currency trading system

Finding The Best Trading System For Your Needs

Before you consider trading you need to take some considerations into account. Firstly, you need to determine what your trading personality is and how this will affect the system you work with. To avoid negative trading it is important to utilize a system that is compatible to your emotions.

Finding an appropriate trading system is similar to finding a compatible spouse. If your partner has completely alternative interests and aspirations to you then the relationship is doomed from the start irrespective of how intriguing the person is.

Without undergoing too much analysis and completing too many personality profile tests, you just need to ask yourself one question: what will make me react more aggressively – many small and frequent losses or irregular substantial losses? This will assist in defining which trading system is most suited to your personality and for your needs.

There are two types of trading systems available. The first is a system featuring more frequent losses than gains; however the gains will be greater than the losses. The second type of trading system presents consistent, yet small gains with few losses; however, these losses are substantial and will eliminate many gains. Of course, you will find that the profits and losses will be of different sizes; but it must be remembered that no system will be in the middle of this gray scale – it will always be skewed to one or the other side.

The practical question to determine which trading system is best for your needs looks at which extreme causes more anxiety: a large amount of wins, but with large losses; or large losses with greater amounts of wins. It has been noted that the majority of other features in a trader’s profile do not apply to these practical situations.

One of the most critical components to consider when finding the most appropriate trading system is that of system trade expectancy. The majority of traders feel that having a high risk/reward ratio leads to successful trading, however this is not so. In order to be successful you must have positive expectancy and expect a positive gain from each trade you complete using your trading system.

System trading expectancy is calculated using historical data of all trades completed. This is done by multiplying the average historical loss by the losing percentage, then subtracting that number from the average historical profit multiplied by the profit percentage.

To clarify, the system trading expectancy formula is as follows:

Expectancy = Average Gain (% of winning trades) – Average Loss (% losing trades)

The primary purpose of this system trading expectancy formula is to identify how much can be made on a trade using a particular sample size of trades. To encourage future trading, the result should be (ideally) positive and of a large amount. It should also be noted that this formula can be applied to binary trading options.

online trading shares

The Advantages Of Trading Shares Online

People now do not need to go to a brokerage house in order to buy and sell shares of stock. There are numerous online broker where anybody can trade with probably more tools at their disposal than ever existed to the public at large in all of the history of the market.

All of the brokerages have online trading platforms, and they have great tutorials to go along with them. Even a complete novice can go to an online trading site, and learn how to trade just from going through the site’s tutorials.

If you have never bought or sold stocks, mutual funds, ETF, or traded in options, it is recommended that you go through the tutorials completely before trading.

The companies even have practice time, where you can play the real stock market, but with paper money. In other words, you invest in stocks, but it is like a computer game where you don’t really risk any of your own money, just the play money in the computer. But, in this way you learn how the system works and you see how a live market works.

Online trading gives you a variety of tools and research resources. The idea of vesting in stocks is that you are investing in a company that is hopefully going to do well and make a profit. If that happens the value of the stock will rise over time from the amount that you paid for it. This is called the buy and hold strategy, where the result takes a while for the stock to rise.

The other strategy, trading may only last for a day or two, or even and hour or two. The trading platform will have tactics and strategies all worked out for each stock, and if a person follows the directions for those programs, you can do pretty well.

The computer does quite a bit of research for you based upon your objectives, risk tolerance, and so on. It will do a certain amount of research to find out the history of the company and how its stock reacts under certain conditions. Of course stocks react in relation to how many other investors are buying or selling the stock, but there are other situations that can affect the movement of the stock as well.

Some of the factors that affect the movement of the stock can come from the political environment, the overall financial market, and any special events that might occur in that particular stock’s sector. As an example if you invest in a dog food stock, and suddenly there is a recall of several brands of dog food, your stock might take a tumble until the situation is cleared up.

The nice thing about trading your shares of stock online is the convenience. You can be online all the time and make your trade any time that you wish, but the trade won’t actually be placed until the market is open the next day.

Another nice element is that you can start out small and pace yourself until you learn more and can start trading in larger amounts.

trading forex

How To Trade Forex – What You Should Know to Get Started

Forex is considered to be the largest financial market in the world. However, until recently it was unfamiliar to retailer traders. Before having an internet connection became commonplace, the only people who traded FX were large financial organizations, hedge funds and corporations.

Why is Forex Different From Other Markets?

Unlike other trading options, Forex does not have a central governing body. Members trade with one another based on credit agreements. When push comes to shove, the most liquid market in the globe relies on not much more than a metaphorical handshake. Listed below are a few other ways in which Forex trading is different from stocks, futures and options.

  • There is no uptick rule.
  • There are no limits on the size of the trader’s position.
  • Insider trading does not exist in the Forex market.

Understanding Common Forex Ideas

The following is a list of forex ideas that new traders must become familiar with:

  1. FX firms are called “dealers” not “brokers”. Unlike a broker, a dealer assumes market risk by being a counterparty to a trade.
  2. FX does not have commission. Instead, dealers make their money through bid-ask spreads.
  3. In the FX market, currencies always trade in pairs. The terms “short” and “long” are commonly used in this scenario.

How to Trade Forex

Trading Forex is a lot more difficult than it may seem. Beginner traders lose thousands of dollars because they are unaccustomed to the trading process. For this reason, newbie traders should learn all that they can about the FX market.

The simplest way to do this is to sign up for a Forex trading platform and read the manual guide. Most FX websites call themselves “brokers”.

These sites have software that traders can use to practice trading. This software emulates the FX market in real-time. In short, users can hone their skills on a fake (albeit realistic) marketplace with “paper money”.

Most newbie traders use this software for at least 6 months before they start trading real cash. For many people, this will sound like an excessively long time to go without making any real trades.

Unfortunately, people tend to lose money when they do not know the FX market inside and out. Investors can save themselves a lot of trouble by spending time on practice software. Doing this will lessen the odds of making mistakes simply because the investor did not know how to place good trades.

The FX market is a great investment. Many people around the world have made their fortune on Forex. That being said, FX is not for everybody. High returns means high risks. People who are not prepared to lose their investment may be better off with low risk investment options such as bonds, savings accounts and retirement plans.

fx market

Is Trading Forex For You? A Look Into The Different Types Of Investor Personalities

Trading in the forex market can be profitable but not without its risk, and like anything else, although the market welcomes everyone, it’s definitely NOT for everyone.

What we mean is that forex trading has inherent risks that might be exciting for some but unbearable for other people. So, is forex trading for you? Well, that really depends on your investor personality. There are actually three investor archetypes. Understanding each personality can give you insights on whether or not forex trading is right for you.

The first type of investor personality is the analyst:

The analyst is the type of investor who will analyse all the implications of his decisions before investing a single cent. The best example of this type of investor is Warren Buffet.

The second type of investor is the trader:

Having a trader-type investor personality means you are decisive but don’t necessarily rely on complete information to make a decision. This type of investor relies more on his gut feelings. George Soros comes to mind when it comes to this personality.

The third type of investor personality is the actuary personality:

Like an actuary in an insurance company, this type of investor is focused on an outcome and not concerned with one single event. Think Benjamin Graham.

If you ask us, we think that the best type of personality for forex trading is a combination of the analyst and trader personality.

Although it’s been compared to gambling, you can actually lessen your risk of losing a lot of money in forex trading by analysing how certain factors, like a change in national policy, affect the movement of a currency, whether it’s for better or for worse. On the other hand, you can’t always predict how the market is going react to certain events. Sometimes you will need to rely on your gut instinct to predict the markets.

If you’re interested in trading in the forex markets, you can and you should, however, you should only do it with money you can afford to lose. Unlike the stock markets, forex trading has a low entry point. You will only need $200 to get started. If you ask us, however, we think you should try the demo accounts first before trading with real money. That way, you will only learn more about how the market works without actually trading real money.

There are many ways to earn money from forex trading. You can buy a currency pair right now, when the base currency is low, and hold it for the long term and only sell it when base currency rises in price. You could also hold your currency pair for a short time, i.e., a few hours, and sell just at the right time. Whatever strategy you take, however, there’s no escaping the need to make an educated guess.

A lot of traders many years before they master forex. So don’t it to be a walk in the park. Safe trading and trade well!

forex money

6 Top Reasons Why Forex Traders Fail

Apparently, the forex market is the biggest and most accessible financial market in the world. There are quite a number of forex traders, but only a few are truly successful. Traders, like in other asset classes, fail for many obvious reasons. In addition, trading forex usually requires high leverage – usually to increase the potential return on investments, makes it a high risk investment.

Other factors specific to the trading currencies may also result to higher expectations for returns than the market can actually offer. At times, even, traders may be prompted to take more risks that they would not take when undertaking other investments. That said here are some of the top reasons why forex traders fail.

1. Lack of trading discipline

The biggest mistake a forex trader can make is to let his/her emotions get in their way. In this trade being successful means achieving some few big wins while still suffering many smaller losses. When experiencing consecutive losses, it`s important to keep your cool, trying to beat the market only leads to more losses which eventually drain you out.

2. Failure to plan

Planning is important in order to achieve success not only in forex trading but also in every other trade. That is why unsuccessful forex investor are oftenly those who fail to work within a documented plan. The plan should above all include some risk management guidelines as well as the specific return on investment expected. Failing to stick to the laid out plan leads to massive continuous losses.

3. Greed

Yes, I said it. Some investors feel that they have to squeeze every last pip out of a move. There are huge chucks of money in the forex markets every day. And trying to clutch every last pip before a currency pair turns usually sets many traders to lose the profitable trade that they are sitting on.

4. Failure to adapt to the market

Again this trickles down to planning. Creating a plan for every trade like carrying out scenario analysis or planning your moves and counter moves for all potential market situations is important. It is the only sure way to reduce the risks of large and unexpected losses. Knowing the market well also helps a trader to be in a better position to modify their strategies with market changes. It also helps to be more flexible in establishing new and creative ways to profit from the evolving market.

5. Having unrealistic expectations

Many people enter into forex trading thinking that it is a get-rich-quickly scheme. Quite far from the truth, accumulating profit comes not as a sprint but a marathon. A lot of effort and mastery of a number of strategies is required. Most of the traders who have failed are unable to manage their capital. Risking more than it is warranted and fore going trade discipline for gambling only leads to much more losses.

6. Not learning from past experiences

Unsuccessful traders almost all the time ignore the important cues presented by the market. Failure to learn from own past success and failures as well as those of other successful traders has put many of investments on the line.

Remember, there is no such thing as free lunch in the forex market. So work your way up slowly but sure of you steps. Build your own capacity to make more informed decisions and more importantly, work diligently to learn with every trade.

cfd trading picture

CFD Trading Explained & Made Easy

CFDs are products called derivatives that allow trading on the market movements of live markets without actually taking ownership of the underlying securities on which the contract is based. “CFD” means contracts for difference.

The future movement of market prices can be speculated upon whether the underlying markets are rising or falling. An investor can sell short, allowing a profit from falling prices, or buy long, to hopefully profit from a rising market.

There are over 10,000 markets in which trading can take place, so there is plenty of exposure to markets that may not have been accessed previously.

CFD’s can be used to hedge against loss in any portfolio, by selling short, for example. If you have taken a long position in a security, and you feel that it is going to lose value, you can take a short position in a CFD and if the security loses value, your short position with the CFD will offset some or all of the loss.

Most CFD trading platforms offer 24/7 trading opportunities, allowing customers to trade at any hour of the day, whenever they feel like it. If you are travelling, or at home, you can have access to your account in order to make a trade.

The CFDs are traded on leverage, which means that only a fraction of the total price is required when trading CFD. As an example you could trade a certain number of shares of a CFD, with a margin deposit of only 5%.

The leverage can be used to maximize the profits and your return on your investment because you are only putting down a fraction of the required price. By the same token, you stand the chance of losing far more than the money that you are putting up for the trade. The profit or the loss is magnified way over the amount of your actual investment in the trade.

CFDs were originally used by hedge funds because of the relatively small amount of capital required to do a deal. Plus the fact that no physical shares were required to change hands, made the transactions easy to work, and work in great quantities. The derivative market was made available to the retail market in the late 1990′s.

Trading in CFDs is a fairly complex and sophisticated operation, and the propensity to gain or lose great sums of money very quickly is not a pastime for the faint-hearted. Only those with the financial capability and the knowledge and experience in CFD’s should engage in this type of transaction.

How to Choose a Forex Broker

How to Choose a Forex Broker

Due to lack of a central marketplace for the forex market, traders need to select a broker that will help them conduct their trading activity. The number of brokers has drastically shot up over the few years and choosing the right one requires a well calculated move. Here is a simple guide on how to choose a forex broker.

Step 1: Do your research

You need to first have a list of what you require from a broker and what you may want but can do without. You should ask yourself a few hard questions and here is a list of some of the things you need to look for in the process of identifying a right broker.

i. Regulatory compliance. You should always check the broker’s regulation status before opening a trade account. If for example a trader is headquartered in Europe then he/she should be registered with the relevant regulatory body there. Traders are advised not to trade with non-regulated brokers since such brokers are the source of Forex trading scams. Trading with a non-regulated broker leaves you with little if any legal protection from fraud.

ii. Trading platform. This is the investor’s portal to the markets. Traders ought to make sure that the trading platform is visually pleasing, easy to use, there is ease of entry and exit of trades and a variety of technical analysis tools. The trading platform needs to be user friendly and intuitive.

iii. Broker types and their commissions or spreads. There are two main types of brokers that one can deal with when trading forex. The first model is the dealing desk while the second one is the non-dealing desk broker. Brokers make money through commissions and spreads. A broker that uses commissions will most likely charge a specified percentage of the spread. Other brokers will however charge no commissions but instead make money with wider spreads.

iv. Leverage offered. Leverage is a loan that is offered to margin account holders by their brokers. Leverage works in the traders favor since a potential for profit is greatly enhanced. Leverage should always be used with caution.

Step 2: Compare brokers

Once you come up with a list of what you require from a broker, comparing a few that you have rated highly is the next step. There are broker comparison tables out there but getting one with all the features you wanted can be pretty hard. Find several brokerages that meet most if not all of your requirements and compare them. I did a review on Plus500 and Avatrade.

Step 3: Open demo accounts

After identifying the more promising brokers, open demo accounts with them and get to know their trading platforms. Demo accounts do not perform exactly the same way as live accounts but will help you familiarize with the various trading platforms offered. There may be small differences in slippage and speed of execution. Trading on a demo is a wonderful way of knowing how good the broker’s customer service is. If you feel you are good to go, you can then move on to a live account and start off small to test the waters to see if the broker will suit your trading needs.

>> This proven trading system and ongoing mentoring will quickly transform you into a profitable trader by up to 326%!

Bitcoin Trading

Bitcoin Trading – Tips & Information At a Glance

Bitcoins and crypto currency are all the rage these days, and you may be wondering why. These terms are used to identify currency units that are not backed by any material counterpart.

The bitcoin travels from virtual wallet to virtual wallet, and every transaction is encoded within the bitcoin so that its history is traceable. More than 10,000,000 bitcoins exist now, and this number is expected to double within the next three decades.

Unlike some other forms of virtual currency, attaining bitcoins is open to anyone who wants to invest some time and work into getting them. Bitcoins are minedMining is the process of adding transaction records to Bitcoin’s public ledger of past transactions

They are awarded in lots of twenty five, and an algorithm continues to increase the difficulty of the puzzles to be sure that bitcoin stock declines progressively to drop by 50% every four years. This helps prevent a glut of bitcoin mining. Because they are designed to be hard to get and scarce, bitcoins are much sought after and very popular.

An interesting side effect of the extreme challenge of attaining bitcoins is that people who seek to mine them have learned that working cooperatively yields better results than working competitively.

Bitcoins are better than regular money in a lot of ways because they are indestructible and with just a little computer know-how, they can easily be stored online and protected from theft. Using them to perform a number of regular online transactions is free or costs very little.

Additionally, bitcoins can be traded against traditional money, and people holding bitcoins can become bitcoin dealers free of charge. Another perk of transacting and trading in bitcoins is that it can be anonymous. This makes online payments safer, and is very attractive to people wishing to buy and sell exotic services online.

Because bitcoins are very like actual money, it should only be a matter of time before they become a competitive form of currency for trading in the real world. After all, it is easy to divide them into lesser denominations; they are easy to store safely and affordably; they are easily recognized but can’t be counterfeited; they never degrade or decay.

As more and more people around the world become computer savvy, and online bitcoin trading and purchasing becomes more common, the use of bitcoins is inevitable. At the moment, using them in actual trading in the real world is not possible because vendors’ point of sale systems have no way to recognize or acknowledge them. With more and more point of sale systems becoming linked to the virtual world; however, it would seem that using bitcoins and cash interchangeably is a reasonably foreseeable change in the near future.

Even though bitcoins may very well become a mainstream form of currency, they will probably not replace actual cash. Let’s see the development in the new few years. It will be crucial

>> This proven trading system and ongoing mentoring will quickly transform you into a profitable trader by up to 326%!

binary options reasons

6 Reasons Why You Should Trade Binary Options

Here are some simple reasons why you want to look into trading binary options:

1. They are easy to understand

They have easy “yes” and “no” propositions. Their pricing is intuitive. No matter what point, the binary price is just the perception of the market’s likely percentage that the contract settles with a “yes.” You can work this out based on how the pricing of these options, which will be thoroughly clarified in this article.

2. They have small contract sizes

When they get ready to expire, every lot can settle at $0 for “no” and $100 for “yes.” You need an amount below $100 for maximum collateral. Usually, it is much less. You cannot ever lose more than the collateral.

3. There is also a strict limited risk

You cannot at any point price contracts outside of that $0-$100 range, no matter what the underlying market’s volatility is. You must always be aware of the absolute worst-case amount you can risk for the positions you choose no matter if the contract is short or long.

4. Binary options also have multiple markets

This lets you surmise on a variety of asset classes and markets online and with a small minimum deposit. You may also use these binary options for determining numerous economic data released outcomes that would usually be tough for retail traders to figure without using binary options.

5. They also have interesting price behaviors near expiration

Because these options are binary, their behavior when nearing their expiration date differs greatly from other trading options. If this is used wisely, you could exploit some intriguing trading methods.

6. The markets for binary options stay open until they expire

You can place your orders to get in and out at any binary position numerous times as you watch the market fluctuate. While there are “everything or nothing” payouts, you are not limited to strategies like that since you have the option to trade in or out of a contract any time before they expire.

>> This proven trading system and ongoing mentoring will quickly transform you into a profitable trader by up to 326%!

money edge

Finding Your Edge in Binary Options Trading

Just as with all instruments, when trading binary options, you need to find an edge in the market and create a system around it. However, unlike many instruments, binary options allow for many different types of trades. As you know, you can use binary options to speculate on ranges, breakouts, economic events, and all other kinds of trades.

Finding an edge is certainly not easy to do. To make things even more interesting, finding an edge is not the Holy Grail; another key component is risk management and online trading psychology. These components are so intertwined that neither one can be mentioned without the other. And both of these components can be your worst enemy if they are not properly used. Having said that, if properly used, they can also be your best friend.

It has been hypothesized that, with proper risk management, a simple system like flipping a coin to buy or sell could be successful. However, having even the slightest edge should enhance your chances a great deal. An edge is something that will make you more money than you lose over a big enough sample size of trades.

You can take advantage of your edge by trading it manually, or you can create an algorithmic system to trade your edge. What’s most important is that you make money in the long run.

A perfect example of this is the game of blackjack. The house has a very slight edge, less than 2 percent. But by repetitive play, they consistently end up profitable. This is because they have a set approach, an edge, and they don’t get emotional when a player goes on a winning streak. Good traders put themselves in the position of a casino.

To begin, one needs to calculate a system’s expectancy, develop trading and risk management rules, and follow those rules religiously to generate profits. Because most systems have life cycles, it is very important with any system to create a reevaluation point. This is a point where the trader starts to question the system’s effectiveness and begins to look for other systems that he expects to be profitable.

The reevaluation point should be decided upon before trading begins. It should be based on the back-tested data, and take into account concepts that will be discussed such as a drawdown, consecutive losing sessions, and reward/risk ratio. The next sections will cover these concepts in greater detail. The key is to develop and utilize a system that fits your trading style and personality.

>> This proven trading system and ongoing mentoring will quickly transform you into a profitable trader by up to 326%!