Forex Trading System: Choosing the Right System
by Harold Hsu
There are many Forex trading systems available for purchase online, and many traders are confused about which one is the best. In this article, allow me to explain how to choose the best trading system for you.
3 Things To Know
When looking for a good trading system to follow, it's important that:
1) You understand the logic behind how the system works
2) The system has an actual, consistent positive trading record
3) You're comfortable with the system / You like the system
These 3 criteria are generally in order of importance. Notice how the most important factor is that you understand how the system works. Many traders purchase trading system after trading system without understanding the reasons behind how they work.
These traders are looking for a magic pill that doesn't exist in reality. The moment one trading system starts to lose in a few consecutive trades, these traders will move on to the "next big thing" and buy another different system.
The truth is that if you understand the logic behind a good system, you'll understand that there will be times when such a system will occasionally fail. The important thing is to remember that on the overall, many systems will give you a positive profit at the end of the month. It is not these systems that fail: it is the undisciplined traders who don't understand their systems (and thus give up) that fail themselves.
As the saying goes, "A good trader will take an average system and make money with it. A bad trader will take a great system and still lose money with it". The key is in understanding how a system works, and having the discipline to stick with it when the going gets tough.
Once you understand how a system works, it's also important that you agree (and like) the logic behind it. If you don't like it, chances are it'll be even harder for you to be disciplined when following it.
One more thing that many traders overlook when purchasing a trading system, is the ACTUAL track record. Many scam sites out there use hypothetical (or back-tested) results to lure ignorant traders into buying their "trading systems". Always ask for an actual track record (i.e. traded with real money) and don't fall for those "in August, this system would have made $XXX!"-type of claims. You shouldn't care about how much the system "would have" made, you should care about how much it DID make!
แสดงบทความที่มีป้ายกำกับ Fundamental Analysis แสดงบทความทั้งหมด
แสดงบทความที่มีป้ายกำกับ Fundamental Analysis แสดงบทความทั้งหมด
วันเสาร์ที่ 26 มกราคม พ.ศ. 2551
วันพุธที่ 16 มกราคม พ.ศ. 2551
Why do Forex Trading?
Why do Forex Trading?
by Don Spanish
Why do Forex Trading?
The cash/spot FOREX markets have certain unique attributes that offer an unmatched potential for profitable trading in any market condition or any stage of the business cycle. It leaves one to wonder why bother in the first place? The answer to that is very simple. Forex trading offers people who trade:
A 24-hour market: A trader has the chance to take advantage of all of the profitable market conditions at any time; which means that there is no waiting for the start like the New York Stock exchange.
Highest liquidity Possible: The FOREX market is the most liquid market in the world. That means that a trader can enter or exit the market whenever they want during almost any market condition minimal execution barriers or risk and no daily trading limit.
High leverage: It has a leverage ratio of up to 400 is normal when compared to a leverage ratio of 2 in the equity markets. Of course, this makes trading in the cash/spot forex market awkward a swell because it makes the risk of the down side loss much higher in the same way that it makes the profit potential on the upside much prettier.
Low cost per transaction: The retail transaction cost is actually less than 0.1% under the normal market conditions. At larger dealers, the spread could be less than 5 pips, and may expand a great deal in fast moving markets.
Always a good market: A trade in the FOREX market means selling or buying one currency against another. In essence, a bull market or a bear market for a currency is defined in terms of the outlook for value against other currencies. If the outlook is positive, you get a bull market where a trader profits by buying the currency against other currencies.
Inter-bank market: The foundation of the FOREX market consists of a global network of dealers that communicate and trade with their clients through electronic networks and telephones. There are no organized exchanges like in futures that are there to serve as a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets.
No one can corner the market: The FOREX market is so large and has so many participants that no single trader, even a central bank, can control the market price for an extended period of time.
It is not completely Unregulated: The FOREX market is seen as an unregulated market although the operations of major dealers like commercial banks in money centers are regulated under the banking laws.
For the average person who is willing to get into forex trading, this market is just a better bet. With it being so wide open like it is, you have a higher gross potential than with any other trade type.
by Don Spanish
Why do Forex Trading?
The cash/spot FOREX markets have certain unique attributes that offer an unmatched potential for profitable trading in any market condition or any stage of the business cycle. It leaves one to wonder why bother in the first place? The answer to that is very simple. Forex trading offers people who trade:
A 24-hour market: A trader has the chance to take advantage of all of the profitable market conditions at any time; which means that there is no waiting for the start like the New York Stock exchange.
Highest liquidity Possible: The FOREX market is the most liquid market in the world. That means that a trader can enter or exit the market whenever they want during almost any market condition minimal execution barriers or risk and no daily trading limit.
High leverage: It has a leverage ratio of up to 400 is normal when compared to a leverage ratio of 2 in the equity markets. Of course, this makes trading in the cash/spot forex market awkward a swell because it makes the risk of the down side loss much higher in the same way that it makes the profit potential on the upside much prettier.
Low cost per transaction: The retail transaction cost is actually less than 0.1% under the normal market conditions. At larger dealers, the spread could be less than 5 pips, and may expand a great deal in fast moving markets.
Always a good market: A trade in the FOREX market means selling or buying one currency against another. In essence, a bull market or a bear market for a currency is defined in terms of the outlook for value against other currencies. If the outlook is positive, you get a bull market where a trader profits by buying the currency against other currencies.
Inter-bank market: The foundation of the FOREX market consists of a global network of dealers that communicate and trade with their clients through electronic networks and telephones. There are no organized exchanges like in futures that are there to serve as a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets.
No one can corner the market: The FOREX market is so large and has so many participants that no single trader, even a central bank, can control the market price for an extended period of time.
It is not completely Unregulated: The FOREX market is seen as an unregulated market although the operations of major dealers like commercial banks in money centers are regulated under the banking laws.
For the average person who is willing to get into forex trading, this market is just a better bet. With it being so wide open like it is, you have a higher gross potential than with any other trade type.
วันพฤหัสบดีที่ 13 ธันวาคม พ.ศ. 2550
A Novice Forex Traders Guide To Fundamental Analysis
A Novice Forex Traders Guide To Fundamental Analysis
by Monica Hendrix
If you are new to forex trading you have access to a lot of fundamental analysis as the click of a mouse from banks brokers and news wires you can look at and trade upon it - let's look at forex fundamental analysis and how to use it.
A forex trader, who makes trades based upon fundamental analysis, will look at the supply and demand situation in relation to the currency studied, and try and predict the impact of the various factors on its movement and they include:
* Economic growth and economic policy
* Interest rate outlook
* Balance of payments
* Employment
* Trade deficit
* Political Factors
To name but a few but there is a problem when trying to use fundamental analysis:
The facts are there for all to see but price is ultimately decided by millions of different opinions such as you and me and we all draw our own conclusions from the facts and numbers. Furthermore all the news is available in seconds anywhere and this means it is discounted.
With human nature involved and the fact that fundamental analysis is quickly discounted it is almost impossible for the novice trader to execute trading signals on.
If you want a graphic example of how forex fundamental analysis won't help you make money consider this fact:
The ratio of winners to losers is the same today as it was 50 years ago and this is despite better news more of it and faster communications. So if you are thinking of trading it think again.
A far easier way is to study charts and use technical analysis.
A technical approach takes into account both the supply and demand situation, as well as investor psychology. We can see the impact of both at once and reflected in the price.
Many traders don't believe that technical analysis works, as it can't take into account the fundamentals but this is not correct:
Technical analysis assumes that all known fundamentals are going to show up instantly in price action. Technical analysis therefore is simply a short cut way of taking into account the fundamentals and more importantly takes into account human psychology.
The equation for market movement is:
Supply and demand factors + Human perception (investor psychology) = Price action
So if you are thinking of trading using forex fundamental analysis, you can save yourself a lot of time and increase your chances of success, by taking a technical approach - that reflects ALL the factors that influence price and increase your odds of success.
With technical analysis you act on the reality of price - not opinions and therefore trade the truth and not what you or anyone else thinks it might be.
by Monica Hendrix
If you are new to forex trading you have access to a lot of fundamental analysis as the click of a mouse from banks brokers and news wires you can look at and trade upon it - let's look at forex fundamental analysis and how to use it.
A forex trader, who makes trades based upon fundamental analysis, will look at the supply and demand situation in relation to the currency studied, and try and predict the impact of the various factors on its movement and they include:
* Economic growth and economic policy
* Interest rate outlook
* Balance of payments
* Employment
* Trade deficit
* Political Factors
To name but a few but there is a problem when trying to use fundamental analysis:
The facts are there for all to see but price is ultimately decided by millions of different opinions such as you and me and we all draw our own conclusions from the facts and numbers. Furthermore all the news is available in seconds anywhere and this means it is discounted.
With human nature involved and the fact that fundamental analysis is quickly discounted it is almost impossible for the novice trader to execute trading signals on.
If you want a graphic example of how forex fundamental analysis won't help you make money consider this fact:
The ratio of winners to losers is the same today as it was 50 years ago and this is despite better news more of it and faster communications. So if you are thinking of trading it think again.
A far easier way is to study charts and use technical analysis.
A technical approach takes into account both the supply and demand situation, as well as investor psychology. We can see the impact of both at once and reflected in the price.
Many traders don't believe that technical analysis works, as it can't take into account the fundamentals but this is not correct:
Technical analysis assumes that all known fundamentals are going to show up instantly in price action. Technical analysis therefore is simply a short cut way of taking into account the fundamentals and more importantly takes into account human psychology.
The equation for market movement is:
Supply and demand factors + Human perception (investor psychology) = Price action
So if you are thinking of trading using forex fundamental analysis, you can save yourself a lot of time and increase your chances of success, by taking a technical approach - that reflects ALL the factors that influence price and increase your odds of success.
With technical analysis you act on the reality of price - not opinions and therefore trade the truth and not what you or anyone else thinks it might be.
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