Your charting software and your trading platform probably offer you dozens of different currency pairs to trade. Some of these Forex pairs may include your base currency while others may not. Some may be simple, basic pairs you’ve heard of — GBP/USD, GBP/JPY, USD/CHF, EUR/USD and so on. Others maybe look like nonsensical combinations of letters to you. Should you trade exotic currency pairs at all, or should you stick to the more basic pairs? Should you bother with cross currency pairs that don’t include your base currency? Are some pairs better than others? How many pairs should you trade?
Managing Risk in Forex
Thursday, March 1, 2012
How much is too much to risk on a Forex trade? A lot of beginners don’t hesitate to risk a huge percentage of their bankroll on a trade — after all, one of the reasons that many new traders turn to the FX market is that they are able to control more money than they actually have using leverage. The reality though is that professional traders usually risk only a tiny percentage of their bankroll. Even
3 Forex Traits for Success
Monday, February 13, 2012
What does it take to become a successful Forex trader? As a beginning Forex trader, you might think that the answer involves some combination of intellect and a great system — and maybe even luck. While all of these things play a role in Forex success, what you really want to do is rely on luck as little as possible. You can do that by cultivating personality traits which breed success — traits like consistency, patience, and self-discipline. There are some things which are more important than making money in Forex — and those are a few of them. You don’t just want to profit — you want to profit consistently.
Over and Under-Trading in Forex
Tuesday, January 31, 2012
Following a system is a key component of succeeding at Forex, but there is really more to it than that. Your Forex system has to not only work, but be balanced-it has to be something which you can integrate into your real life, and which won’t cause you to trade in imbalanced ways. Two common problems which Forex traders face are under-trading and over-trading. While some Forex traders under- or over-trade because of trepidation, impatience or other psychological factors, many do it because their systems tell them to. How do you fix under- or over-trading when it’s built into your trading system?
How Forex Trading Checklist Can Help You
Sunday, January 8, 2012
You’ve probably read about how a trading system and trading plan are indispensable components of your trading. Indeed, if you don’t have some kind of system or method which tells you when to enter and exit trades — get one. A checklist for trades can be a part of your trading plan. Your trading plan will help you organize when you watch the charts, when you trade, what timeframes you look at, how you manage your money, how you work with alerts and more. While your system probably has your entry and exit rules and target profit and stop-loss rules, it probably doesn’t have a full list of things to keep in mind as you trade. Nonetheless, this needs to be part of your trading plan.
What Statistics Are Important in Forex?
Tuesday, December 27, 2011
When you are testing a Forex system or method, you are testing it to see if it can provide consistent, repeatable profits. The only way for you to see this objectively is through statistical evidence. There is a tendency for new traders to assume that there is one all important statistic which they should work on, but this isn’t a realistic way of going about developing a system that works. Many people think that if they create a Forex system with a high win percentage, for example, they will be profitable. But what if your losses are all huge and your wins are tiny? You might still have a losing system.
What Is Moving Average?
Monday, December 12, 2011
One type of indicator which you'll see time and again as you are learning about Forex is the moving average (MA). Moving averages are lagging indicators—this means they don't predict price direction, but rather are calculated from past prices. There are four popularly used types of moving averages: Simple, Exponential, Weighted, and Smoothed. You will rarely see Weighted moving averages used in Forex, but we'll go over them anyway. Most traders prefer to stick with Simple and Exponential moving averages. The default is to calculate moving averages using closing prices, but you can also choose to calculate using High, Low, Open, Median, Typical, and Weighted prices. You'll be able to choose how to calculate your moving averages in your charting platform, unless you wish to calculate them manually.
How ECN Brokers Work?
Saturday, November 19, 2011
When you’re going to choose a Forex broker, you’ll hear a lot of people talk about the benefits and drawbacks of going with an ECN broker. What’s an ECN broker and what is the difference between an ECN broker and a retail Forex company (market maker)?
What Is Confluence in Forex?
Sunday, November 6, 2011
In Forex, especially while studying technical analysis, you may hear the term "confluence" used in conjunction with trade setups. What is confluence and why should you care about it as a Forex trader?
Avoiding Slippage in Forex
Friday, October 14, 2011
«My Forex broker cheated me. I put in an order at one price and it got filled at another, and now I’m in a losing trade. That’s why I’m losing.»
How often have you heard that story, or been tempted to tell it yourself? One of the many risks of trading Forex is something called slippage. No, it’s not your broker cheating you (well, that’s up for debate, but seriously, don’t make excuses for your lost trades). It’s something you need to be aware of and compensate for during your trades.
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