Category Archives: Forex Tips

The 2 Most Important Keys to Successful Trading

Examples from Whole Foods Market and Reynolds American, Inc show you what to do (or not) to trade successfully with Elliott Wave

By Elliott Wave International

After 20 years of experience applying the Elliott Wave Principle, Senior Analyst Jeffrey Kennedy says that it remains the one tool that will tell him — down to the tick, to the pip, even to the penny – when his forecast is no longer viable.

That, according to Kennedy, is one of the two most important keys to successful trading:

“Know where you are wrong.”

In his May 8 Elliott Wave Junctures educational video, Kennedy shows subscribers how to acquire that knowledge when revisiting an earlier forecast that didn’t work out. This lesson was adapted from our EWJ service, and also explores the second of Kennedy’s Keys to Successful Trading:

“Don’t pick tops and bottoms.”

See the logic behind Kennedy’s wisdom by reviewing his analysis of Whole Foods Market, Inc. (WFM) and Reynolds American, Inc. (RAI).


My outlook for Whole Foods Market was right and my outlook for Reynolds American was wrong. While price evidence was compelling for both issues, the forecast in WFM was in the direction of the trend and RAI’s incorporated top picking. Here’s what happened:

On May 1, price evidence called for new highs in Whole Foods Market. We had a clearly defined uptrend, a three wave move in the direction opposite the primary trend, and the move to the downside was contained within parallel lines:

Additionally, we had a double closed-key reversal when the low was made, as well as some bullish divergence on the smaller timeframes. Price evidence was very strong that this market would continue to new all-time highs, so my outlook was bullish.

The bullish outlook in WFM required the April low of $81.39 to hold. The trend was clearly up from 2009 into 2013. From an Elliott Wave perspective we knew that this was a countertrend move with an A-B-C structure (a corrective wave pattern within a larger trending market). We had the wind at our back and were not “picking a top.” We simply looked at the price evidence in support of a further rally.

Conversely, the following example in Reynolds America, Inc. did not work out.

On March 22, I anticipated a move to the downside in Reynolds American, Inc. as we had a five-wave decline and a subsequent advance that was a three-wave move. I was looking for a tradable selloff to the downside in wave (C) or wave (3):

Unlike the successful WFA example, I was not trading with the trend. Instead, I was looking for a “top.”

Yet I was able to prevent a losing trade from becoming a devastating trade because I could use the Elliott Wave Principle to “know where I was wrong.”

This bearish wave pattern was viable only as long as prices held below the February high of $45.17.

Once prices exceeded this critical resistance, I knew not to look to the downside – that my outlook was no longer viable:


Learn to Find Opportunities in the Markets You Follow with Jeffrey Kennedy’s 47-page eBook: How to Spot Trading Opportunities

Now’s your chance to discover a whole new way to analyze charts and spot high-confidence trade setups using technical analysis. For a limited time, you can download EWI’s 47-page How to Spot Trading Opportunities eBook for FREE! ($79 value).

Download Your FREE eBook Now >>

This article was syndicated by Elliott Wave International and was originally published under the headline The 2 Most Important Keys to Successful Trading. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

10 Home Truths about Forex Trading

forex chips

The reason why I chose this kind of a headline and decided to write this article is NOT putting people off Forex trading. The major point is to keep the awareness of those aspiring traders who are willing to enter the Forex industry. Think of any job for which two people apply, for instance. Then one of them might be more suitable for it, than the other. Alternatively, even both are not. My point is that you CAN build up a great financial career with Forex and make the profits you want from home.

Well, this article is my receipt and if you want so, my-own-experience-born warning for you as well. Last years I managed to sufficiently increase my income, but I want to show you – the way to consistent profits is thorny. Ok, so here are my truths and my “story.”

1. Forex Trading is not a Lottery

Do not be mistaken to think that the riches will shortly fall on your head with Forex, like those with multimillion national lotteries. Furthermore, trading is far from a casino gambling. Las Vegas scheme of “50%-win chance vs. 50%-lose” should not suit a person who is willing to earn stable profits and do that for living. Of course, you may have heard of a high leverage and its use (you can trade hundreds of thousands of dollars with small capital). However, be more realistic do not hasten to get fortune in a day, but build it point by point.

2. Forex Robots are not 100% Way to Riches

Just Google “Forex robots.” Saw the offers..? “Star Wars” robotic world does not already seem to be so broad, does it? The fact is that Forex robots are everywhere nowadays. They offer you the non-worries trading strategy with constant profits whatever the market conditions are. The truth is that these virtual “cannikins” are mostly not reliable. They may boast with impressive back-testing results, but give you cardinally different ones when you actually start trading them.

3. Most Online Forex Products are Useless

That is more than right for those people who often see any Forex web-stuff, which is offered on a costly basis. Don’t get too disappointed – it’s generally useless. This is why now I am very careful with promoting different products because of the doubtful decency. Here, I want to paraphrase the famous proverb – verify and only then trust (and promote). Having “Business” with unworthy stuff steals your time and your money.

4. 95% of Currency Traders Fail in the Long Run.

Yes, successful Forex traders are rare species, and you must do everything in your powers to get into those 5% who actually make money. No matter, the exact success-failure figures brokers present, most Forex traders fail in the long run. However,… don’t be discouraged! The total number of traders across the globe is huge, and you may be the one to become a part of the “profitable .”

5. Lack of Discipline to Succeed

As not every football-player is sure to become next Pele, not every Forex trader will be profitable. Here success comes as a reward for great deal of discipline. And some claimants for financial happiness just don’t have the level of discipline needed.

6. Working Hard Does Not Mean Success

Yeah, succeeding in Forex and, for instance, getting your body trained with power lifting are two different things. Working hard in trading (“lifting” the charts) gives no guarantee of success. Oh, it may be frustrating. Imagine: your friend reaches profitability in a week or so, and your monthly chart-digging turns useless. That happens.

7. The Intelligence is Not an Advantage

You should not be Marylin Vos Savant with unbeatable IQ of 228 (world Guinness record) to succeed in Forex. Trading currency requires normal person abilities and not immense brain power. Of course, little math knowledge will be of use when you place a trade. However, a “standard” human mind has all the chances to be successful in trading currencies.

8. Forex Trader is a Loner

Not like Sting’s “Englishman in New-York” (he sang “an alien,” I think), but you will be alone when trading. Sitting at home and staring into your computer all day is not a super-agents life. Sometimes loneliness becomes your faithful friend. If your social life is poor, then you are on the right way to closing madness. Although it is fair to admit – working home will never make you late at work because of traffic-jams or snowstorm.

9. There is no Forever Profitable System

Forex is a constantly fluctuating market. And if you think that you finally developed the best system to make profits you should remember: there are no 100% ideal and beneficial systems in Forex. As market conditions have a stubborn ability to drastically change, your system may not be profiting in the following weeks or months. Be adaptable and prepare to adjust your systems according to changes.

10. Hard Times Even For Good Traders

Even a successful trader’s life reminds of a zebra. Its coat-pattern white and black stripes are very symbolic for trading in the currency. The main difference between a pro and newbie is that a successful trader is be able to limit the quantity of black stripes (losses) to minimum, but still he can’t postpone them at all. Therefore, you don’t have to worry if your system is still making money for you.

Article has been created by Alexander Collins, who likes auto Forex trading and makes it profitable for many Forex traders. Also please visit new Alexander Collins’ Forex trading blog, there you definitely find really great articles about Forex trading.

Changing Spread In MT4 Strategy Tester

Hi everyone. Here is an interesting tutorial that I found on a forum (Google search is your friend.) I hope the admin does not mind me reproducing his post available @ http://forexbarometer.com. I hope you find it useful. Here comes the article:

Spread is one of the crucial parameters that might dramatically affect short-time trading systems performance. By such systems we assume TS that hunts for 8-20 pips profits and keeps opened positions no longer than for 1-2 hours.

The big MT4 platform inconvenience is dependence of the spread used in tester from current or last market conditions. For instance, in Friday market closed with 8 pips spread that is twice bigger than usual 4 pips. During weekend, every time we run tester on historical data, it will use the same last known 8 pips spread and we cannot optimize our TS for normal market conditions of 4-5 pips.

One well known solution is editing a spread value in *.FXT binary file used by tester but since MT4 build 210 tester rewrites this file before running a test/optimization process. So, to implement this *.FXT- tweaking technique we must use build 208 or 209. Those versions tester has a “Recalculate” checkbox that allows to prevent binary data file regeneration and keep our spread intact. The older builds might not work with your broker (Old version error in connection window).

Therefore, to begin testing our trading system with variable spread we need:

  • Older TERMINAL.EXE (main MT4) file v.208-209. It’s better to have a complete installation package because older and newer components may be incompatible. E.g. EA compiled in 223 version will crash under 208.
  • Tweaking utility. Generally, it may be any hex-editor like WinHex or special utlility like FXB Tester History Editor (FXB THE). The latter is free for all FXB customers and will be uploaded to common customers’ area next week.
  • TS *EX4 file(s) compiled for used older version (208 or 209). This is a very important issue because any TS will crash on incompatible software unless you have a source code for that and are able to recompile it.

These are test results for Leader family TS performed on IBFX mini-account for period of April 1-10, 2009. Tests made in Saturday, April 11, when market is closed and MT4 keeps last low liquidity market spread of eight pips, that is definitely unacceptable value for both testing/optimizing and trading.

*Note: In Firefox you can right click and select “View Image” to view the full image*

–end of article–

Thanks for your attention. I wish you all profitable trading!

Alan
http://alansforexblog.com

Forex Trading Tips – 4 Tips You Must Understand to Win at Forex

Here are 4 Forex trading tips that if you understand them, can allow you to enter the elite 5% of winners who make big long term consistent profits. Anyone can learn currency trading and win but these 4 points need to understood – here they are…

1. You are Responsible

If you think you can buy success think again, you can’t. Most traders think Forex trading can be done with no effort buy a junk robot with a simulated track record and think they will make the same gains sorry, it’s not that easy. Forex trading sees 95% of traders lose and is not a walk in the park.

While anyone can learn Forex trading, you need to get the right education and skills but first you need to understand what the Forex market and how prices move, which leads to the next point.

2. Understand Markets are an Odds Game

Many traders think you can predict prices and believe so called experts, who say it’s possible. Its not and your predictions will be as accurate as your horoscope if you try. Neither do they move to a scientific theory as many claim; if they did we would all know the price in advance and there would be no market!

You need to understand that winning at Forex, is all about trading probabilities not certainties. You need to understand you won’t win every time and will have periods of losses – but if you always trade the odds, you can make a lot of money. Now let’s look at the type of Forex strategy you need.

3. A Simple System is All You Need

Your Forex trading system should be simple, robust and easy to understand.

Don’t believe anyone who tells you complicated methods are better there not, as they have too many elements to break and science (no matter how clever) won’t help you when you’re trading an odds based market.

Get a simple trading system – it’s easy to do and now we will move onto the final point which is the challenge you must overcome and if you can, you can make huge profits.

4. Discipline is the Key

A method by itself is not enough, you must have the discipline to execute it through periods of losses, until you hit profits again and this can be tough. It’s hard to keep executing your trading signals when the market gives you losses and makes you look a fool. Most traders simply let their emotions and ego get involved and lose.

Being disciplined at all times and employing strict money management, is the key to winning longer term and its not easy but it can be done, if you have confidence in what you are doing and have the right forex education.

It’s Not easy to Win

You can win though, anyone can. The fact it’s not easy to win, means the rewards are huge and you can get your share of them, if you want too.

Forex trading means you have to get the right education have confidence in what you are doing and trade with discipline. Accept this and take responsibility for your actions, and your on your way to Forex trading success.

Source: http://newforexsecrets.com/forex-trading-tips-4-tips-you-must-understand-to-win-at-forex/

Top 3 Forex Trading Tips

If you are interested in trading on the largest financial market in the world, they you need to learn how to get started. Trillions of dollars are traded on the Forex market daily by investors from around the world. Before you begin trading, review the top 3 Forex trading tips listed below.

1. 24 Hour Market– Unlike most traditional investment markets, the Forex market is available to traders 24 hours per day. As the global markets open around the world, traders are able to capitalize on the movements in the value of the currencies. One of the best Forex trading tips is to learn the timing of the market so that you can trade at the most optimal moments.

2. Know your Liquidity Limits– Many Forex brokers offer the ability to trade on margin, giving leverage to traders. One of the top Forex trading tips is to know your limits. Don’t over leverage yourself; be careful to trade within your personal risk tolerance. Ease into margin accounts and ensure that you are fully aware of the upsides and the potential downsides before executing trades.

3. Forex Software– A variety of Forex software platforms exist to enable traders to organize their research, to set trading limits and to capture important reporting information. Traders suggest that one of the top Forex trading tips is to select a software system that is highly rated and that provides you useful, up to date information in an easy to use system.

These Forex trading tips will propel you to the front of the trading world as you begin your financial venture into the currency market. Currency trading is on the rise as millions of people are searching for alternative investment options to the typical investment markets.

Source:  http://newforexsecrets.com/top-3-forex-trading-tips/

Forex alerts are a handy way of staying on top of the market

Because currency exchange covers the entire world and all 24 time zones, forex is a 24-hour-a-day market. This is good in that it results in billions upon billions of dollars of transactions per day. But it also means that forex traders have a constant influx of information to keep track of, unlike the stock market, where once trading closes at 5 p.m., that’s it. So how do forex traders stay on top of things? Most of them use forex alerts of some kind.

 

Forex alerts are available from many online forex brokers and other companies. A forex alert is simply a message sent to the user informing him of the latest developments in the forex market, often recommending action of some kind. These alerts can be sent via e-mail or cell phone text message.

 

The idea behind them is that no one can follow all the markets all the time. Even if you limit yourself to just the “majors” — U.S., Eurozone, Great Britain, Australia, Japan and Switzerland — that’s still 15 currency pairs to keep an eye on. What’s more, sometimes things are steady for long periods of time, while other periods are marked by great activity.

 

The sites that offer forex alerts go about it in one of two ways. Some simply send out alerts every 24 hours, offering the latest info on the forex market. Others send alerts only when something crucial happens. These systems use formulas of their own to determine what constitutes “something crucial,” and they may charge a lot more for their more specific alerts. And of course it’s still up to the individual trader to act on or disregard the information send to him in the alerts.

 

Some brokers include forex alerts as part of their service, while others charge for them. Some are part of a wider alert program that also handles your stocks and bonds. You can tailor the type of alerts you get based on whether you’re a conservative or aggressive trader, and how actively you plan to trade.

 

Serious traders who use forex alerts swear by them. No system is perfect, of course, and a smart trader will always do a little browsing on his own to make sure his latest alert didn’t miss anything. But alerts are an invaluable way for busy investors to go about their daily lives without having to constantly watch the forex rates.

 

That does it for this article. I wish you all happy and profitable tradign.

 

Cheers!

 

Alan

http://alansforexblog.com

8 Tips to Stop Anger & Revenge Trading in Forex

forexrevenge

Making “anger” trades after either having a bad loss or making a bad decision is known to every forex trader, a beginner and a pro. As soon as emotions get a grip of a trader, useless trades are almost inevitable. Anger and revenge trades are so fatal that can wipe out a forex trading account within minutes. How to identify what triggers trader to emotional trading and what is the way to get out of self-destruction pass immediately with a minimal losses?

Emotional trades in forex happen often and whenever a trader looses the control, the account gets wiped out fast.  Even with reliable trading strategy, strict discipline and good money management it is easy to become emotional after making bad choices, start increasing size to make it back, moving stops, averaging down, creating excuses to continue trading, look for opportunities that are not even there.

The biggest problem of all is when it comes to crazy trading, you don’t even know you are doing it! So it is up to you to come with a right technique to snap out of it.

Below are tips on how to stop the self-destruction before it actually began:

1. Take a Break

After three consecutive losses the best thing you can do is to quit trading for a day. Some forex traders even have a “punishment” included in their trading plan: lost a trade, no forex for a week! Forex market is not going to disappear and tomorrow is another day with million forex opportunities. Instead of anger trades, your best option is to take a breath and give yourself a break.

2. Decrease Size

Make a substantial decrease in size traded. This way you will be able to take your mind off serious trading for a while and become sane again.  Give yourself time and go back to appropriate size trading only when you are truly ready.

3. Add Money You Didn’t Win

Consider putting the amount equal to the winning trade you didn’t take in your forex account. To see the money in the account will make you feel better and think rationally again.

4. Add Amount You Lost

If you lost a trade, you might want to add the amount you have lost back to the forex account. It is surprising how easy it is to become normal again when you don’t see your account with losses.

5. Use Visual Effects!

Make a poster or a note which will help you to remember not to make irrational decisions after bad trades. The note will help you to stay rational, take only the trades that you fully understand and pass on all the rest.

6. Trade With Reason

Psychology is one of the most important factors influencing success or failure in forex trading. Make sure that you have right psychological reasons to enter a trade.

7. Be Military Precise

Be disciplined. In fact, be army disciplined! It is important to enter the forex market only when all your criteria are met. This way emotion has nothing to do with your decision to enter a trade.

8. Confess and Talk It All Out

Confess about your losses to someone nearby or even over the net, a fellow forex trader or someone who can understand your pain. Talking helps to free your mind from the negative thoughts about loss and bring you back to reality and objectivity.

Originally written by ForexExplore.

Brought to you by Alan’s Forex Blog:
http://alansforexblog.com

Forex Tips – Avoid Making Predictions in the Market

forexprediction1

Most people make a big deal out of forex market prediction. They think they need to be right 70% or better in order to “pass” the exam that the forex market gives them. They also believe that they might get an “A” if they could be right 95% of the time. The need to predict the market steps from this desire to be right. People believe that they cannot be right unless they can predict what the market is doing.

Among our best clients, I have forex traders who continually make 50% or more each year with very few losing months. Surely, they must be able to predict the market very well to have that kind of track record. Well, I recently sent out a request for predictions and here is what I got back from some of the better forex traders.

Trader A; “I don’t predict the market, and I think this is a dangerous exercise.”

Trader B: “…these are just scenarios, the market is going to do what the market is going to do.”

Ironically, I got these comments from them despite the fact that I was not interested in any of their specific opinions, just the consensus opinion.

So how do they make money if they have no opinions about what they market is going to do? Well, there are five critical ingredients involved:

1.They follow the signals generated by the system.
2. They get out when the market proves them wrong.
3. They allow their profits to run as much as possible—meaning they have a high positive expectancy system.
4. They have enough opportunity so that there is a great chance of realizing the positive expectancy any given month and little chance of having a losing month.
5. They understand position sizing well enough so that they will continue to be in the game if they are wrong and make big money when they are right.

Most forex traders, including most professionals, do not understand these four points. As a result, they are very much into prediction. The average Wall Street Analyst usually makes a large six-figure income analyzing companies. Yet very few of these individuals, in my opinion, could make money trading the companies they analyze. Nevertheless, people believe that if analysts tell you the fundamentals of the marketplace, someone can use that information to make money.

Others have decided that fundamental analysis doesn’t work. Instead, they have chosen to draw lines on the computer or in their chart book to analyze the market technically. These people believe that if you draw enough lines, and interpret enough patterns, you can predict the market. Again, it doesn’t work. Instead, cutting losses short, really riding profits hard and managing your risk so that you continue to survive is what really makes you money. When you finally understand this at a gut level, you will know one of the key secrets to forex trading success. In the meantime, we will continue to make predictions in our column, so that you will begin to understand that they are entertaining, but nothing more!

Originally written by Van K. Tharp PHD

Brought to you by Alan’s Forex Blog:

http://alansforexblog.com