Monday, 26 April 2010

Stock Market Tips From The Pros

Below are some stock market tips that can be applied to forex trading and or day trading.  

Do you have sufficient capital?

The worst mistake that any trader could make is to trade with insufficient capital.  Always trade with money you can afford to loose.

Remember...  We All Have Losses

Another important quality that the market masters emphasise is the ability to accept losses and to take them promptly. Perhaps the single greatest downfall of all traders is the inability to take a loss when it should be taken. None of us like loosing, but its a fact and it happens!

DO NOT overtrade

Too many traders feel that they must trade every day. Such traders are addicted to trading. The fact is that some days offer few if any trading opportunities. The trader who wishes to preserve capital and avoid losses should understand that trading is not an everyday event.

Always Be Persistent

This is perhaps the single most important quality a trader can have. Trading requires the ability to continue trading even when results have not been good. Due to the nature of markets and trading systems, good times frequently follow bad times, and bad times frequently follow good times. 

Specialise in an instrument

Successful trading is a time-consuming undertaking that requires close attention. Which is why many market masters specialise in certain markets. In most cases, those trading forex would specialise in a particular currency pair; i.e. GBP USD, EUR USD etc.

Trading News

Do not be a follower of the news; rather 'fade' the news. Use the news to exit positions that you probably established before the news became public knowledge.

Stick to your goals...

Above all, remember that as a trader you have one major goal: to make money. To do so, you must be particularly aware of your net profits at all times.

"...Great traders are created, not born. Those who lack discipline, persistence and self-confidence lose the never-ending challenge of trading profits. But those who survive the battle by using the tools used by the masters enjoy the fruits of consistent success."

Tuesday, 13 April 2010

Forex Backtesting

Forex Backtesting - Beware Of Backtesting!

What is backtesting?

Backtesting is essentially the testing of a trading technique employing historical market prices, to see how top notch that system can be. This testing is usually done providing computer program that runs the trading system within a range of time in the past.

Why should you beware of backtesting?

Many new traders think that good backtesting results will guarantee similar results in the future. This is a big mistake because a system that has worked in the past may not necessarily work in the future. This is because the Forex market is always changing and evolving. The Forex market today can be very different from the market last year. The past does not equal the future... if it did, we'd all be millionaires by now!
What about trading systems with good backtesting results?

Because everyone knows what has happened in the past, it's easy for anyone to create a trading system that can be very profitable during that time (in the past). But remember: we're not trading in the past; we're trading in expectation of the future. Trading systems with good backtesting results may very well fail miserably in the future.

But this fact has not stopped unscrupulous people from selling Forex trading systems based on "excellent" backtesting results. They use impressive hypothetical (i.e. backtested) results as a sales tool. Unfortunately, many traders purchase these systems only to have them fail miserably and causing them to lose thousands of dollars.

What can I do to protect myself?

When looking for a good trading system, ask the system developer whether the results are actual or hypothetical. Many people assume that hypothetical returns are actual returns, but that's just not the case.

Forex Backtesting

Now that you know it's easy to create a system based on backtesting (i.e. hypothetical) results, you'll hopefully be more skeptical about trading systems with little or no actual trading results.

Article Source: - Forex Backtesting - Beware Of Backtesting!

Thursday, 1 April 2010

Make a killing trading forex

Making A Killing With Forex Day Trading

Forex is an open market for trading foreign exchange where money itself is bought and sold. 'Forex day trading' is in general referred to as simply the normal forex trading. Very less difference can be seen. In general cases a day trader is a person who makes several trades in a day, buying and selling a number of currencies. They are people who try to increase there profits by taking advantage of the small increase in the currency values. A forex day trade is similar to the stock market trades except that in the forex day trade traders trade currencies and not stocks. The major advantage of a forex market over stock market is that instead of traders investing and waiting for many years for there stock values to increase, here they just see there currency values increasing and decreasing over time. This allows them to make several trades within a day.

Forex day trading allows a trader to open an account for themselves for as less as 250$. The amount that is needed to open an account varies from one company to company. There are several agencies that have brokers mediating a firm or an individual to the market. Brokers are people who educate individuals and firms to work there way through the market. The work of a broker is to help traders to get through the market without suffering much loss. Certain forex agencies also provide traders with forex software's. This software's show's the ups and down's of the currency values in the form of graphs, chart diagrams and data flow diagrams. They are very efficient in bringing out the current statistics of the currencies. In a forex day trade currencies are often traded in fixed pairs, the main currencies traded being dollars, pounds, euros and yen. These are normally traded against dollars.

Only after the internet forex trading becoming so popular, was there an opportunity for even commoners to trade. Until then only co-operate firms and large financial institutions was able to trade in the forex market. Forex now has become so simple that certain traders have taken it as a hobby. With the help of the vast number of software's available they are able to predict the changes in the market and make alterations in there trade accordingly. The forex day trading is similar to what is called as the future's market. The advantage here is that the liquidity that is offered here is higher and the risk factor is lower due to the lesser investments. Forex can be a very serious carrier option for those who can invest high amounts and can play the market well. The profits that can be obtained depend on an individual's skill and the experience that they have obtained by being in the market.

Open a FREE trading account here...

Article Source: - Making A Killing With Forex Day Trading


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