Investing is actually pretty simple; you're basically putting your money to work for you so that you don't have to take a second job, or work overtime hours to increase your earning potential. There are many different ways to make an investment, such as stocks, bonds, mutual funds or real estate, and they don't always require a large sum of money to start.
Get Your Finances In Order: Jumping into investing without first examining your finances is like jumping into the deep end of the pool without knowing how to swim. Luckily, investing doesn't require a significant sum to start.
Learn The Basics: You don't need to be a financial expert to invest, but you do need to learn some basic terminology so that you are better equipped to make informed decisions. Learn the differences between stocks, bonds, mutual funds and certificates of deposit (CDs).
Set Goals: Once you have established your investing budget and have learned the basics, it's time to set your investing goal. A 35-year-old business executive and a 75-year-old widow will have very different needs.
Determine Your Risk Tolerance: Before deciding on which investments are right for you, you need to know how much risk you are willing to assume.
Find Your Investing Style: Many first-time investors will find that their goals and risk tolerance will often not match up. Conservative investors will generally invest 70-75% of their money in low-risk, fixed-income securities such as Treasury bills, with 15-20% dedicated to blue chip equities. On the other hand, very aggressive investors will generally invest 80-100% of their money in equities
Learn The Costs: It is equally important to learn the costs of investing, as certain costs can cut into your investment returns. As a whole, passive investing strategies tend to have lower fees than active investing strategies such as trading stocks.
Find A Broker Or Advisor: The type of advisor that is right for you depends on the amount of time you are willing to spend on your investments and your risk tolerance. Choosing a financial advisor is a big decision.
Choose Investments: Now comes the fun part: choosing the investments that will become a part of your investment portfolio. If you have a conservative investment style, your portfolio should consist mainly of low-risk, income-producing securities such as federal bonds and money market funds.
Keep Emotions At Bay: Don't let fear or greed limit your returns or inflate your losses. Expect short-term fluctuations in your overall portfolio value. As a long-term investor, these short-term movements should not cause panic.
Review and Adjust: The final step in your investing journey is reviewing your portfolio. Once you've established an asset-allocation strategy, you may find that your asset weightings have changed over the course of the year.
So open your Forex account and start investing your money wisely. Remember Forex is a great way to make your money work for you. So don´t wait and change your life style.
Go to http://www.fx-megaforex.com/liveaccount.htm and start making your dreams come true.
miércoles, 27 de enero de 2010
jueves, 21 de enero de 2010
Forex Fundamentals Factors that affect the currencies
Everyone knows that when you trade in Forex you need to take a closer look to fundamentals factors that affect currencies values. Here is a closer look to this fundamentals factors:
Gross Domestic Product (GDP) GDP is considered the broadest measure of a country's economy, and it represents the total market value of all goods and services produced in a country during a given year. Since the GDP figure itself is often considered a lagging indicator, most traders focus on the two reports that are issued in the months before the final GDP figures: the advance report and the preliminary report. Significant revisions between these reports can cause considerable volatility. The GDP is somewhat analogous to the gross profit margin of a publicly traded company in that they are both measures of internal growth.
Retail Sales The retail-sales report measures the total receipts of all retail stores in a given country. This measurement is derived from a diverse sample of retail stores throughout a nation. The report is particularly useful because it is a timely indicator of broad consumer spending patterns that is adjusted for seasonal variables. It can be used to predict the performance of more important lagging indicators, and to assess the immediate direction of an economy. Revisions to advanced reports of retail sales can cause significant volatility. The retail sales report can be compared to the sales activity of a publicly traded company.
Industrial Production This report shows the change in the production of factories, mines and utilities within a nation. It also reports their 'capacity utilizations', the degree to which the capacity of each of these factories is being used. It is ideal for a nation to see an increase of production while being at its maximum or near maximum capacity utilization.Traders using this indicator are usually concerned with utility production, which can be extremely volatile since the utilities industry, and in turn the trading of and demand for energy, is heavily affected by changes in weather. Significant revisions between reports can be caused by weather changes, which in turn, can cause volatility in the nation's currency.
Consumer Price Index (CPI) The CPI is a measure of the change in the prices of consumer goods across over 200 different categories. This report, when compared to a nation's exports, can be used to see if a country is making or losing money on its products and services. Be careful, however, to monitor the exports - it is a focus that is popular with many traders because the prices of exports often change relative to a currency's strength or weakness.Some of the other major indicators include the purchasing managers index (PMI), producer price index (PPI), durable goods report, employment cost index (ECI), and housing starts. And don't forget the many privately issued reports, the most famous of which is the Michigan Consumer Confidence Survey. All of these provide a valuable resource to traders, if used properly.
So, How Are These Used?
Since economic indicators gauge a country's economic state, changes in the conditions reported will therefore directly affect the price and volume of a country's currency. It is important to keep in mind, however, that the indicators discussed above are not the only things that affect a currency's price. There are third-party reports, technical factors, and many other things that also can drastically affect a currency's valuation.
Here are a few useful tips that may help you when conducting fundamental analysis in the foreign exchange market:
Keep an economic calendar on hand that lists the indicators and when they are due to be released. Also, keep an eye on the future; often markets will move in anticipation of a certain indicator or report due to be released at a later time.
Be informed about the economic indicators that are capturing most of the market's attention at any given time. Such indicators are catalysts for the largest price and volume movements. For example, when the U.S. dollar is weak, inflation is often one of the most watched indicators.
Know the market expectations for the data, and then pay attention to whether or not the expectations are met. That is far more important than the data itself. Occasionally, there is a drastic difference between the expectations and actual results and, if there is, be aware of the possible justifications for this difference.
Don't react too quickly to the news. Oftentimes, numbers are released and then revised, and things can change quickly. Pay attention to these revisions, as they may be a useful tool for seeing the trends and reacting more accurately to future reports.
Conclusion
There are many economic indicators, and even more private reports that can be used to evaluate the fundamentals of forex. It's important to take the time to not only look at the numbers, but also understand what they mean and how they affect a nation's economy. When properly used, these indicators can be an invaluable resource for any currency trader.
Gross Domestic Product (GDP) GDP is considered the broadest measure of a country's economy, and it represents the total market value of all goods and services produced in a country during a given year. Since the GDP figure itself is often considered a lagging indicator, most traders focus on the two reports that are issued in the months before the final GDP figures: the advance report and the preliminary report. Significant revisions between these reports can cause considerable volatility. The GDP is somewhat analogous to the gross profit margin of a publicly traded company in that they are both measures of internal growth.
Retail Sales The retail-sales report measures the total receipts of all retail stores in a given country. This measurement is derived from a diverse sample of retail stores throughout a nation. The report is particularly useful because it is a timely indicator of broad consumer spending patterns that is adjusted for seasonal variables. It can be used to predict the performance of more important lagging indicators, and to assess the immediate direction of an economy. Revisions to advanced reports of retail sales can cause significant volatility. The retail sales report can be compared to the sales activity of a publicly traded company.
Industrial Production This report shows the change in the production of factories, mines and utilities within a nation. It also reports their 'capacity utilizations', the degree to which the capacity of each of these factories is being used. It is ideal for a nation to see an increase of production while being at its maximum or near maximum capacity utilization.Traders using this indicator are usually concerned with utility production, which can be extremely volatile since the utilities industry, and in turn the trading of and demand for energy, is heavily affected by changes in weather. Significant revisions between reports can be caused by weather changes, which in turn, can cause volatility in the nation's currency.
Consumer Price Index (CPI) The CPI is a measure of the change in the prices of consumer goods across over 200 different categories. This report, when compared to a nation's exports, can be used to see if a country is making or losing money on its products and services. Be careful, however, to monitor the exports - it is a focus that is popular with many traders because the prices of exports often change relative to a currency's strength or weakness.Some of the other major indicators include the purchasing managers index (PMI), producer price index (PPI), durable goods report, employment cost index (ECI), and housing starts. And don't forget the many privately issued reports, the most famous of which is the Michigan Consumer Confidence Survey. All of these provide a valuable resource to traders, if used properly.
So, How Are These Used?
Since economic indicators gauge a country's economic state, changes in the conditions reported will therefore directly affect the price and volume of a country's currency. It is important to keep in mind, however, that the indicators discussed above are not the only things that affect a currency's price. There are third-party reports, technical factors, and many other things that also can drastically affect a currency's valuation.
Here are a few useful tips that may help you when conducting fundamental analysis in the foreign exchange market:
Keep an economic calendar on hand that lists the indicators and when they are due to be released. Also, keep an eye on the future; often markets will move in anticipation of a certain indicator or report due to be released at a later time.
Be informed about the economic indicators that are capturing most of the market's attention at any given time. Such indicators are catalysts for the largest price and volume movements. For example, when the U.S. dollar is weak, inflation is often one of the most watched indicators.
Know the market expectations for the data, and then pay attention to whether or not the expectations are met. That is far more important than the data itself. Occasionally, there is a drastic difference between the expectations and actual results and, if there is, be aware of the possible justifications for this difference.
Don't react too quickly to the news. Oftentimes, numbers are released and then revised, and things can change quickly. Pay attention to these revisions, as they may be a useful tool for seeing the trends and reacting more accurately to future reports.
Conclusion
There are many economic indicators, and even more private reports that can be used to evaluate the fundamentals of forex. It's important to take the time to not only look at the numbers, but also understand what they mean and how they affect a nation's economy. When properly used, these indicators can be an invaluable resource for any currency trader.
martes, 19 de enero de 2010
How I make money trading in Forex
I had been trading 3 years now and I think is the best business in the world, but at first I had my doubts and disapointments, once I did my job I started making money.
I consider my early losses in Forex nothing but a start up cost that's coupled with any venture you can imagine. Gone forever all my regrets.
One point that I like about the Fx trading business is that you can practice at no cost for as extensive as you want, and one extra thing is that you can accumulate as much information regarding as you can perhaps come to grips with before you leap into this undertaking. Understanding, training and some little start up money is all you need. If you do not hold the latter, or the essential funds to start an account then all you get to do is study to be advantageous in demo account and prove to a wealthy pal of yours to go in dual scheme with you, many are doing this. You control the account for your wealthy acquaintance who's capital is collecting nil but dust someplace even in the bank account your friend's stash would hardly formulate him 5 per cent a year. if you grow to be a victorious Currency trading trader you can brew your buddy this form of profit every solo business day instead of an whole year after you sack yours. A Forex account director is entitled to more than 30 per cent of all proceeds on original invested funds.
You can be trained Forex trading by visiting unbiased assets that provide loads of information in relation to Currency trading all at no charge, you can get the ready demonstrated system or wait until you develop yours.
When I first started I try to find all the information I need to be a successful trader, thats when I found Fx-Megaforex they provided me with all the tools I need to trade. I open my Forex account with $1,000.00 I was nervous, but then I started receiving free forex signals and I can see the membership site where I see the 4 major pairs EUR/USD, USD/JPY, GBP/USD and USD/CHF, in there I saw the pivots, supports and I start analyzing the market, it is a great help that anyone can get. I also received and intoduction Forex course that let me understand better all the Forex basics.
The Conclusion, If you ever thought about having your own business and working from the comfort of your own house, you got to give this a stab, It will not cost you any money to test all on implicit accounts that you can get free from hundreds of Forex brokers All over the world, but you have option to be your own boss in a short time and the attempt on achieving the American desire, stop commuting and throw that dress rules away.
go to: http://www.fx-megaforex.com and start today.
I consider my early losses in Forex nothing but a start up cost that's coupled with any venture you can imagine. Gone forever all my regrets.
One point that I like about the Fx trading business is that you can practice at no cost for as extensive as you want, and one extra thing is that you can accumulate as much information regarding as you can perhaps come to grips with before you leap into this undertaking. Understanding, training and some little start up money is all you need. If you do not hold the latter, or the essential funds to start an account then all you get to do is study to be advantageous in demo account and prove to a wealthy pal of yours to go in dual scheme with you, many are doing this. You control the account for your wealthy acquaintance who's capital is collecting nil but dust someplace even in the bank account your friend's stash would hardly formulate him 5 per cent a year. if you grow to be a victorious Currency trading trader you can brew your buddy this form of profit every solo business day instead of an whole year after you sack yours. A Forex account director is entitled to more than 30 per cent of all proceeds on original invested funds.
You can be trained Forex trading by visiting unbiased assets that provide loads of information in relation to Currency trading all at no charge, you can get the ready demonstrated system or wait until you develop yours.
When I first started I try to find all the information I need to be a successful trader, thats when I found Fx-Megaforex they provided me with all the tools I need to trade. I open my Forex account with $1,000.00 I was nervous, but then I started receiving free forex signals and I can see the membership site where I see the 4 major pairs EUR/USD, USD/JPY, GBP/USD and USD/CHF, in there I saw the pivots, supports and I start analyzing the market, it is a great help that anyone can get. I also received and intoduction Forex course that let me understand better all the Forex basics.
The Conclusion, If you ever thought about having your own business and working from the comfort of your own house, you got to give this a stab, It will not cost you any money to test all on implicit accounts that you can get free from hundreds of Forex brokers All over the world, but you have option to be your own boss in a short time and the attempt on achieving the American desire, stop commuting and throw that dress rules away.
go to: http://www.fx-megaforex.com and start today.
jueves, 14 de enero de 2010
The Most Tradable Currencies
Let's take a look at eight currencies every trader or investor should know, along with the central banks of their respective nations.
U.S. Dollar (USD)
Central Bank: Federal Reserve (Fed)
Sometimes referred to as the greenback, the U.S. dollar (USD) is the home denomination of the world's largest economy, the United States. As with any currency, the dollar is supported by economic fundamentals, including gross domestic product, and manufacturing and employment reports. However, the U.S. dollar is also widely influenced by the central bank and any announcements about interest rate policy. The U.S. dollar is a benchmark that trades against other major currencies, especially the euro, Japanese yen and British pound.
European Euro (EUR)
Central Bank: European Central Bank (ECB). Although the monetary body is somewhat complex, the currency is not. Against the U.S. dollar, the euro (EUR) tends to be a slower currency compared to its colleagues (i.e., the British pound or Australian dollar). On an average day, the base currency can trade between 30-40 pips, with more volatile swings averaging slightly more, at 60 pips wide per day. Another trading consideration is time. Trading in the euro-based pairs can be seen during the London and U.S. sessions (which occur from 2am through 11am EST).
Japanese Yen (JPY)
Central Bank: Bank of Japan (BoJ) The Japanese yen (JPY) tends to trade under the identity of a carry trade component. Offering a low interest rate, the currency is pitted against higher-yielding currencies, especially the New Zealand and Australian dollars and the British pound. As a result, the underlying tends to be very erratic, pushing traders to take technical perspectives on a longer-term basis. Average daily ranges are in the region of 30-40 pips, with extremes as high as 150 pips. To trade this currency with a little bit of a bite, focus on the crossover of London and U.S. hours (6am - 11am EST).
British Pound (GBP)
Central Bank: Bank of England (BoE) A little bit more volatile than the euro, the British pound (GBP, also sometimes referred to as "pound sterling" or "cable") tends to trade a wider range through the day. With swings that can encompass 100-150 pips, it isn't unusual to see the pound trade as narrowly as 20 pips. Swings in notable cross currencies tend to give this major a volatile nature, with traders focusing on pairs like the British pound/Japanese yen and the British pound/Swiss franc. As a result, the currency can be seen as most volatile through both London and U.S. sessions, with minimal movements during Asian hours (5pm - 1am EST).
Swiss Franc (CHF)
Central Bank: Swiss National Bank (SNB) Similar to the euro, the Swiss franc (CHF) hardly makes significant moves in the any of the individual sessions. As a result, look for this particular currency to trade in the average daily range of 35 pips per day. High-frequency volume for this currency is usually pitted for the London session (2am - 8am EST).
Canadian Dollar (CAD)
Central Bank: Bank of Canada (BoC) Keeping in touch with major currencies, the Canadian dollar (CAD) tends to trade in similar daily ranges of 30-40 pips. However, one unique aspect about the currency is its relationship with crude oil, as the country remains a major exporter of the commodity. As a result, plenty of traders and investors use this currency as either a hedge against current commodity positions or pure speculation, tracing signals from the oil market.
Australian/New Zealand Dollar (AUD/NZD)
Central Bank: Reserve Bank of Australia / Reserve Bank of New Zealand (RBA/RBNZ) Both currencies have been the focus of carry traders, as the Australian and New Zealand dollars (AUD and NZD) offer the highest yields of the seven major currencies available on most platforms. As a result, volatility can be experienced in these pairs if a deleveraging effect takes place. Otherwise, the currencies tend to trade in similar averages of 30-40 pips, like other majors. Both currencies also maintain relationships with commodities, most notably silver and gold.
South African Rand (ZAR)
Central Bank: South African Reserve Bank (SARB) Seen as relatively volatile, the average daily range of the South African rand (ZAR) can be as high as 1,000 pips. But don't let the wide daily range fool you. When translated into dollar pips, the movements are equivalent to an average day in the British pound, making the currency a great pair to trade against the U.S. dollar (especially when taking into consideration the carry potential). Traders also consider the currency's relationship to gold and platinum. With the economy being a world leader when it comes to exports of both metals, it is only natural to see a correlation similar to that between the CAD and crude oil. As a result, consider the commodities markets in creating opportunities when economic data is scant.
Now you know which pairs are the most tradable currencies. Remember to be a successful trader you need to take in consideration everything you know about the country, the pair and the economic news.
You still have the opportunity to open your Forex account and receive an Incentive when you fund your account.
Just go to http://www.fx-megaforex.com/liveaccount.htm and you will also have access to our new service Pips911 in all accounts of $1000.00 or more, do it now.
Tenemos toda la información en español.
U.S. Dollar (USD)
Central Bank: Federal Reserve (Fed)
Sometimes referred to as the greenback, the U.S. dollar (USD) is the home denomination of the world's largest economy, the United States. As with any currency, the dollar is supported by economic fundamentals, including gross domestic product, and manufacturing and employment reports. However, the U.S. dollar is also widely influenced by the central bank and any announcements about interest rate policy. The U.S. dollar is a benchmark that trades against other major currencies, especially the euro, Japanese yen and British pound.
European Euro (EUR)
Central Bank: European Central Bank (ECB). Although the monetary body is somewhat complex, the currency is not. Against the U.S. dollar, the euro (EUR) tends to be a slower currency compared to its colleagues (i.e., the British pound or Australian dollar). On an average day, the base currency can trade between 30-40 pips, with more volatile swings averaging slightly more, at 60 pips wide per day. Another trading consideration is time. Trading in the euro-based pairs can be seen during the London and U.S. sessions (which occur from 2am through 11am EST).
Japanese Yen (JPY)
Central Bank: Bank of Japan (BoJ) The Japanese yen (JPY) tends to trade under the identity of a carry trade component. Offering a low interest rate, the currency is pitted against higher-yielding currencies, especially the New Zealand and Australian dollars and the British pound. As a result, the underlying tends to be very erratic, pushing traders to take technical perspectives on a longer-term basis. Average daily ranges are in the region of 30-40 pips, with extremes as high as 150 pips. To trade this currency with a little bit of a bite, focus on the crossover of London and U.S. hours (6am - 11am EST).
British Pound (GBP)
Central Bank: Bank of England (BoE) A little bit more volatile than the euro, the British pound (GBP, also sometimes referred to as "pound sterling" or "cable") tends to trade a wider range through the day. With swings that can encompass 100-150 pips, it isn't unusual to see the pound trade as narrowly as 20 pips. Swings in notable cross currencies tend to give this major a volatile nature, with traders focusing on pairs like the British pound/Japanese yen and the British pound/Swiss franc. As a result, the currency can be seen as most volatile through both London and U.S. sessions, with minimal movements during Asian hours (5pm - 1am EST).
Swiss Franc (CHF)
Central Bank: Swiss National Bank (SNB) Similar to the euro, the Swiss franc (CHF) hardly makes significant moves in the any of the individual sessions. As a result, look for this particular currency to trade in the average daily range of 35 pips per day. High-frequency volume for this currency is usually pitted for the London session (2am - 8am EST).
Canadian Dollar (CAD)
Central Bank: Bank of Canada (BoC) Keeping in touch with major currencies, the Canadian dollar (CAD) tends to trade in similar daily ranges of 30-40 pips. However, one unique aspect about the currency is its relationship with crude oil, as the country remains a major exporter of the commodity. As a result, plenty of traders and investors use this currency as either a hedge against current commodity positions or pure speculation, tracing signals from the oil market.
Australian/New Zealand Dollar (AUD/NZD)
Central Bank: Reserve Bank of Australia / Reserve Bank of New Zealand (RBA/RBNZ) Both currencies have been the focus of carry traders, as the Australian and New Zealand dollars (AUD and NZD) offer the highest yields of the seven major currencies available on most platforms. As a result, volatility can be experienced in these pairs if a deleveraging effect takes place. Otherwise, the currencies tend to trade in similar averages of 30-40 pips, like other majors. Both currencies also maintain relationships with commodities, most notably silver and gold.
South African Rand (ZAR)
Central Bank: South African Reserve Bank (SARB) Seen as relatively volatile, the average daily range of the South African rand (ZAR) can be as high as 1,000 pips. But don't let the wide daily range fool you. When translated into dollar pips, the movements are equivalent to an average day in the British pound, making the currency a great pair to trade against the U.S. dollar (especially when taking into consideration the carry potential). Traders also consider the currency's relationship to gold and platinum. With the economy being a world leader when it comes to exports of both metals, it is only natural to see a correlation similar to that between the CAD and crude oil. As a result, consider the commodities markets in creating opportunities when economic data is scant.
Now you know which pairs are the most tradable currencies. Remember to be a successful trader you need to take in consideration everything you know about the country, the pair and the economic news.
You still have the opportunity to open your Forex account and receive an Incentive when you fund your account.
Just go to http://www.fx-megaforex.com/liveaccount.htm and you will also have access to our new service Pips911 in all accounts of $1000.00 or more, do it now.
Tenemos toda la información en español.
lunes, 11 de enero de 2010
How to develop a Forex Trader Mind
When you talk to successful traders and investors, they will all tell you that there are things about a trade that they know. They have done their homework and honed their skills. If they are technical, then they know the patterns/signals inside and out. If they are fundamentalist, they know how to view it and what to look for.
The bottom line is that they are not afraid of hard work and doing their due diligence.
I was talking with one very successful trader who was sharing a story with us. He said that there was a person who was pursuing him and asking him all sorts of questions. This person indicated that he was very serious and wanted to become his apprentice. So, this trader gave this person his first task. Needless to say, he has not heard from him since.
The moral of the story is that if you want to get the result, you have to put in the work.
So how did the super traders develop their mental edge? Even though they are all different, they share certain beliefs and characteristics:
1. They know their market.
2.They know why they are getting into their positions.
3.They know their risk/reward ratio.
4.They have an expectation to win.
5.They are not afraid of taking losses.
6.They have a set of rules that they follow. They realize that these are dynamic and you have to review it.
7.They have contingency plans.
8.They all have discipline.
9.They do not give up. They have intelligent perseverance.
10.They believe in themselves.
11.They love what they do!
I am often asked, "What is the right system for me and what are the right rules?" My answer is that it all depends on you and what your goals are. No matter what it is, you have to make it your system and your rules. You have to understand your strengths and work with those. If you do not know where to start with your own rules, start with Dennis Gartman's, which are published all over the web.
When you set your rules, do not violate them. Put them next to your computer. Set these rules when you do not need them--when you are calm and not in the heat of the battle. When things go against you, that is the time to look at your rules and use your discipline to follow them up.
You may say, "It is easier said than done." I completely understand.
So how do you create a system to stick with your rules?
1.Make it your own. This is your agreement with yourself.
2. Make a huge sign which says, "I am not talking myself out of my rules"...and put it next to your computer.
3. Have someone to watch your back. When you are isolated, you might not see the entire picture. You need a second set of eyes. A trading coach can be your second set of eyes.
Another challenge that I have noticed is that some traders do not like to hit their stops. Do not be afraid if you hit your stops. That is why they are there. When you are setting your stops, know your risk/reward ratio. Do not put your stop at the point of no return - Do not put it at your maximum tolerance.
If you think you are smarter than the market, markets have a way of showing you that this is not the case and humble you. That is why you need to find the rhythm of the market and work with it.
There is a saying: "Do not see the market as you want to. See it as it is."
Be OK with having draw downs. Know that this is part of the game. If you cannot take any hit, do not even start the game....
Start with a plan. It does not have to be complicated. Markets are dynamic, so your plans are going to be dynamic. You need to learn and adapt. Your plan is used as a template and guideline so you can be a more successful trader.
We are creatures of habit. Notice what you are doing. What works for you and what does not? I have heard people say that they see the patterns in others, yet have a hard time seeing it in themselves - How can you start seeing your own patterns?
One way is by having a review at the end of the day - It is a debriefing of how things went and your thought process. Then you can start seeing your own patterns.
Dennis Gartman said: "Mental Capital Trumps Real Capital: Capital comes in two types; mental and real, and the former is far more valuable than the latter."
Developing your mental edge is about creating habits so you can think without thinking.
Here is to making trading success your habit.
By Nazy Massoud
Remember you need to take action to obtain different results, don´t wait and do your homework. There is no better day than TODAY! Open your Forex account NOW.
The bottom line is that they are not afraid of hard work and doing their due diligence.
I was talking with one very successful trader who was sharing a story with us. He said that there was a person who was pursuing him and asking him all sorts of questions. This person indicated that he was very serious and wanted to become his apprentice. So, this trader gave this person his first task. Needless to say, he has not heard from him since.
The moral of the story is that if you want to get the result, you have to put in the work.
So how did the super traders develop their mental edge? Even though they are all different, they share certain beliefs and characteristics:
1. They know their market.
2.They know why they are getting into their positions.
3.They know their risk/reward ratio.
4.They have an expectation to win.
5.They are not afraid of taking losses.
6.They have a set of rules that they follow. They realize that these are dynamic and you have to review it.
7.They have contingency plans.
8.They all have discipline.
9.They do not give up. They have intelligent perseverance.
10.They believe in themselves.
11.They love what they do!
I am often asked, "What is the right system for me and what are the right rules?" My answer is that it all depends on you and what your goals are. No matter what it is, you have to make it your system and your rules. You have to understand your strengths and work with those. If you do not know where to start with your own rules, start with Dennis Gartman's, which are published all over the web.
When you set your rules, do not violate them. Put them next to your computer. Set these rules when you do not need them--when you are calm and not in the heat of the battle. When things go against you, that is the time to look at your rules and use your discipline to follow them up.
You may say, "It is easier said than done." I completely understand.
So how do you create a system to stick with your rules?
1.Make it your own. This is your agreement with yourself.
2. Make a huge sign which says, "I am not talking myself out of my rules"...and put it next to your computer.
3. Have someone to watch your back. When you are isolated, you might not see the entire picture. You need a second set of eyes. A trading coach can be your second set of eyes.
Another challenge that I have noticed is that some traders do not like to hit their stops. Do not be afraid if you hit your stops. That is why they are there. When you are setting your stops, know your risk/reward ratio. Do not put your stop at the point of no return - Do not put it at your maximum tolerance.
If you think you are smarter than the market, markets have a way of showing you that this is not the case and humble you. That is why you need to find the rhythm of the market and work with it.
There is a saying: "Do not see the market as you want to. See it as it is."
Be OK with having draw downs. Know that this is part of the game. If you cannot take any hit, do not even start the game....
Start with a plan. It does not have to be complicated. Markets are dynamic, so your plans are going to be dynamic. You need to learn and adapt. Your plan is used as a template and guideline so you can be a more successful trader.
We are creatures of habit. Notice what you are doing. What works for you and what does not? I have heard people say that they see the patterns in others, yet have a hard time seeing it in themselves - How can you start seeing your own patterns?
One way is by having a review at the end of the day - It is a debriefing of how things went and your thought process. Then you can start seeing your own patterns.
Dennis Gartman said: "Mental Capital Trumps Real Capital: Capital comes in two types; mental and real, and the former is far more valuable than the latter."
Developing your mental edge is about creating habits so you can think without thinking.
Here is to making trading success your habit.
By Nazy Massoud
Remember you need to take action to obtain different results, don´t wait and do your homework. There is no better day than TODAY! Open your Forex account NOW.
jueves, 7 de enero de 2010
Getting Started in Investing
Today I want to share a question they asked me a lot and I found the peferct answer hope you enjoy it. We still have the promotion when you fund money in your Forex account, but hurry the promotion end Jan. 29, 2010. Details...
Question: I have no experience in the forex market, and I'd like to invest some of my money, but I do not have a clue how to go about it. Can you help me or tell me what to do before I make a move that may ruin my life?
Answer:
I don't know if I can deal with all the issues that might ruin your life -- but let's look at the financial issues.
If you haven't been involved in the forex market, ask yourself how much can you afford to lose, both financially and temperamentally. Yes, I did say lose. The brokerage community usually asks, ``How much do you want to make?'' A silly question, don't you think?
I know I have no limit to the amount I am willing to make. ``Two million, not a penny more,'' you may say. I don't think so.
After you have decided that you are willing to accept the risk of loss, and how much you are willing to risk (even prudent investment has risk), I would advise starting slowly.
Give your investment some time. Don't invest in equities with the intention to pull the money in weeks, months or even less than five years.
When you're more comfortable with the ups and downs of the market, then you can consider increasing your investments and broadening their diversification, again consistent with your risk tolerance.
The worst luck a beginner can have is making a lot of money right away. After that happens, many decide that investments are guarantees, and they invest all they have.
So my advice to you is to invest a little that you can afford to lose. Watch the ups and downs of the market and become comfortable with the volatility while at the same time increase your knowledge in available investment choices and risks.
Over time, you should have a diverse portfolio consistent with your goals, objectives, risk tolerance and tax situation.
by Gary Schatsky is Chairman of the National Association of Personal Financial Advisors (NAPFA). NAPFA
Question: I have no experience in the forex market, and I'd like to invest some of my money, but I do not have a clue how to go about it. Can you help me or tell me what to do before I make a move that may ruin my life?
Answer:
I don't know if I can deal with all the issues that might ruin your life -- but let's look at the financial issues.
If you haven't been involved in the forex market, ask yourself how much can you afford to lose, both financially and temperamentally. Yes, I did say lose. The brokerage community usually asks, ``How much do you want to make?'' A silly question, don't you think?
I know I have no limit to the amount I am willing to make. ``Two million, not a penny more,'' you may say. I don't think so.
After you have decided that you are willing to accept the risk of loss, and how much you are willing to risk (even prudent investment has risk), I would advise starting slowly.
Give your investment some time. Don't invest in equities with the intention to pull the money in weeks, months or even less than five years.
When you're more comfortable with the ups and downs of the market, then you can consider increasing your investments and broadening their diversification, again consistent with your risk tolerance.
The worst luck a beginner can have is making a lot of money right away. After that happens, many decide that investments are guarantees, and they invest all they have.
So my advice to you is to invest a little that you can afford to lose. Watch the ups and downs of the market and become comfortable with the volatility while at the same time increase your knowledge in available investment choices and risks.
Over time, you should have a diverse portfolio consistent with your goals, objectives, risk tolerance and tax situation.
by Gary Schatsky is Chairman of the National Association of Personal Financial Advisors (NAPFA). NAPFA
martes, 5 de enero de 2010
10 Forex Trading Rules
Hi when you trade in Forex you need to keep in mind the next rules so your trading will be much easier. Remember no rule is ever absolute, except the one about always using a stop. These rules work well across a variety market conditions, and will keep you safe.
- Never Let a Winner Turn into a Loser: The FX markets can move fast, with gains turning into losses in a matter of minutes, making it critical to properly manage your capital. You can protect your profits by using trailing stops and trading more than one lot.
- Logic Wins; Impulse Kills: Reason always trumps impulse because logically focused traders will know how to limit their losses, while impulsive traders are never more than one trade away from total bankruptcy.
- Never Risk More Than 2% Per Trade: This is the most common and most violated rule in trading. By setting a 2% stop-loss for each trade, you would have to sustain 10 consecutive losing trades in a row to lose 20% of your account.
- Use Both Technical And Fundamental Analysis: Both methods are important and have a hand in impacting price action. Fundamentals are good at dictating the broad themes in the market that can last for weeks months or even years. Technicals can change quickly and are useful for identifying specific entry and exit levels.
- Always Pair Strong With Weak: Because strength and weakness can last for some time as economic trends evolve, pairing the strong with the weak currency is one of the best ways for traders to gain an edge in the currency market.
- Being Right And Early Means You Are Wrong: If the price action moves against you, even if the reasons for your trade remain valid, trust your eyes, respect the market and take a modest stop. In the currency market, being right and being early is the same as being wrong.
- Differentiate Between Scaling In And Adding To A Loser: The difference between adding to a loser and scaling in is your initial intent before you place the trade. Adding to a losing position that has gone beyond the point of your original risk is the wrong way to trade. There are, however, times when adding to a losing position is the right way to trade.
- What Is Mathematically Optimal Is Psychologically Impossible: Why? Because trading is not logical but psychological in nature, and emotion will always overwhelm the intellect in the end. Conventional wisdom in the markets is that traders should always trade with a 2:1 reward-to-risk ratio, the trader can be wrong 6.5 times out of 10 and still make money.
- Risk Can Be Predetermined; Reward Is Unpredictable: Before entering every trade, you must know your pain threshold. You need to figure out what the worst-case scenario is and place your stop based on a monetary or technical level. Every trade, no matter how certain you are of its outcome, is an educated guess. Nothing is certain in trading.
- No Excuses, Ever: The "no excuses" rule is applicable to those times when the trader does not understand the price action of the markets. It's acceptable to sustain a drawdown of 10% if it was the result of five consecutive losing trades that were stopped out at a 2% loss each. However, it is inexcusable to lose 10% on one trade because the trader refused to cut his losses.
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