Selling Forex indicators is a comparatively new business as it could only flourish once personal computers and internet became publicly available and affordable to the wide masses. Yet "new" is not the word to focus on from the previous sentence, but "business".
With its virtually immediate commodity liquidity Forex is as close to the ideal market as possible and it is quite obvious that such a facility would appeal to anyone looking to invest their money against an expected ROI of tens, hundreds and even thousands of per cent per year. It is estimated that almost 200 million people are trading on the Forex market and what is not an estimate here is the average daily turnover of already 7 trillion USD!
Well, that is a market that would attract a lot of attention. Merchants can sell virtually anything to the forex traders - virtual private server accounts, forex brokerage services, rebates, forex robots, expert advisors, forex signals, forex managed accounts and of course - forex indicators.
There is nothing wrong with using these indicators, of course. As long as nobody has convinced you to spend money on a particular indicator promising that this is the "Holly Grail" and it will tell you exactly when to open a trade and when to close it. Such "ultimate" solutions are only possible in a world where a perpetuum mobile exists. If it was possible in the first place it would mean that it was possible to foresee the future! Not guess it, but see into it. Guessing is possible, however it is based on statistical dependencies and as such its results are not 100 per cent correct.
What does a forex indicator generally represent? There are thousands of them, all using different methods to recalculate the price action data and present it in another way to the trader - but they all have something in common, and it is that they all run statistical processing of the price action, which is the bar open, bar close, bar high and bar low. Nothing else. Simply a different way to present to you what you already see on your screen when looking at the currency rate chart.
If you still have doubts about, let us dive into another very simple logical reasoning of what was said so far here. If a particular Forex indicator was so capable of foreseeing the future, than why did its inventor started selling it? Selling is always for money and with such a powerful weapon he or she would make any amount of money trading themselves.
Trade wisely, buy nothing on the basis of promises, test everything and question your own motivation as well.
Happy trading!
Article Source: http://EzineArticles.com/6691455
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Thursday, January 31, 2013
For all I know about Forex trading, it is all up to the laws of the big cake...The Forex market has a daily turnover of 3 to 7 trillion USD (that is 3-7 000 000 000 000 USD) and that makes it probably the biggest cake ever. And where the cake is enormous, the crumbs are huge! I have been engaged with forex trading for over 8 years now and I can tell you one thing - it is a business that large that you can not even try to imagine it. For those who have succeeded, it has brough wealth and prosperity, and the other 98% have gone broke, some of them multiple times. What is this little thing that differentiates the Forex pros from everyone else and allows them to achieve what the other 180 million traders simply fail? Some well kept secret, some hidden society? No, definitely not! It is simply the ability to analyze and then implement what conclusions they have reached. And it is not that difficult to come to the following conclusions: - In order to be able to profit from the Forex market, one needs to have established a winning strategy.
A winning strategy is any which brings more profit than loss. Please - losses are inevitable, anyone claiming differently should not be allowed to speak or write on the subject. - How do we establish a winning strategy? We need to be able to test it. And here come the so called Forex Expert Advisors - intelligent software which performs online currency trading using the MetaTrader platform, in most cases without the necessity of any human intervention. This Forex Robots can be back tested using the inbuilt software in Metatrader and here you get the proof out of their performance! The last thing you need to be aware of is that there are tens of thousands commercially available expert advisors on the market and most of them are simply scam... You need to avoid jumping too quickly on the first robot you find in the net. Look for articles and reviews, but mostly try the test pages for forex robots; and again - mind that most testing pages are simply affiliates trying to sell those software published on their sites.
The good thing is however that virtually 99% of those forex expert advisors are sold through clickbank.com and one of the conditions for vendors to use the services of Clickbank is that they offer a 100% no questions asked 60 days money back guarantee, even if it is not mentioned on their webpages! So it is safe for you to purchase any forex robot and if it fails to perform you have 60 days to claim a full unconditional refund through clickbank.com! A safe approach is to always try and get as much information as possible from reliable sources before jumping into action. Read all experts opinion you can lay your hands on but always have in mind that most of these Forex "gurus" are affiliated in one or another way with the products they "review"! Happy trading!
Article Source: http://EzineArticles.com/6461836
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A winning strategy is any which brings more profit than loss. Please - losses are inevitable, anyone claiming differently should not be allowed to speak or write on the subject. - How do we establish a winning strategy? We need to be able to test it. And here come the so called Forex Expert Advisors - intelligent software which performs online currency trading using the MetaTrader platform, in most cases without the necessity of any human intervention. This Forex Robots can be back tested using the inbuilt software in Metatrader and here you get the proof out of their performance! The last thing you need to be aware of is that there are tens of thousands commercially available expert advisors on the market and most of them are simply scam... You need to avoid jumping too quickly on the first robot you find in the net. Look for articles and reviews, but mostly try the test pages for forex robots; and again - mind that most testing pages are simply affiliates trying to sell those software published on their sites.
The good thing is however that virtually 99% of those forex expert advisors are sold through clickbank.com and one of the conditions for vendors to use the services of Clickbank is that they offer a 100% no questions asked 60 days money back guarantee, even if it is not mentioned on their webpages! So it is safe for you to purchase any forex robot and if it fails to perform you have 60 days to claim a full unconditional refund through clickbank.com! A safe approach is to always try and get as much information as possible from reliable sources before jumping into action. Read all experts opinion you can lay your hands on but always have in mind that most of these Forex "gurus" are affiliated in one or another way with the products they "review"! Happy trading!
Article Source: http://EzineArticles.com/6461836
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You have probably been trading on a demo forex account for some time already and it is possible that you have gained confidence - traded different styles, tried different strategies and found a winning one! Earning "profit" of how much - 5 or 20 per cent every week, maybe even every day?
Be careful. Demo trading in Forex is something which is very useful, I should say it is a must for every beginner but it has to be used only for the purposes it is meant to - and that is to evaluate a certain strategy, to put your psychological strength to the test and possibly adjust your trading style. But there is a significant difference between demo trading and live trading, and it is that while testing yourself on the demo version, the "enemy" is not on the battlefield, or in other words - the broker does not care about you!
Live trading has proved to be very different from demo trading - this is something you must have learned by now. This is caused by your broker's behaviour and is absolutely understandable - but is there a way to overcome this discrepancy?
Before answering this question we must first analyze where the discrepancies come from.
One thing is spread - it is sometimes lower in the demo platforms of the brokers and when you start trading live you are being hit with much higher spread on different currency pairs. One of the world's largest forex broker does that, bur of course you will not find it on their webpage!
But the major reason for the lack of consistency between the demo and live performance lies in what is called by different names - "server latency", "delayed order execution" or I would rather call it "hidden spread".
Let me give some more information on this. You see, regardless of whether you trade manually or use some kind of automated software, what happens is always one and the same - your order send command or order close command are sent from your client's terminal to the broker's server. There is no way for you to know what the real delay was between these two. So, once the forex broker's server receives your command, it is processed by a counterpart of your platform which serves only one purpose, and that is to increase the broker's profit! How do they do it? There are multiple strategies that forex brokers implement, but one is the "hidden spread". After all, it is your money that you trade and you only pay the broker a price for every deal you open which is the so-called "spread", or the difference between the Ask and Bid prices.
In the recent years virtually all forex brokers dramatically decreased their spreads thus reacting to the growing competition. But are they playing fair?
No, they are not. And you would better find something else to do if you believed they did.
Every time the forex broker's server receives your command to open or close a position, they "put it on hold". The command is simply not being executed immediately and the broker's software is simply waiting for a short (and sometimes not so short) while just waiting for a better price. Which of course is worse for you. Between your order is sent and finally executed by the broker there may have been a price change of several pips. And that is not in your favour. Well - in order to calculate the real spread, we need to add these several pips to the officially declared spread and we will find ourselves in a situation where we trade with spread levels of 4, 5, 6 and sometimes even more on the EUR/USD currency pair!
What shall we do then? Summon up all traders from all over the world and insist on setting up an international regulation body to oversee the forex brokers? Come on... Do not make me laugh!
Forex brokers do not like "scalpers". Spread levels are a real killer for the "scalpers". So, either forget about scalping and trade on the higher time frames where a couple of pips would not mean much, or change your strategy!
What do I mean by change of strategy? Simple. The above effect may have two sides for the forex broker. If they wait for a short while until the price is better for them and worse for you, this may end up so that they trick themselves and have to accept a price which is better for you!
So, instead of implementing a strategy when you sell when the price is falling and buy when the price is rising, try one where you sell when the price is still climbing and buy when the price is still dropping! This way even if the broker delays the execution of your order, the chances are that in most of the cases it will have a positive effect on your trade, and not negative.
Do not forget that you need to apply this principle to the close of your trades as well - close the short positions when the price is still dropping and close the long positions when the price is still rising.
I hope this advice was useful, and happy trading to all!
Article Source: http://EzineArticles.com/6720829
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Be careful. Demo trading in Forex is something which is very useful, I should say it is a must for every beginner but it has to be used only for the purposes it is meant to - and that is to evaluate a certain strategy, to put your psychological strength to the test and possibly adjust your trading style. But there is a significant difference between demo trading and live trading, and it is that while testing yourself on the demo version, the "enemy" is not on the battlefield, or in other words - the broker does not care about you!
Live trading has proved to be very different from demo trading - this is something you must have learned by now. This is caused by your broker's behaviour and is absolutely understandable - but is there a way to overcome this discrepancy?
Before answering this question we must first analyze where the discrepancies come from.
One thing is spread - it is sometimes lower in the demo platforms of the brokers and when you start trading live you are being hit with much higher spread on different currency pairs. One of the world's largest forex broker does that, bur of course you will not find it on their webpage!
But the major reason for the lack of consistency between the demo and live performance lies in what is called by different names - "server latency", "delayed order execution" or I would rather call it "hidden spread".
Let me give some more information on this. You see, regardless of whether you trade manually or use some kind of automated software, what happens is always one and the same - your order send command or order close command are sent from your client's terminal to the broker's server. There is no way for you to know what the real delay was between these two. So, once the forex broker's server receives your command, it is processed by a counterpart of your platform which serves only one purpose, and that is to increase the broker's profit! How do they do it? There are multiple strategies that forex brokers implement, but one is the "hidden spread". After all, it is your money that you trade and you only pay the broker a price for every deal you open which is the so-called "spread", or the difference between the Ask and Bid prices.
In the recent years virtually all forex brokers dramatically decreased their spreads thus reacting to the growing competition. But are they playing fair?
No, they are not. And you would better find something else to do if you believed they did.
Every time the forex broker's server receives your command to open or close a position, they "put it on hold". The command is simply not being executed immediately and the broker's software is simply waiting for a short (and sometimes not so short) while just waiting for a better price. Which of course is worse for you. Between your order is sent and finally executed by the broker there may have been a price change of several pips. And that is not in your favour. Well - in order to calculate the real spread, we need to add these several pips to the officially declared spread and we will find ourselves in a situation where we trade with spread levels of 4, 5, 6 and sometimes even more on the EUR/USD currency pair!
What shall we do then? Summon up all traders from all over the world and insist on setting up an international regulation body to oversee the forex brokers? Come on... Do not make me laugh!
Forex brokers do not like "scalpers". Spread levels are a real killer for the "scalpers". So, either forget about scalping and trade on the higher time frames where a couple of pips would not mean much, or change your strategy!
What do I mean by change of strategy? Simple. The above effect may have two sides for the forex broker. If they wait for a short while until the price is better for them and worse for you, this may end up so that they trick themselves and have to accept a price which is better for you!
So, instead of implementing a strategy when you sell when the price is falling and buy when the price is rising, try one where you sell when the price is still climbing and buy when the price is still dropping! This way even if the broker delays the execution of your order, the chances are that in most of the cases it will have a positive effect on your trade, and not negative.
Do not forget that you need to apply this principle to the close of your trades as well - close the short positions when the price is still dropping and close the long positions when the price is still rising.
I hope this advice was useful, and happy trading to all!
Article Source: http://EzineArticles.com/6720829
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Forex trading is a tricky business, everyone knows that. First we get attracted to the market by different teasers, spam affiliate mailings, promises that this is it - look no further and that kind of thing. Some people really look no further. They purchase tens or hundreds of Forex indicators and Expert Advisors, subscribe to forex signals and other services without even making an effort to try and understand the real logic behind the Forex market - what forces are driving it and what is logical to expect from it.
Others do better, of course, and start by reading all available internet sources, test what they have learned in practice, read more and test again. They know that probably less than 1% of the information available to the general public is genuine and try to filter this 1% in order to be able to extract the knowledge that is worth having. Sooner or later these people come to the Money Management topic. This is all about what policy to follow in order to determine the lot volume you are to use with your orders.
Generally there are two types of strategies - using fixed lot which means that for each trade you use one and the same amount of money, and lot proportional to your account balance/free margin which means that the lot used is always a certain percentage of your available money - if it grows, so does the lot and vice versa. Both approaches have their pros and cons, that is undeniable. With fixed lot the good thing is that if your account grows with the fixed lot you are effectively reducing the risk to your balance, because the balance is growing and the lot is not - so effectively with every next trade you are using a smaller percentage of your available capital. This is not true when your lot is tied to a fixed percentage of your account balance/free margin - the risk to your capital is always one and the same, so it is crucial that you properly establish your "stop-loss" levels or else sooner or later a loss big enough to take you to a margin call will inevitably come. Yet, I would definitely recommend the second approach, because we are in it for the money, right? If you are good enough at trading, why keep the same fixed lot with every trade of yours?
It all depends on your trading style and appetite of course and the recommended by most Forex pros parameters to use with money management are between 1 and 5% of your available margin on each next trade. Using more than 5% is considered risky for your balance. I would agree if you are using a strategy allowing multiple simultaneous trades, but if you are trading with only one open position at a time, than 5% is definitely limiting your exposure, but also keeping 95% of your capital "dead". You need part of the 95% of course to cover for any periods during an open trade when your position is in the red, but how much? All of it? If yes, than you should not be trading at all - if you have opened a position and kept it open until it was another 90%-95% down, than you should get out of Forex as soon as possible and make better use of your money. If you are not that type of trader who would open such a losing position and keep it open, than you should consider increasing the lot used, otherwise you are keeping most of your balance inactive - so either increase the lot or reduce your capital and make better use of the money.
There are plenty of good examples for nicely programmed Forex Expert Advisors yet one needs to be careful when choosing the right resources and try to always take an informed decision. Good luck with your trading!
Article Source: http://EzineArticles.com/6462845
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Others do better, of course, and start by reading all available internet sources, test what they have learned in practice, read more and test again. They know that probably less than 1% of the information available to the general public is genuine and try to filter this 1% in order to be able to extract the knowledge that is worth having. Sooner or later these people come to the Money Management topic. This is all about what policy to follow in order to determine the lot volume you are to use with your orders.
Generally there are two types of strategies - using fixed lot which means that for each trade you use one and the same amount of money, and lot proportional to your account balance/free margin which means that the lot used is always a certain percentage of your available money - if it grows, so does the lot and vice versa. Both approaches have their pros and cons, that is undeniable. With fixed lot the good thing is that if your account grows with the fixed lot you are effectively reducing the risk to your balance, because the balance is growing and the lot is not - so effectively with every next trade you are using a smaller percentage of your available capital. This is not true when your lot is tied to a fixed percentage of your account balance/free margin - the risk to your capital is always one and the same, so it is crucial that you properly establish your "stop-loss" levels or else sooner or later a loss big enough to take you to a margin call will inevitably come. Yet, I would definitely recommend the second approach, because we are in it for the money, right? If you are good enough at trading, why keep the same fixed lot with every trade of yours?
It all depends on your trading style and appetite of course and the recommended by most Forex pros parameters to use with money management are between 1 and 5% of your available margin on each next trade. Using more than 5% is considered risky for your balance. I would agree if you are using a strategy allowing multiple simultaneous trades, but if you are trading with only one open position at a time, than 5% is definitely limiting your exposure, but also keeping 95% of your capital "dead". You need part of the 95% of course to cover for any periods during an open trade when your position is in the red, but how much? All of it? If yes, than you should not be trading at all - if you have opened a position and kept it open until it was another 90%-95% down, than you should get out of Forex as soon as possible and make better use of your money. If you are not that type of trader who would open such a losing position and keep it open, than you should consider increasing the lot used, otherwise you are keeping most of your balance inactive - so either increase the lot or reduce your capital and make better use of the money.
There are plenty of good examples for nicely programmed Forex Expert Advisors yet one needs to be careful when choosing the right resources and try to always take an informed decision. Good luck with your trading!
Article Source: http://EzineArticles.com/6462845
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