Fear And The Profitable Forex Trader

Forex trading is one of the most looked for occupations for many people these days. Around the world people is getting tired of fixed working hours and tight cubicles that limit their aspirations of a more relaxed and satisfying working life.

In order to start Forex trading the new trader doesn't need a fortune or good Wall Street contacts that will let him become part of the chosen ones. The only thing the new forex trader needs is some starting capital (as low as $100, but an amount around $5000 would be more recommendable) and the free forex trading platform that will be provided by the Forex broker.

But one thing is to start Forex trading and other very different is becoming a profitable Forex trader. In order to become a profitable trader the new trader will immediately discover the imperative need of having an accurate knowledge of the markets and a good understanding of the forex technical indicators. Concepts as Moving Averages, Fibonacci levels, Bollinger Bands, etc; are the basic knowledge every trader must have.

This basic knowledge is indeed essential but once in front of the trading station, with real money on the line and with an open trade subject to the currency markets oscillations; things will start to get tricky even if the basic technical concepts of forex trading have been understood by the beginning and sometimes also by the experienced trader.

Knowledge will start to fade in front of one of the most basic instincts we humans beings have. Fear will ask for an entrance to the traders mind and if let in by the
inexperienced trader, it will turn the making of critical decisions difficult and many bad trading moves may follow.

It is very natural to be afraid and let fear invade us if we are not really sure of what we are doing or we can not afford to lose even a cent in a bad trade; or seen in a different approach, the trader is so anxious and perfectionist that he won't let him lose anything and will take it very seriously if he loses a trade.

Fear is one of the worst enemies of the Forex trader. In order to become a profitable trader it is essential that the person involved in trading understands that he must leave fear aside and stick to the trading plan he has constructed and arranged before, always understanding that losing trades happen to everyone and they are always part of a profitable trading career. A forex trader must learn how to profitable use his stops without heavily compromising the capital in his trading account, i.e., he must play safe but realizing that a calculated risk must be undertaken in order to maximize profits.

In short, fear is a natural emotion we all humans have given the right environment is present; therefore it is the trader's obligation not to arrange a "fear environment" around him and be psychologically prepared for the ups and downs of the trade. No one is prefect and that's an even deeper truth in forex trading.

About the author:

Adrian Pablo is a Forex freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of trading , visit:

=> http://www.1-forex.com

Yes, You Can Start Trading Forex For Free!

Yes, it's true, you can trade the forex markets for free and using the same state-of-the-art software packages that professional Forex traders, around the world, are currently using to make real-time, live currency trades.

And you can also experience the same dynamic market action and go through the same process of making decisions based on breaking news, reacting to charting patterns, and tracking ones performance the same way professional Forex traders do.

And all this can be done even if you don't put any real money into your account, you won't see any difference in how the market behaves and how you react to the market. In short, at some point, every new forex trader needs to start Demo-trading.

Once you start placing demo trades, you will learn a lot about how Forex transactions are placed. I can't emphasize you enough, that this is a very important step for you in order to be able to learn how to become a trader. A demo account allows one to become familiar with trading procedures, such as placing Market, Limit, Stop, OCO Orders without any risk. All dollar losses or gains on a demo account are imaginary but, as mentioned above, the trading experience you acquire is not.

You should notice that making big gains in a demo-account does not guarantee profits in live trading; however, those who are not successful trading on paper rarely are successful when money is on the line. So, yes, just playing around and getting familiar with a demo account can be a great learning experience; however, you will not learn how to become a trader this way. You need to have a trading strategy.

Once you sign up for a mini-demo account, you will need to try one of the trial charting packages from the broker you choose. Any demo software you choose will do because they all have the necessary indicator tools you need. Once you have downloaded the software you can then set up your demo account and start drawing trendlines, marking support & resistance levels, monitoring moving averages, etc. This is also a very good way to get used to how orders are placed. Once you have a real trading system, you will already know how to place orders properly.

And remember, everyone makes mistakes placing orders. So you need to experiment before in a demo account so you can make your mistakes without losing any real money.

About the author:

Adrian Pablo; Forex trader and freelance writer.

You can download a free Fibonacci trading report at his website:

http://www.1-forex.com

Learn By Hands On Forex Trading: Demo Accounts Vs Mini Accounts

If you are new to Forex, you are likely overwhelmed by the sheer amount of information you are finding about currency trading. Although the concept of trading the currency markets is simple to understand, the actual trading methodologies and understanding of how, why and when trades are executed can be hard concepts to grasp and fully understand. If you aren't aware by now, forex trading is not without substanial risks.

There are several schools of thought on how a new trader should progress from learning to actual live trading. In this article we will discuss the best ways for a new trader to learn how to trade the forex and make their first live trades.

To start out, I can not stress enough the need for hands on trading. This is why you will often hear it recommended that new traders start trading with a demo account. What is a demo account? Many online forex brokers offer something known as a "demo account" which is a fake account that you can trade until you feel comfortable trading your own funds. Demo accounts behave just like real accounts, the only difference is that the money you are trading is not real and no actual trades are ever executed.

The purpose of using a demo account if you are new to Forex trading is to get you comfortable making trades and to help you become familiar with the brokers trading platform. You can cut your proverbial teeth so to speak without risking any of your own funds. This makes demo accounts good for a brand new trader who just wants to see how trading works. There are some drawbacks however to using demo accounts to learn Forex trading.

The biggest downside to using a demo account is that you will likely only be able to trade standard size accounts with a demo account. If you intend to trade mini accounts, as many beginning forex traders do, a standard size demo account is going to behave differently than a mini account. Your margins are very different for a standard account versus a mini account. If you become accustomed to trading a standard size account, your trading methodologies will show it. This is because the larger margins offered on standard size accounts allow you to take greater profits from smaller movements in currency prices.

The other major downside to trading with a demo account for learning forex is that as a trader, you need to carefully manage the emotional aspects of trading real money. Since a demo account is fake money, detachment is easy to come by. Once you start trading your actual funds, you might just find that your tolerance for risk is much more conservative. Ideally, as you are learning to trade you are also learning how to manage your risks most effectively.

So what is a beginning trader to do? What is the best way to learn to trade the Forex, hands on?

Once you have read, studied, and completed any courses on Forex trading that you may be taking, you are ready for probationary live trading. The single best way to trade the Forex is to just Do it. Now, this does not mean to jump in and trade a full size account with real money, this would be an enormous risk for a new trader and not a very smart move indeed. What you can do is to find a broker that offers mini accounts. Mini accounts typically start at $200 and typically give you 100:1 leverage. That said, as of this writing, there is one broker (Easy-Forex) that allows you to trade a live mini account for as little as $25.

For less than you paid for any of your books, courses or training materials, you can actually try live trading. You will be amazed at how after just a few trades, the stubborn concepts seem to start making sense and you begin to understand Forex trading.

Now, if you do decide to begin your trading with one of these tiny mini accounts, you should start by making several very small trades. You should also be trading with the same system or methodology that you are trying to perfect. Your profits will likely only be a few dollars since you are trading on a small margin. This is good, however because the reverse is true as well, you are only ever risking a few real dollars. If you happen to have a series of loosing trades and wipe out the funds in your demo account, you can consider it the least expensive education you could possibly get in actual forex trading. Much better than loosing large sums of funds, and more realistic than trading a demo account. Just learn from the experience, and consider it a good deal on a valuable lesson.

Once you are comfortable trading your mini account, you can always have it converted to a regular account (with an additional deposit) if you choose. Overall, it cant be stressed enough, the best way to learn the Forex is to have experience with live hands on trading. This article showed you ways that you can do this at a minimal cost and with the smallest amount of risk.

Forex Scams: How to Spot Them a Mile Away

In recent years, investors have witnessed increased number of investment opportunities and offerings. While the complexity and success of these investment products vary, technological innovation has made the Forex market one of the fastest growth areas. Many of the leading Forex brokers reported up to 500% rise in the number of new retail customers. However, the growth of the Forex market has been accompanied by a sharp rise in foreign currency trading scams.

Many of these Forex scams are promoted on the radio, television, newspapers and the Internet. Investors who fall victim to these schemes, often lose all of their money.
As an illustration, let’s examine the facts of a recent case involving Forex fraud and its consequences. W learned of a foreign currency trading opportunity through an infomercial on the radio. K, the owner of a Forex asset management firm, spoke during the infomercial, promising viewers significant profits with minimum risk. After seeing the infomercial, W contacted K, and later attended a seminar presented by K and his firm.

The seminar was so convincing that W wrote a check to K for $100,000.
Several months later, W received statements (which were false) from K’s firm reflecting significant returns on his initial $100,000 investment. Thereafter, W attended another seminar and decided to invest more money. W took a loan and invested another $800,000 in K’s Forex trading operation. Short while after W’s second investment, the Securities and Exchange Commission filed a complaint against K and his firm for engaging in a scheme to defraud investors. K’s firm’s assets were frozen, including the $900,000 invested by W.

A receiver was appointed to distribute the remaining assets of K’s firm to defrauded investors. The assets were distributed on pro-rata basis with no legal preference given to any of the victims. Since K’s firm’s assets were not enough to satisfy all of the defrauded investor’s claims, W received only about $22,000 of the $900,000 he invested.

Since a whole book can be written on the various tactics and methods used by Forex scam artists, in this article, I will focus on the major warning signs that one needs to identify to avoid falling victim to Forex swindlers.

1. Promises of Little or No Risk
If you encounter a Forex firm that claims to have developed a foreign currency trading strategy that carries very little or no risk, stay away. The reason Forex trading can be very profitable is because it also carries a very high risk of loss. The Forex market is very volatile, and, without good money management, an investor can lose most if not all her capital within few days. Thus, individuals and firms who make claims that are far from market realities, as is riskless Forex trading, are really after your money.

2.Guarantees of Large Profits
Beware of firms that guarantee large profits in Forex trading. These so called “guarantees” are mere ploys to entice investors and make them believe that their money is safe and that they will definitely make large profits. Such claims are simply untrue, because even the best professional traders cannot guarantee that they will make a profit any given day. The Forex market, as most financial markets, is very unpredictable. Hence, be suspicious of such claims and those who make them.

3.Employment Ads For Forex Traders
Many Forex trading firms use employment ads to attract individuals with capital to trade using their systems. The employment ads, which often appear in newspapers and on the Internet, state that a foreign currency trading firm is looking for individuals to teach them how to trade the foreign currency market using firm capital. Those who reply to the ad are convinced by the firm that they will make a fortune trading currencies if they participate in the firm’s training program. During the training process, which often occurs on a demo system, the novice traders are encouraged and told that their demo trading records show that have made significant profits, that they are ready to make real money and would very successful. Despite the firm’s assessment of the novice trader as a brilliant newcomer, no firm capital is provided to the trader, instead the excited novice is told to use her own capital to trade using the firm’s platform. In addition to various fees imposed on traders using the firm’s platform, the Forex firm makes money as an introducing broker. Each time the novice trader trades through the firm’s system, a good part of the spread charged by the broker is shared and goes into the firm’s coffers. After few months, the novice trader loses all of her capital and leaves. The Forex firm, having made money during the novice trader’s short stint, moves on to new traders eager to become rich trading foreign currencies.

4.Is the Forex Firm a CFTC or NFA Member
Before you sign a check and give your capital to a Forex company, make sure you investigate the entity. Check to see whether the Forex firm, with which you want to do business, is registered with the United States Commodity Futures Trading Commission or the National Futures Association. Many scam artists falsely claim that their firms are registered with the CFTC or the NFA to gain a perspective investor’s trust. Do not trust anyone, research the firm and the background of the individuals involved before parting with your hard earned money.

The Internet has paved the way for many new opportunities for retail investors. The Forex market is both exciting and fast paced. Investor’s who are careful and diligent are likely to avoid the perils of this market, and will profit from the growth and opportunities of foreign currency trading.

About the Author

John Bekian is the founder of www.electronicforextrading.com, an informative resource for novice and professional Forex traders.

FOREX ExpertAdvisor Mechanical Trading Systems: What Every Trader Should Know

Most successful FOREX traders use a handful of diverse trading strategies. Which strategy used may depend on the particular currency pair, recent price action or patterns, market volatility and/or a myriad of other variables.

The simple fact that a trader needs an arsenal of strategies suggests the need for at least one mechanical trading system.

In the recent past, the obstacles to develop, test and run a mechanical trading system were significant. Expensive, complex software platforms, coupled with costly real-time data feeds required a significant investment of time and money. In addition, the quantity and quality of brokers offering such services was limited.

Today, this is no longer the case. There are several free automated trading platforms available from a number of different brokers. One popular platform is MetaTrader 3.0, which uses the MQL II language to develop what MetaTrader calls an Expert Advisor. (In addition to MetaTrader 3.0, there is a newer version, MetaTrader 4.0. MetaTrader 3.0 is generally easier to learn by a non-programmer and is a better choice for a trader creating their first mechanical trading system).

Since this platform is free, and most introducing brokers offer demo accounts, it is an excellent opportunity for a FOREX trader to evaluate mechanical trading without incurring any upfront costs.

But what are the benefits of developing and running one's own mechanical trading system? Should a trader - especially one who is a not a programmer - spend their valuable time learning this skill?

The answer is an overwhelming "yes". There are at least four reasons developing a mechanical trading system is worthy of a traders effort .

Reason #1: The trader's strategy must be fully described

The first step in developing a mechanical trading system is to describe its behavior. The trader is forced to fully articulate the strategy of their trading system. This includes both the trade entry and exit.

The trade entry must be described in detail, including concrete definitions of:the proper market conditions for entry, the trade setup or confirmation, the final confirmation or trigger.

The trade exit must be fully defined as well. The stop loss and limit as well as the conditions for exiting must be fully described.

For many traders, articulating their trading strategy proves to be both challenging and enlightening. The personal growth a trader experiences through this exercise alone justifies developing a mechanical trading system.

Reason #2: Mandatory backtesting

No trader in her right mind would unleash a mechanical trading system without first thoroughly backtesting the system. Paper trading or backtesting by hand is no doubt a tedious and error prone process. Fortunately, most brokers offering free trading system platforms also offer the ability to back test - along with sufficient historical data to perform the testing.

Since the trader has already fully described and translated their trading system into a working program, backtesting is as simple as pushing a button. Of course, a great deal of testing may be required, and the results may defy understanding! But the fact remains, executing the back test is a relatively easy task.

Reason #3: Increased discipline

An outstanding byproduct of backtesting is that it readies the trader for the actual performance of the system. That is, backtesting calibrates the traders expectations of their trading system.

The main benefit of possessing an accurate expectation of one's system is an increased level of discipline. When a trader conducts numerous back tests, they begin to understand the randomness of any one particular trade. This understanding prevents a trader from assuming too much risk on any particular trade - regardless of the quality of the trade setup. While testing, the trader has seen too many "perfect trade setups" that resulted in losing trades. Again, this benefit alone justifies developing and running at least one mechanical trading system.

Reason #4: Consistent execution

Consistently executing a trading strategy is the single most difficult task a trader faces. The ability to accurately interpret market behavior through a smoke-screen of emotions - fear, greed, anger, elation - is a talent very few traders actually possess. An often cited benefit of the mechanical trading system is its ability to execute trades according to its rules, with no variation.

The actions required to develop, test and execute a mechanical trading system are consistent with the behavior shared by most successful traders. If done correctly, the results of these actions reward the trader for the effort; this positive experience reinforces the "good" behavior and gradually builds and strengthens the framework successful traders rely on to remain successful.

Visit us at www.iExpertAdvisor.com





About the author:

Co-founder of iExpertAdvisor, LLC, Author of "Automatic Alpha: How to Build a Winning FOREX Trading System", Author of "The iExpertAdvisor iBulletin"

Choosing eCurrency Exchange Training Courses - What Should You Look For?

Trading eCurrencies often has a steep learning curve for most people. Sure, there are the few that can pick it up without any direction but I would not be surprised if these people had prior trading experience in stocks, bonds, options, or even FOREX.

The fact is that a large majority of people seek out training courses to learn how to trade eCurrency - and for good reason. After all, it is only natural for people wanting to get started making money as soon as possible, and training courses help to fill this time gap.

There are two major types of training materials available - eBook and video programs. What you choose is entirely up to your personal tastes. Neither training format is any better than the other, and pricing of these courses usually does not correlate to the format of the course in question.

Those that choose eBook type courses prefer to learn by reading a book. These people often prefer to have a resource that they can print out to read away from the computer, take notes in the margins, or want to have an easy way to look up information. There is an index and table of contents available in the book that makes finding information incredibly easy.

Those that choose the video format for eCurrency training courses prefer to learn by watching someone else. These courses walk you through each step of the account set-up process to advanced eCurrency trading strategies all on-screen. It is just like the course trainer is standing over your shoulder and telling you which keys to press and which boxes to fill in.

Now that the two major training formats have been discussed, what should you look for in selecting a training course? These selection criteria can come down to personal preference, but I have a set of criteria that I use to evaluate training course providers:

Pricing - Keep in mind that pricing for video and eBook format courses do not necessarily reflect the format of the training course. For example, some might believe that video format courses are always higher than eBook courses, but this is not always the case. You should, however, look for any free bonuses that you will be getting that could add to the value of the course. I will say that not all courses offer bonus material, but this doesn't mean that you are not getting a good deal. Also, the lowest-priced training course does not necessarily mean that it offers low-quality information and vice-versa.

Support - Customer service is next on my list. You should always evaluate a course for its level of support based on what you think you will need. Before you purchase, find out what support levels are included in the base price and thene evaluate additional support options if they are available. If you have problems with understanding information, how can you contact the course developer? Are there support forums available for the course where you can discuss information with other clients? Most eCurrency Exchange training courses offer different purchase options depending on what level of support you think you will need. Some clients might not want any support, and this is fine. Support options usually range from none to full telephone support directly with course trainers. What you choose is up to you and how comfortable you feel you will be in processing the information presented.

Product Performance - Does the training course actually live up to the promises made? This is another very important selection criteria on my list. The good thing is that if any negative information is found on a training course, that information will spread like wildfire across the internet and should be pretty easy to find. Look for testimonials on the course developer's site and read them over. Contact the course developer with any specific questions that you might have regarding performance - they're usually very happy to answer any inquiries that you might have.

Money-Back Guarantee - In my opinion, you should always choose a course that offers a money-back guarantee. Only the course developers that are 100% confident in their product will offer a refund should you decide to request one. Not having a money-back guarantee in place kind of tells me that they are not too sure about their product to begin with. If you do purchase a course without a guarantee in place, you could be burned really quick with no way of getting your hard-earned money returned.

There are many options available for choosing eCurrency Exchange training materials. The two most popular training formats are eBook and video training courses. When choosing your course, you should be aware that product price does not always reflect the format of the course, nor does it necessarily reflect course quality. The best courses are not always the most expensive ones and vice-versa. You should also look at product performance, levels of support if you feel like you need it, and the presence of a money-back guarantee before you make your purchase.

Advantages of Trading FOREX over Stocks and Commodities

There are many advantages to Trading FOREX as your main income generator. Let’s start by something that may be worrying you already.

“Do I need a Diploma or some kind of Certification to trade FOREX?” The answer is this:

When attempting to make more profit than losses on the fluctuation of exchange rates between major currencies (i.e., Trading the FOREX), nobody is going to ask you for a diploma, a formal license or verify the amount of hours you've spent studying the Foreign exchange market and banking industry.

All you need is the proper training, you can get very valuable sources for this training at http://www.1-forex.com. But this is not the only advantage you get when trading FOREX, compared to other ways of investment and speculation; i.e. Stocks and Commodities. You have a whole bunch of advantages over these other options that will be enumerated in the following paragraphs.

The Main Benefits of Trading the FX Spot Market:

1): FOREX is the largest financial market in the world.

With a daily trading volume of over $1.5 trillion, the spot FOREX market can absorb trading sizes that dwarf the capacity of any other market. In fact, when compared with the $50 billion daily market for equities or the $30 billion futures market, it becomes quickly apparent this gives you,
and millions of other FOREX traders, almost infinite trading liquidity and flexibility.

2): FOREX is a TRUE 24-hour market.

The FOREX Market never sleeps. Trading positions can be entered and exited at any moment - around the globe, around the clock, six days a week. There is no waiting for an opening bell as in the case of trading stocks. It is a 24-hour, continuous electronic (ONLINE) currency exchange that
never closes. This is very desirable for you if you want to trade on a part-time basis, because you can choose when you want to trade: morning, noon or night.

3): There is never a Bear Market in FOREX.

You can have access to a seamless, mutually-inclusive (two-way) exchange of currencies. Meaning, because currencies trade in "pairs" (for example, US dollar vs. yen or US dollar vs. Swiss franc), one side of every currency pair (for example, USD/JPY - JPY = YEN) is constantly moving in
relation to the other. Thus, when you buy a particular currency, you are actually simultaneously selling the other currency in that particular pair. As the market moves, one of the currencies will increase in value versus the other. Of course, it is up to you to choose the correct currency to
be long or short. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. This means you have equal potential to profit in both a rising or falling market.

4): High Leverage - up to 200:1 Leverage.

You are permitted to trade foreign currencies on a highly leveraged basis - up to 200 times your investment with some brokers. This is primarily attributed to the higher levels of liquidity within the currency markets. Standard 100,000-unit currency lots can be traded with as little as 1% margin, or $1,000. Mini FX accounts are permitted to trade with just 0.5% margin -- in other words, just $50 allows you to control a 10,000-unit currency position. Futures traders, who are accustomed to margin requirements generally equal to 5%-8% of the contract value, will immediately recognize that
the FOREX market provides much greater leverage, and for stock traders, who must post at least 50% margin, there’s no comparison. If you’re looking for an efficient use of trading capital, this is it!

5): Price Movements Are Highly Predictable.

Although currency prices in the FX market may be volatile, they generally repeat themselves in relatively predictable cycles, creating trends. The strong trends that foreign currencies develop are a significant advantage for traders who use the "technical" methods and strategies taught at the sources found in http://www.1-forex.com

Unlike stocks, currencies rarely spend much time in tight trading ranges and have the tendency to develop strong trends. Over 80% of volume is speculative in nature and, as a result, the market frequently overshoots and then corrects itself. As a technically-trained trader, you can easily
identify new trends and breakouts, which provide for multiple opportunities to enter and exit positions.

6:) Commission-free Trading and Low Transaction Cost

When you trade FOREX, through one of our recommended brokers (this info is in our private resources section), you'll do it totally commission-free! These brokers don't charge commissions to trade or to maintain an account, and that goes for all clients trading the FOREX through them,
regardless of your account balance or trading volume. Even Mini FX traders can buy and sell currencies online, commission-free.

What about trading fees? There are none of the usual fees to which futures and equity traders are accustomed -- no exchange or clearing fees, no N_F_A or S_E_C fees. Because currencies trade over-the-counter (OTC), via a global electronic network -- in FOREX, what you see is what you
get, allowing you to make quick decisions on your trades without having to worry or account for fees that may affect your profit/loss or slippage.

In the equities markets, you must pay both a commission and exchange fees. The over-the-counter structure of the FX market eliminates exchange and clearing fees, which in turn lowers transaction costs.

So, if FOREX broker don't charge commissions, how do they make money? Like all traded financial products, over-the-counter currency trading involves a bid/ask spread, which represents the prices at which your counterparty is willing to trade. Because the currency market offers round-the-clock
liquidity, you receive tight, competitive spreads both intra-day and night. Stock traders can be more vulnerable to liquidity risk and typically receive wider trading spreads, especially during after-hours trading.

7): Instantaneous Order Execution and Market Transparency.

Market transparency is highly desired in any trading environment. The greater the market transparency, the more efficient the market becomes. Unlike other markets where transparency is compromised (like in the Enron scandal), FOREX markets are highly transparent (i.e., analyzing
countries, and having access to real-time research / news, is easier than companies).

Because of this transparency, as an FX trader, you will be able to exercise risk management strategies in accordance to the fundamental and technical indicators we teach at RapidForex.com

The FX market offers the highest level of market transparency out of all the financial markets. Because of this, order execution and fill confirmation usually occur in just 1-2 seconds. Markets that do not offer executable prices and force traders to absorb slippage obviously compromise the trader's profit potential considerably.

In the forex world, order execution is all-electronic and because you'll be trading via an Internet-based platform, instantaneous execution is routine. There are no exchanges, no traditional open-outcry pits, no floor brokers, and consequently, no delays.

http://www.1-forex.com

About the Author

FOREX Trader and Freelance writer.

http://www.1-forex.com