Trading Currency Blog

StevenP asked:


Its true that demand and supply affects the currency rate but am wondering what in more detail actually affects the demand and supply of currency. I.e. what change will affect the demand and supply

ROMITO

Sacha Tarkovsky asked:


Choosing a Trading Method

While there are many ways to achieve currency-trading success, all methods have the following salient points in common:

1. Simplicity

Most of the best trading systems are simple.

There is no correlation between how complicated a strategy is and how successful it will be.

In fact, the simpler a system the more likely it is to be robust in the face of changing market conditions.

Some of the most successful systems of all time have been extremely simple and you don’t need much mathematical knowledge to understand them.

2. Liquidate Losers Quickly and Run Big Profits:

The basis of any successful trading systems that deals in leveraged products is:

You need to be able to run the big profitable trends and exit losers quickly.

All good trading methods do this, and use strict money management rules, to ensure preservation of equity.

3. Understand your Method

This may sound obvious, but you need to understand your trading method, and the logic behind it, so you can execute it with confidence and discipline.

4. The Importance of Discipline

Currency trading success is rooted in a successful method applied with discipline. This means a trader has a method and follows it. This however is much harder in practice than many traders believe.

When money is on the line all traders emotions come into play and unless they can maintain discipline, currency-trading success will elude them.

Let’s look at some ways to maintain self-control and discipline when making trading decisions:

Firstly, you must be confident in your trading method. You should know exactly what you are going to do:

· When a signal indicates that you should enter a trade

· When a signal tells you to exit

You must execute your trading method in a disciplined fashion; if you don’t, you won’t have a method in the first place!

Secondly, and perhaps the best way to maintain self-control and discipline, is to feel confident in your trading method from the start.

If you have confidence when you execute your trades, you will “know” that over time they will be successful - even if you are suffering a string of short-term losses.

You must execute the buy and sell signals with confidence - these signals will lead to currency trading success in the long run, as you rigidly adhere to your method.

You need to stick with your method through good and bad times, and confidence in the underlying logic, will help you remain disciplined.

The more disciplined you are in trading, the more profits you will make longer term.

You should not underestimate the need for discipline, if you want long-term currency trading success.

If you read Jack Shwager’s Market Wizards, and the New Market Wizards, where he interviews the top traders of all time, you will see how all of them place an influence on discipline.

Currency trading success relies on a number of factors and these are:

Robust trading method + discipline = currency trading success

Remember, when trading any method, it will be of little use to you, unless you have confidence in it and can execute it with discipline.

There are a number of variables involved in longer-term currency trading success and the above are the salient points to keep in mind when deciding how to trade currencies.



ZABLOCKI

Monica Hendrix asked:


There are big rewards in currency trading and that means risk is present - without risk, there cannot reward - PERIOD. However, the risks of currency trading can be managed and controlled and you can then seek huge gains.

As soon as you enter a currency trade you are taking a risk how you deal with that risk is critical and you can reduce it.

Consider a high performance racing car. In the hands of an inexperienced driver the danger of a crash is high - but in the hands of an experienced driver, the risk is much reduced.

Risk can be controlled and reduced, just as with driving a car and lots of other areas of life (including trading forex), you can control it.

So how do you reduce the risks of trading currencies?

Let’s look at some simple tips:

1. Trade infrequently

Sure you can trade for profits everyday but not all trades are equal and you will not have high odds trades’ everyday, so trade sparingly. I know traders who trade less than once a month yet; their profit per annum from their forex trading strategy is over 100%!

2. Trade Longer term

Trading is all about trading the odds and you don’t get the high odds trades if - you day trade or scalp, so avoid these methods of trading.

You need to trade longer term and that means forex swing trading, or long term trend following.

3. Trade Breakouts

Most major trends start from new highs or new chart lows and although it looks like you maybe missing the best entry point for your trading signal - your not, because the odds are so heavily in your favour.

4. Trade Valid Support and Resistance

If you trade breakouts, then trade valid support and resistance and this means - areas that have been tested at least three times, in two different time frames and the more widely spaced apart the better.

Look for support and resistance that traders view as Important and breaks are highly psychological.

5. Do NOT Look for perfection

Sure we all want to buy market bottoms and sell market highs - but that’s not the real world of trading. Be prepared to miss the bottom and the top and take the chunk in the middle.

If you caught 70% of every big trend you would be very, very rich.

6. Confirm!

Forget predicting! Confirm each and every move, with momentum indicators to make sure the odds are on your side.

If you don’t know about momentum indicators make them part of your forex education.

Never predict this is another word for hoping and guessing and will ensure you lose.

7. Don’t Restrict risk to Much

Many traders like to trail stops or place them to close.

While it may appear that the risk is less it’s not because you have a high odds of being stopped out by random volatility.

Let the market breathe and understand volatility and standard deviation of price.

If you are trading for big gains the above tips will help you manage and control risk and keep in mind, you have to take risks to make big gains - but there is a huge difference between trading in a rash way with no thought and a calculated risk which puts the odds on your side.

If you trade the odds correctly, you can manage the risks of currency trading and make big long term gains with your currency trading system.



QUAID

bannabeauty asked:


As with any investment, I understand there are risks. However, I am seriously considering taking the online training course offered by Forex on Currency Trading. It seems too easy to make money and I believe there must a catch. I’m only going to invest what I can afford to LOSE! But I would love to hear from someone already trading or have traded!

DANIELSON

Jeremy R asked:


I’m quite interested in this but something just doesn’t seem right.. Do I have as much of a chance getting into trading stocks? Explain!

DANAHER

▲ßûІІѕ vş ßèāŗѕ▼ asked:


I am trying to learn currency trading as soon as possible and need some someone expert to tell me the most important things I need to know about currency trading.

Thanks

WEISENBURGER

Pilot25 asked:


Can you use E trade as a currency trading tool to profit money?

MARON

Navi K asked:


Multiplayer online games have given rise to a virtual economy, in which all kinds of virtual assets from in-game currency, magic shield to whole characters are traded against real world currency. there are sites like famre100.com and gggold.com sell all kinds of in-game money for real world money,what do you think of this phenomenon.

SANDINE

Ducati 996R asked:


E trade and Ameritrade is just stocks, options and bonds isn’t it unlike Tradestation?

BEGAYE

mike asked:


cuz my friend was trading currency, and was only using about 100$

ZMOLEK