSA myself but you may find it interesting. If you like this article please share it. This article is for entertainment value only, and is not a recommendation to trade VSA.

What is volume spread analysis?

Volume Spread Analysis is a methodology originated in early 1900s, by Richard D. Wyckoff (1873-1934), a successful Wall Street trader and later known as the man who made a fortune in the 1929 market crash. Other very successful traders such as Richard Ney would use this methodology as well, only under a different name. This methodology, which is also called the Wyckoff method, was put in more modern terms by Tom Williams, a former syndicate trader based in London, in the 1960s. For the deep insights on the markets that it provides, and the fact that it can be applied to virtually any liquid market, VSA made a name for itself in trading communities.

Understanding VSA.

To understand what VSA is about, we must first understand who are the people who are making money in the markets, and how are they doing it. Like in any other business, there are specialists: some traders specialize in energy futures, others may specialize in the Japanese Yen pairs, others day-trading forex or stocks, and so on. And who are them? These are institutional traders, pit traders, syndicate traders and market-makers, which make a living speculating on the markets. If only we could know what those specialists are doing, then we could trade almost anything without having to do all the fundamental analysis and without looking at all the factors that influence the prices. Well, it turns out we can, and this was exactly Wyckoff’s breakthrough!

The role of volume.

The quantity that represents the activity in the market and is widely available (though not widely used impressively) is the volume. And one thing about the traders who consistently make money in the markets over the years, is that they’ve been able to accumulate a lot of it, and will make large trades to earn a significant amount of money for them. So the volume is the starting point of our analysis, and will show if there is a significant activity (or lack of) in the market, which will be very important to determine what the professionals (smart money) are doing.

Spread’s importance.

But Volume Spread Analysis as the name implies, not only uses volume but also the spread (bar’s high – low). The bar’s spread gives clues as to what type of activity is happening: for example, a low-spread up bar with high volume, indicates there was a lot of selling by the professionals and buying by the public: they prevented the price from going upper by dumping their positions in the market, which the public was happy to absorb. Another example: if there was an widespread down bar with high volume, and the next bars are up, it means there was actually buying on that down bar. Why would the prices go up if that was true selling? The smart money uses the public euphoria to dump or to open their positions, as not to turn the prices against themselves.

Charts examples:

accumulation

The end of the 2008 stocks bear market: Right before the bear market ended, there was accumulation (professional buying) evident in Dow Jones Industrial Average and other indexes. Signals of distribution were also evident before the bear market started in 2008.

The gold top: right before the bear market in gold, and after all the buying euphoria by the public, gold finally collapsed after signs of heavy distribution.

distribution

Learn more and get VSA indicators on our volume spread analysis website.

About the author: Leonardo Barata is a forex and stocks VSA trader and developer.