Posts Tagged ‘price action’
Techniques for learning to trade
November 30th, 2009
Learn to trade the forex market
Learning to trade the forex market can seem like a daunting task to any beginner. Fortunately there are many traders out there who have made all the common mistakes and already traveled down the bumpy road of learning to trade the market. The best piece of advice to give a total beginner to forex trading is to learn from a professional, someone with time-tested and relevant trading strategies; someone with a common sense market philosophy as well as a unique market perspective. Learning to trade forex does not need to be the frustrating, pulling your hair out task that it so often becomes for people. You will need to develop the proper market mindset and this can best be learned from someone who already possesses it. Just as you learn any job-related skill from a mentor, learning to trade forex should be no different.
If you want to learn to trade with the least amount of trial and error possible then I suggest you learn from a professional forex trader who offers on-going support. Learning to trade can be a very expensive endeavor, so I suggest you do not try to do it by yourself. There is a lot of good information available on the internet for learning to trade the market. However, there is probably far more junk information as well as people trying to scam you out of your hard earned money.
Most people who want to learn to trade are mainly interested in the technical aspect of trading forex. That is, making trading decisions based on the information provided on a price chart. Where many people go wrong in technical trading is thinking more is better, or that if they understand how more indicators work it will lead them to bigger profits. First of all, you should understand that when it comes to technical analysis and your charts, more is not better. Professional traders and hedge fund managers are not using lagging indicators because they understand that such tools are useless and counter productive.
Most professional traders you will discover make their decisions based on pure price action analysis with a certain amount of fundamental economic understanding. A price chart is at the very heart of any market and shows all market participants’ beliefs about that market. There are so many trading courses for sale that make you believe you need to over-lay a bunch of indicators on your chart that it can be maddening for someone who teaches and trades just from pure price action like myself.
Learning to trade is difficult enough without all the unnecessary bells and whistles that many so called forex educators try to sell to you. When learning to trade you need someone you can trust and who is providing a valid and time-tested product. Watch out for the charlatans trying to take your money and run. Look into price action analysis and I promise that once you find a genuine price action trainer you will never go back to your overly complicated indicator method. Learn to trade from price action and you unlock a world of difference in the way you think about trading.
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What are the benefits of a forex community?
November 26th, 2009
Benefitting from on-going support:
Too often in the world of forex trading beginners are sold an over-priced trading course or piece of software and then they are on their own. Usually they end up finding out very quickly how easy it is to lose money in the markets. Success in trading is not something that comes over night. It takes many years of diligence and discipline and is definitely a skill that lends itself to learning from those who are more experienced. The benefits of having a community of traders all using the same method and supporting each other and sharing ideas are substantial to say the least. I am very proud of the member’s community at my website and the on-going support it provides to traders interested in learning to trade using price action analysis.
Trading can be a lonely endeavor and it is a great help to have other traders to talk to and share ideas and mistakes with. Often a beginning forex trader can think he is the only one making a certain mistake or that the market knows his or her every move and is out to punish them. These thoughts are common to all beginning traders and one of the benefits of joining an online forex trading community is that you begin to realize this much sooner than if you make trading a solo venture.
My online trading community is geared specifically towards price action analysis techniques, especially those I teach in my trading course. The trading course that I wrote includes lifetime access to the member’s community as well as regularly updated trading videos and other content. By focusing my website on the specific way that I use price action to profit in the market all of our member’s share a common goal. Many online trading communities or forums get confusing and jumbled up with irrelevant threads and redundant topics that make it difficult to get a quality learning experience.
My online trading community provides daily market updates and price action analysis of varying forex currency pairs from me. I think that if you go and browse my website for a while you will see it is quite different from other trading education websites. I personally oversee all new educational material on my site and make sure that it specifically pertains to my trading course. This way all members can grow and prosper with me and we can all benefit from each other. The importance and advantages of on-going support in the forex world really cannot be emphasized enough. If you have been trading the markets by yourself for a while now with no success then I highly recommend you go check out what I have to offer. You will realize you are not alone in the forex world and there are trading methods out there that are simple and profitable.
I pride myself in continually adding new educational materials to my forex trading course and to my website. Unlike many marketers who are just out to sell you a product and then never communicate with you again, I offer my personal trading strategies and insights into the market on a regular basis. The ideas I provide to my members are the exact same ones that I used to navigate the markets myself. I thrive off of the feedback that my members provide me with. There is truly a symbiotic relationship between teacher and pupil at Learn To Trade The Market, and I sincerely hope you will decide to change your market perspective and join us in the community and see what it’s all about.
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Forex trading: why you need a quality trainer
November 24th, 2009
Forex training
A thorough education in trading the forex market is essential to your development and success as a trader. Trading is one of the most difficult professions to succeed at; as any experienced trader will attest to. A difficult part of forex training is finding an experienced forex mentor who is a professional trader and a great educator. The fact is that the majority professional traders are not out there telling you how they trade or trying to help people trade better. They usually are too busy taking money out of the market and concentrating on their own discipline and self-control to have enough time to help aspiring traders. There are indeed some forex trading educators out there who are genuine; however they tend to get lost in a sea of people trying to sell you a black-box system or that don’t really know if the method they teach is consistently profitable.
There are some characteristics of a great forex trading trainer to watch for in a candidate you have in mind. First of all, you need to find out if the person is geniune or not, so take a look at their website. Is it just an e-book trying to sell you something at the bottom with no actual forex training information? If they are not offering any free educational material on their website than they are likely just a sales person trying to take advantage of your trading hopes. Most truly genuine forex educators will have numerous free trading articles, videos, etc on their forex training site. Now, that’s not to say there is anything wrong with selling a quality forex training course to interested people, because there is not. A genuine forex trading trainer will have spent years of trial and error and frustration perfecting their trading method, so it only makes sense that they charge a small fee to share it with the world.
A good forex training website will not only have numerous free materials available, but it will also have the main forex educator well advertised. If you don’t even know what your prospective forex mentor looks like, than I would take that as a warning sign in and of it’s self. When you buy a trading course or subscribe to a forex training website essentially what you are doing is buying the person behind the training materials. This person should obviously be knowledgeable about forex trading and well spoken. It doesn’t make sense to buy a course or subscribe to a service that does not give you any kind of clue as to who is behind the training material.
Forex trading training usually comes in two forms; someone trying to sell you a piece of software that consists of a few lagging indicators that give you buy and sell signals with no real market perspective or actual educational material included, or, someone trying to sell you an e-book at a ridiculous price with a bunch of common sense information about forex that you can find for free all over the internet. The third form of forex trading education is a bit harder to find. Specifically, I am talking about an on-going forex training website with various forms of educational material’s that are constantly up-dated and expanded.
So before you purchase any forex training course or subscription service you should ask yourself what am I really buying here? Does the person selling this product to me seem genuine and do I even know anything about them? Look for free forex trading material as well as a common sense and straight forward trading method. Finding a quality forex training website in the ocean of forex material floating through the internet is not as easy as you might think. So take the time to see what forex trading training method fits you best and ask yourself if you trust the person you are learning to trade forex from.
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The significance of your market mindset
November 22nd, 2009
The market mindset trap:
The Forex market can be a very dangerous place for those not operating from the proper mindset. Trading is almost entirely psychological and how you think about the market is the most important factor in determining your long-term forex success. An objective mind set is required to succeed in the forex market. While many traders begin with an objective mindset towards the market, very few are able to maintain this way of thinking.
The difficulty in maintaining an objective market mindset lies in the fact that you can do an enormous amount of damage to your trading account extremely quickly in the forex market. Traders have access to an enormous amount of leverage in the forex market and leverage is like a double edged sword to someone who is trading from the wrong market mindset. So how can a foreign exchange trader achieve and maintain an objective mindset in the ever changing and volatile arena of forex trading?
The proper market mindset begins with not trading money that you can’t afford to lose. You should not be funding your trading account with money that you could possibly need to live on or that anyone else in your family might need. This is the first step in operating from an objective point of view in the forex market. Not needing the money in your trading account allows you to develop virtually no emotional attachment to anyone trade you enter, this is very important if you want to consistently make profits in the foreign exchange currency market.
Once we have confirmed that we are not using money we need for any day to day expenses we then can move on to the next most important factor in achieving and maintaining the proper market mindset; a truly profitable and easily definable trading methodology. We need a consistent edge in the market, a definable and profitable edge is important because we need it to base our trading plan on. Equally or more important than a profitable edge in the forex market is money management. However, you need to first define your trading method before you can design a money management plan.
Planning your money management scheme is the next step after you know what your definable trading edge in the forex market is. You need to sit down and map out how much you are willing to risk every time your edge appears in the market. Most traders are unable to maintain an objective mindset while risking more than 2% on any one trade. This of course is only a general rule and mostly depends on the frequency of your trading, if you only trade once a month than you might be able to operate objectively by risking 5% per your once a month trade. However, if you are trading once a week or more than generally speaking 2% is the max you should be risking if you want to give yourself a realistic shot at not becoming emotional about your trading.
To find a truly consistent edge in the market I can recommend the only trading method that I have found that provides solid strategies. The best method I have found for trading any market is price action analysis. After discovering and implementing specific price action setups into my trading I was able to easily plan out my money management technique. This encouraged me to remain calm and confident during every trade; thus achieving an objective market mindset. There are many ways to profit in the market, however you do it though one thing is for sure; you must think objectively about all of your market related activities.
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Benefits of trading the forex market
November 22nd, 2009
Advantages of trading forex versus other markets:
§ The foreign exchange currency market is extremely liquid.
With average daily turnover of more than 3.2 trillion dollars the forex currency market has by far the most liquidity of any market in the world. This means there is practically no slippage; in other words, the price you see advertised is the price you get.
§ Constant liquidity, 6 days a week.
The forex market is different from other markets in that a person can trade 24 hours a day 6 days a week. Forex markets provide for trading at any time of the day, where as stock and futures markets have specified times their exchanges are open. This provides for more time to test strategies and bigger samples of data to work off of, as well as the ability to take advantage of other countries’ active trading times.
§ No centralized market.
Since forex trading can be done from your own home there is no centralized trading market. The big advantage this provides to the retail forex trader is that there are no broker’s commissions or fees. Forex brokers, known as market makers, collect the difference between the bid and ask price on a currency trade, this is known as the spread. The effect on the trader’s position is that it will start off being between 1 and 10 pips negative, depending on the volatility of the currency pair being traded. However, for the trader with a consistent and profitable trading method, this small burden is hardly noticeable.
§ It is impossible to lose more money than you put in your account.
All forex brokers usually offer trading platforms that automatically close out a client’s open position if they have an open loss that exceeds the margin requirement. This means there is no risk of your account going negative at which point you might actually owe money to the exchange, which can happen in futures trading
§ Low margin requirements allow for leverage.
In forex trading a trader can get leverage up to 400:1 on a micro account. This provides the ability to control 400 times the amount of money they are risking on a trade. This is called leverage and it provides the opportunity for huge profits relative to account size, but also for huge losses.
§ Demo account trading is widely available.
Most forex brokers you will encounter offer a free demo account to learn how to trade from. If properly utilized a demo account can teach you the mechanics of trade execution as well as give you time to develop and test your own personal trading strategy. A trading method that consistently makes money on a demo account, if traded the same way, should make money on a real account. The difference resides in the fact that real money trading is much more emotionally difficult on people. However, if you take the time to test your trading method on a demo account and really take it seriously, the transition to trading real money in the forex market can be relatively seamless.
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What is forex trading?
November 22nd, 2009
What is Forex Currency Trading?
The foreign exchange currency market is where forex trading takes place and is the largest financial market in the world with daily average volume in excess of 2.1 trillion. Traders in the forex market buy and sell various currencies in order to make a profit; assuming the currencies’ value changes in their favor. Economic and world events are the main catalysts that propel the forex market.
Forex Basics:
The foreign exchange currency market is not limited to a physical location like stock markets are. As a matter of fact, the forex market is much larger than all stock markets combined. Forex trades are usually executed over the internet or telephone. Most forex trades take place in the major cities of the U.S, England, Australia, Japan, and Germany.
The forex market has names for the first and second currency of a pair, base currency refers to the first and quote or counter currency refers to the second. Exchange rates in forex are quoted per unit of base currency, for example, the exchange rate between the U.S. dollar and the euro will be indentified as EUR/USD, so the number will be the amount of U.S. dollars that can be exchanged for one euro.
At the present time the currency with base precedence is the euro, so this means that all currency pairs involving euro should have it as the base currency. The hierarchy for base currency is as follows: Euro, Pound Sterling, Australian Dollar, New Zeeland Dollar, United States Dollar, Canadian Dollar, Swiss Franc, and Japanese Yen.
How Forex trading works:
In the foreign exchange currency market quotes include a bid and an ask price. The bid is the price to sell the base currency in exchange of the counter currency. The ask is the price to buy the base currency in exchange of the counter currency. The difference between the bid and the ask price is know as the spread. Forex brokers are market-makers; this means they provide a means for willing market participants to buy and sell currencies. Instead of charging a commission per trade as stock brokers do, forex brokers are compensated by receiving the spread of the currency pair being traded.
Movement of a currency pair is expressed in pips. One pip is the smallest incremental change of any currency pair. For example, if you see the current price of GBP/USD (British pound/U.S. dollar) quoted as 1.6832(bid)/1.6837(ask), then the spread of this currency pair is 5 pips, because the difference between the two is .0005. So for the GBP/USD currency pair one pip; the smallest incremental change for that pair would be equal to .0001.
Forex trading can be quite volatile due to the multitude of big money players that trade this market. Volatility in forex acts like a double edged sword; depending on how you utilize it, it will help you or kill you in the markets. Make sure you understand the many intricacies of price action before jumping into the market head first.
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Price action tutorial
November 19th, 2009
Price action is the behavior of price of a specific currency, commodity, stock or other trading instrument over a specified period of time. Price action analysis will help you to understand that specific price patterns can give you a predictive edge in market over a given time period. Certain price patterns re-occur in the markets and can be used to develop a rule-based system.
Through price action analysis we can visually see exactly what is occuring in any given market at any point in time. Price action shows the supply and demand situation of a specific trading instrument during a specified period of time. Market beliefs and expectations are reflected via price; traders that are better informed or that trade bigger size leave a more noticeable trail; by analyzing price action during a specified period of time we can make an educated guess as to what the “power players” are doing in the market.
As retail forex traders, our goal is to jump aboard the price trail left by bigger players who have the power to move the market. By building our price action trading system around a few time tested and repetitive setups we give our selves the best shot at riding the momentum of the market to consistent profits. Markets reproduce specific price patterns over and over as a function of how they operate.
Most people who have traded actively for any length of time will attest to the fact that trading is about 80 or 90 percent psychological and 10 to 20 percent method. Most forex traders start off by thinking it is the other way around and end up losing money and finding themselves losing what seems like a constant fight against the market. An education in price action analysis gives us a simple, straight forward, and extremely effective trading method that let’s us concentrate more on the psychology of trading. If we as technical traders are primarily basing all of our trading ideas off of charts then why would we confuse and frustrate ourselves with anything but what the chart is made of which is of course price action ?
A mastery of the markets is the result of a trading method rooted in consistency. As a matter of fact, each one of our trading activities must be performed with consistency, if we strive to be profitable traders. Price action analysis gives you the know how to recognize specific price patterns that happen over and over in the market. This allows you to consistenly profit in the forex market; something few traders ever achieve. Prominence in any profession is usually accompanied by great training and mentoring. Learning from someone who trades with the same methods they teach is crucial to the relevancy of your price action education. So get yourself forex training in specific price action patterns and I promise that you will be well on the path to trading consistently.
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Consistency = forex success
November 19th, 2009
Consistency is the key to forex success:
When starting down the path to learn about forex trading, we often hear that we need to be consistent in our approach to the markets. What exactly does this mean and how do we develop consistency in the markets? Consistent profits are derived from consistent actions. There is no room for emotional reactions while trading the forex market; however, there is a need for flexibility. Consistency is the result of a mindset that consciously manages a person’s emotions while trading the market. So exactly how can a forex trader develop a consistent approach to the market while not eliminating flexibility from their trading plan?
The only real way you can ever develop consistency in the market is by first finding your edge. In edge is a method of trading in the markets that gives you a positive ration of winners to losers over time. You need to have confidence in your edge because it will not win every single time; you must be able to endure a series of losing trades in order to see your profitable edge profit out over time. As you gain confidence in your trading method you can then start to develop some rules around it that give you a more rigidity in your trading plan, this allows you to remain calm and follow your rules no matter what the market throws at you.
Once you have developed your rule based system off your market edge you will be well on your way to consistent profits in the forex market. This will not occur over night. Foreign exchange currency trading is not a get rich quick scheme; it can however be a get poor quick scheme. At best it is a get rich slowly scheme, only through consistency will you achieve your long-term goals in the market.
As pointed out above, flexibility is an important part of any trading plan. While developing a rule based system is vital to your long-term consistency in the market, building in some flexibility to your trading plan is also important. The forex market can be extremely volatile at times and no two moments in the market are ever exactly the same. This is why you need to be flexible in your approach to trading the forex market. I agree it seems contradictory to be emphasizing the need for a rule based system to develop consistency and at the same time emphasizing flexibility. Consistency and flexibility are requirements for forex trading success however, part of the reason why so few ever achieve that success.
Our approach to the market needs to be consistent and flexible, thus we need a trading method that gives us a flexible yet consistent view of the market. Forex Price action analysis is the only method I have come across that is inherently flexible yet at the same time can offer you concrete strategies to develop a system around. Price action is simple and effective and will greatly help you in developing the flexible yet consistent approach that forex trading success requires.
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Price Action Strategies in Forex
September 28th, 2009
I am ure there is plenty of currency forex traders out there could use some help with their forex trading and overall trading plan.Dealing with over 100 Students every month, I have come the conclusion that just about every aspiring novice trader attempts to make currency trading more difficult than it has to be, they are basically “chasing their tails into eventual trading failure”.Most of the time, the simple stuff is overlooked, for example : remember the first text book material you once read on basic forex technical analysis methods ? Let me ask, how much of that do you really remember and use in your forex trading? How much study and testing did you actualy put into it? I rest my case, that simple trading methods are widely overlooked in forex trading.
For starters, you should always know where the major directional trend is, and whilst that may actually sound rather obvious, as I said, it’s quite interesting just how many fx traders don’t even look at the larger picture trends on the price charts.
If you are one of those kind of traders who aren’t sure of how to trade with the trend, I’ll give you a little hint: It’s a lot easier to spot when you don’t use indicators, honestly, Indicators are USELESS! there is a simple way to find the trend, and work within it to make great trades, but you wont ever have clarity using the modern day standard indicators, they are not going to give you any clear edge over normal chart observation using price action.
Just think of magial indicators as a kind of shortcut to the market, and we all know that shortcuts are not the way to learn trading! If you want a deep understanding of what it takes to move the market and trade with a high probability trading plan, you are going to have to dig a little deeper than all those lagging indicators and fancy trading systems, you should know that none of that is what really works in trading, there is no easy road here.
You want to be able to look at a chart the same way that most trading purists would, the same way as the hedge fund manager would. So what is the answer? … well to put it in one sentence, ‘you need ia basic bar chart or candlestick chart’
I know you may be a bit apprehensive, but if you look at it with an open mind, I think you’ll be amazed at what you see. The forex market has a natural energy. It has a natural ebb and flow that gives you strong support and resistance areas, not only that but you will soon start to see obvious reversal signals, and candlestick formations, things that are occuring over and over again with precision.
If you know about the history of trading, you should be aware of the fact most traders who have used technical analysis relied solely on price action alone, they certainly did not use indicators like Stochastics, MACD, RSI, etc. To start having any chance of success in forex trading, you must learn to trade using price action, and of course look to surroun yourself with like minded traders and mentors who teach the price action strategies which work.
All the best and good trading.
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Posted in Forex Trading Strategies | 
Tags: currency, forex, Fx, price action, strategies, trading, tutorial, video | 
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Price Action is the Best Way to Trade Forex
August 29th, 2009
Its a shame that more traders are not aware that one of the best trading methods of all time is the art of reading "price action" and "price patterns", widely overlooked by many traders, this strategy to trade forex can be very effective due to its simplicity. I am here to tell you right now, that trading is not about throwing on a pile of indicators or finding a magical trading robot, leave that for the idiots. This makes me want to laugh out loud, what a joke that is. I often feel really sorry for novice traders who throw money at forex scams and con jobs, its simply not the way to educate yourself. These people want to sell you a product and thats it.
to put it as simple as humanly possible. If trading robots were so successful why would Wall Street be paying so much for their best traders. Why would so many institutions be paying back the bail out money because it limit's the amount of pay they can offer their best traders. the answer is obvious isnt it. Are you dreaming? Can a robot really print money.
So to be successful as these traders are we as retail traders need to gain the same kind of edge. How do we do that? Study price action is the simple answer. Knowing this gives the same edge institutional traders have.
To some this sounds difficult however it really is not. There are alot of ways to trade the market, and its taken years for me to figure this out. Its been a while now since I first came across traders using price action, and my trading profits have soared, its clearly the path to profits.
Trading this methof for quite a long time now, my trading gets far better each year, and the more I tweak it, the better it gets for me, my practice and persistant behaviour has helped me get to this stage.
I only spend about 10 hours a week doing it, its less stressful because its typically and end of day trading methodology. This style of trading has made me alot happier.
Want to become profitable enough to replace their full time job, and would like some advice from somebody who has turned the corner to profits. We will now explore how you can quickly start making money trading price action. Price action is not often taught and is closely gaurded by top traders as a secret trading method.
Learn price action, it will be the best thing you will do for your trading success.
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Posted in Forex Trading Strategies |
Tags: best way to trade forex, education., forex, forex method, forex strategy, free forex, how to trade forex, price action, trading, training |
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