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Yin and the Yang of Markets I am reading a fantastic book on trading, first published in 1924, by Richard D. Wyckoff, titled 'How I Trade and Invest in Stocks & Bonds'. Although most of the examples in the book pertain to stocks, the insights into the nature of trading are relevant no matter what instrument you choose to trade. Why Would You Trade Futures? Futures are normally traded in contracts and are a legally binding agreement between a buyer and a seller. The seller must deliver the specific agreed upon asset at a future date but for the price agreed today. Why Trade the Forex Market and Why is it Attracting So Many Participants? The Forex market is vital to the general prosperity of the free world economy. Why? Some $1.5 trillion dollars worth of international currencies are bought and sold every single trading day. It is by far the largest traded market in the world. Why People Trade Forex In today's information technology driven economy you can just about trade anything you want. Whether it is currencies, metals, shares, wheat, pork bellies you name it. Why Most Forex Traders Become Bankrupt? The forex market operates in a similar way. The forex is simply a place where the currency (money) of one country is exchanged for another. The main goal in forex trading is also to buy low and sell high. There are simply a few differences between the rules of the stock market and the rules of the forex. Why Does Technical Analysis Work? Technical analysis describes different ways of predicting the future of the stock/futures market based on its history. Unfortunately, technical analysis is not an exact science. Many prominent scientists label it as "voodoo science". Why 90% of Forex Traders Go Bust Believe me when I tell you that 90% is a conservative estimate. Some sources have it as high as 99% of traders losing their initial starting capital and I have also read that not only do over 90% of them lose their money but also 10% actually go bankrupt. Why 10% of Traders Go Bankrupt? I was thinking about an article I read some time ago that 90% of traders who ever trade lose their account and that 10% actually go bankrupt. If the first number doesn't scare you then the second definitely should. Who Trades The Markets Let's just clarify what is meant by the term trader, sometimes called retail trader or day trader. This is an individual who trades the financial market whatever they may be using their own money. They may or may not be dependent on the results of their trading for their income. This does not include professionals who work for institutions or who manage other people's money. Where To Place Your Trading Stop Many traders have a problem defining where they should place their stop loss. They have no problem entering a trade but often have a problem defining where they should take profits or cut their loses. In this lesson we will cover some of the popular methods of choosing a stop loss. What You Should Know About Forex Trading How difficult is it to make money trading the Forex market? How much time does it take to actually be able to make a living trading the Forex market? These and other important aspects of trading are to be discussed in this article. What is the Best Business Opportunities Did you know that more and more business opportunity seekers worldwide are discovering the powerful profit potential of Foreign Exchange trading? In this business, there are no employees to hire, no advertising, no products to stock, no downlines to fill -- just you, an Internet connection and a computer. What is Support and Resistance It is very important to understand the concept of support and resistance. In up trends, every time price drops to the up trend line and then resume their advance, the trend line has acted as support to the price up trend. Support can also be found at prices of previous support or resistance. What is Simple Moving Average? This is the most widely used and is simply calculated by adding up a set of values and dividing the total by the number in the set. This is the average. Movement of this average is effected by adding the next new value of the set and subtracting the first value of the set and again dividing by the same number of values in the set being studied. What is Moving Averages A market that is trending up should have higher peaks and higher valleys. The majority of bars should also have higher highs and higher lows. In a down trend the market should have lower valleys and lower peaks and the majority of bars should have lower lows and lower highs. What is Futures Futures are normally traded in contracts and are a legally binding agreement between a buyer and a seller. The seller must deliver the specific agreed upon asset at a future date but for the price agreed today. What is Forex Marginal Trading Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in Forex investments can be made without a real money supply. What is Forex (Foreign Exchange) Trading? The vast currency market is a foreign concept to the average individual. However, once it is broken down into simple terms, one can begin to easily understand the foreign exchange market and see what a profitable avenue of income participating in the trading of Forex can be. What I Learnt Losing $60,000 My First Year as a Full-Time Trader During my first year as a local (independent trader) on the floor of LIFFE, I bought and sold 8804 FTSE futures contracts, about 40 contracts per day on average. The result was a loss of $61,620 or -$267 per trading day. What Are the Differences Between Trading and Gambling? Many people think that trading is similar to gambling. Is this really the case? For example, let's take a look at Black Jack. If you start with $10,000 gambling capital, placing bets of $100 per hand and play 100 hands per day, how long will you last? What Are Commonly Traded Securities Stocks -- When you buy stocks you essentially own a little share of the company you just bought. The more shares you buy the more of the company you own. When the company whose shares you have bought makes a profit you will receive that profit in the form of dividends. Walter Bressert Reads Market Via Cycles & Oscillators Walter Bressert earned a college degree in economics, which taught him "economists don't know much about the way the world works." An active trader for many years, Bressert relies on cycles and oscillators in his intraday futures trading, in which he primarily focuses on the S&P 500 contract. Using Technical Indicators: Stochastics & RSI A good understanding of the basic tenets of technical analysis can vastly improve one's trading skills. Using Technical Indicators: Moving Averages & Fibonacci A good understanding of the basic tenets of technical analysis can vastly improve one's trading skills. Using Technical Indicators: Bollinger Bands & MACD A good understanding of the basic tenets of technical analysis can vastly improve one's trading skills. Using Indicators to Identify Trends Of the many market sayings thrown around by traders, perhaps none is more overused and less understood than the old adage 'the trend is your friend'. Understanding Stochastics The foreign exchange markets move when some force makes one currency either more or less valuable than another. The cumulative purchase and sales of a currency cause it to move up or down and to become more or less valuable in relation to other currencies. Understanding Rectangles on Forex The rectangle contains price movement between two points in a rectangular shape to which we add lines to signify the upper boundary and lower boundary. These lines should be horizontal. Understanding Options Options are one of the oldest trading vehicles man has ever used. Around a 1000 B.C Aristotle Thales predicted by the stars that there would be a bumper olive harvest and bought options on the use of olive presses. Understanding Major Economic Indicators When focusing exclusively on the impact that economic indicators have on price action in a particular market, the foreign exchange markets are the most challenging, and therefore, have greatest potential for profits of any market. Understanding Fundamental Analysis Fundamental analysis refers to the study of the core underlying elements that influence the economy of a particular entity. It is a method of study that attempts to predict price action and market trends by analyzing economic indicators, government policy and societal factors within a business cycle framework. Understanding Forex Trends Trend is the easiest and the most difficult thing to understand. The difficulty arises because of the time factor. Whenever we talk of trend it has to be related to the context of time. Understanding Forex Quotes Reading a foreign exchange quote may seem a bit confusing at first. However, it's really quite simple if you remember two things. Understanding Forex Margin With more buying power, you can increase your total return on investment with less cash outlay. To be sure, trading on margin magnifies your profits and your losses. Types of Forex Trading Orders Placing orders correctly is probably one of the most important aspects of trading. It is vital that you understand and use the correct order when you trade. Tom DeMark Relies 100% on Market Timing Trader and consultant Tom DeMark has invented dozens of proprietary technical indicators over the years and relies strictly on the technical principles of market timing for his research and trading. In fact at one point in his career, DeMark went through the CFA program (certified financial analyst), but chose to never complete it. Tom Bierovic Uses Discretion on Top of His Rules Off floor trader Tom Bierovic, trades according to a set of rules he has developed over the years, but uses his own discretion on top of these rules. Bierovic believes he was lucky because he was introduced to the futures business at a very young age. His father was a trader at the MidAmerica Exchange and Tom would plot daily and weekly bar charts of the agricultural contracts for his allowance money. The Way of the Spare Room Entrepreneur Being a spare room entrepreneur is more than just a way of making a living, it is a way of living your life. It isn't an easy way to live. In the past, being in business independently was the norm, and people typically worked and lived in the same place. The Flaw In Our Emotions As humans we have a natural tendency to try and influence our surroundings and events we take part in. This is one reason as a species we have succeeded but it is also one of the fundamental flaws we all have when trying to achieve success as a trader. The Difference Between Cash and Futures Prices Futures are normally traded in contracts and are a legally binding agreement between a buyer and a seller. The seller must deliver the specific agreed upon asset at a future date but for the price agreed today. The Cycle Of A Trend In this lesson we are going to look at the different stages of a trend and how it can help you position yourself for a trade. It is commonly accepted that there are four stages of a trend. These stages make up a cycle and each cycle has smaller cycles contained within them. The Best Places for a First Date The first date is your opportunity to make a positive impression and in order to make a good impression you must be prepared. Perhaps the biggest decision to make beforehand is where to take your date. The Basics of Currency Trading Currency, like other commodities, are traded in futures contracts. Simply, these are contracts to deliver a fixed amount of a particular currency, in a given month in the future, at a price agreed upon and paid for today. The "M" And "W" Trading Pattern The "M" and "W" trading pattern is a great little pattern that occurs with enough frequency for you to add it to your trading tool bag. Successful Forex Trading with Pivot Points Pivot Points are calculated on the previous days move and trades are entered when the market hits a support or resistance line of the pivot point providing your OB/OS indicator is in agreement. Stopping Yourself on Forex I read on a bulletin board a traders comment that on his first outing trading the E-Mini S&P 500 he lost on each of his trades. He noted though, that had he had a wider stop each of his trades would have been profitable and that therefore he would be trading with a wider stop in future. Standard Day Trading Orders To the day trader, using the right price order is just as important as using the right tool for the right job is to the mechanic or carpenter. Should I Override the Forex Strategy? Today was a perfect day to test your discipline: We went long at 1190.00 and the reversing order was placed at 1192.25. Prices moved up to 1192.00 and reversed. One hour later we tried to reverse at 1191.00. Again prices moved up to 1190.75 and reversed. Rick Redmont Bases Trading on Wyckoff Theories Off-floor trader Rick Redmont gained his first experience trading stocks as a college student during the bull market of 1961. "I had $10,000, which turned into $20,000. I followed the Chartcraft point and figure book-but it didn't really matter what you bought. Responsibility in Forex Trading An email in response to my article prompted me to consider the significance of taking responsibility in trading. There is a natural tendency for most people, in any area of life, to not take responsibility for results and behaviours that appear negative. Profitable Trades for Beginner Once you are in a profitable trade, the next challenge becomes when to take profit. Optimizing profits is the other main aim of trading, besides limiting losses. Pivot Point Trading You are going to love this lesson. Using pivot points as a trading strategy has been around for a long time and was originally used by floor traders. This was a nice simple way for floor traders to have some idea of where the market was heading during the course of the day with only a few simple calculations. Persistence Pays Off for Joe Stowell According to independent trader Joe Stowell, persistence and courage are two key characteristics necessary for success in trading. Persistence certainly has paid off for Stowell, who traded part time off and on for 20 years, before leaving his job as a school teacher to trade full time. One Simple Thing That Can Improve Your Trading I am going to share with you a simple discipline that can really help your trading. This simple little act is often ignored by new traders and overlooked by experienced traders. Momentum Trading One of the most basic and widely used indicators is that of momentum. Before I go on to tell you how we can use the momentum indicator to trade with, I want to explain the difference between a leading and a lagging indictor. Maintain Your Perspective Every minute more than 150 Million Dollars change hands in the electronic index futures markets like the e-mini S&P and e-mini NQ. You can win or lose thousands of dollars in a few minutes; the futures markets can make you rich in a few weeks or months or wipe out your account with no mercy. Lost in Forex Loss An email prompted me to consider the significance of taking responsibility in trading. There is a natural tendency for most people, in any area of life, to not take responsibility for results and behaviors that appear negative. We want to see ourselves in a good light and it is tempting to try to avoid responsibility for acts that we consider bad. Linda Bradfore Raschke Focuses on Technicals After spending six years trading on the floor, first at the Pacific Coast Stock Exchange and then at the Philadelphia Stock Exchange, Linda Bradford Raschke shifted gears and moved to an off-floor office in 1987. After trading her own money for several years, she moved into the money management side of the business in early 1993. Raschke, along with her partner Rick Genett, manage about $25 million. Larry Williams: Training Key for Trading, Running Trader and marathon runner Larry Williams sees parallels between successful trading and successful marathon running. Williams, who recently completed his sixteenth marathon run, pointed to "pain and agony" as being two of the obvious similarities between trading and long-distance running. Key to Day-Trading: Have Your 'Team' in Place Day-trading is a very serious business; if you don't have all the right ingredients in place before you begin trading, you're dead. One of the most important aspects of the day-trading business is your "team:" Jake Bernstein: Psychologist Turned Trader Jake Bernstein, one of the futures industry's best-known traders, started trading "by accident" he told FWN. Bernstein was a psychologist who responded to an ad in the newspaper regarding "ag futures." A broker started calling him and Bernstein opened an account. Investment Strategies: Technical Analysis and Fundamental Analysis The two fundamental strategies in investing in Forex are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. Introduction to Technical Analysis Technical analysis is a method of forecasting price movements by looking at purely market-generated data. Price data from a particular market is most commonly the type of information analyzed by a technician, though most will also keep a close watch on volume and open interest in futures contracts. Intraday Trading Tactics In this lesson I want to discuss intraday tactics that you should be aware of when you start to trade intraday. By intraday I mean very short time frames such as 1 minute, 5 minute and 15 minute charts. This will apply to traders who actively trade and probably trade frequently during the course of the day. How To Think Like A Winning Day Trader What makes the best traders successful? Are they "lucky"? Have they discovered some "secret" indicator? No. They've learned the truth about trading. Trading success is a simple as 1-2-3. How To Nail The Market When Everyone Else Is Wrong Picture the scene -- you have done your an alysis and have been waiting for the breakout of a range. You might even have identified a head and shoulders or double bottom. So anyway, you have a trade all set up and you are just waiting for the move. How to Make Consistent Profits Futures Trading The issue of direct access is an important one and it becomes more important the more short term your trading is. The market can change from a state of seeming paralysis to one of shocking volatility and activity in a flash. How to Make Consistent Forex Profits One of the mistakes I consistently made in my early years as a trader was to try to make too much money in relation to my trading capital. How to Lose Money on Forex I read somewhere that when Michael Jordan was making an advert that required him to miss the basketball hoop a number of times; he just couldn't do it, he couldn't not get the ball in the hoop. How to Choose an Online Forex Firm Forex is a special kind of the world financial market. Trader's purpose on the Forex to get profit as the result of foreign currencies purchase and sale. But, what to look for in an online Forex Firm: How to Choose a Forex Broker? When it comes to getting started in forex trading, there are quite a few things that you have to consider. The first thing to do is to find and choose the right broker to help you in making your trades. How to Be a Successful Forex Trader Just what does it really take to become a successful trader in today's markets? To answer that question adequately one must first understand the mind of a successful trader and what his/her thought processes are. Today's markets have changed dramatically just in the past few years and those changes are due to a variety of different factors. How to Be a Highly Skilled Forex Trader Trading, like any endeavor, any skill, is learnt through doing. We learn through trial and error, through having experiences and evaluating and learning from those experiences; and of course, our learning is accelerated if we have the support and advice of someone who is further along the path of development. High Low Breakout Technique This technique can be used for any market that has a decent daily range. If you look at any chart, what do you see? You should see a succession of bars that are doing one of three things. Grant Noble Reads Mass Media for Contrarian Signals Futures trader and author Grant Noble looks to the mass news media in order to garner signals of major market bottoms or tops. Only, he looks to the media with a contrarian perspective. Glossary of Forex Terms and Commonly Used Expressions Forex is one of the fastest growing areas for news traders to get started. The main reason for this is the low entry level (only a few hundred dollars for mini accounts) and the fact that it is fairly straightforward to trade. Glenn Neely Bucks Traditional Elliott Analysis Glenn Neely locks horns with traditional Elliott wave theoreticians and has developed his own approach to trading the markets, which he calls NEoWave Theory. Neely first encountered the Elliott wave theory back in the early 1980's while he was working off-shore in the oil industry. George Lane Still Trading Off Stochastics at Age 75 George Lane completed his 47th year of trading in December 1996 and is still going strong. After many years of trading in the grain pits in downtown Chicago, Lane has shifted to screen trading during his "retirement" in a small community about 80 miles south of Chicago. George Fontanills Incorporates Options to Lower Risk Trader George Fontanills first began utilizing options in order to go "delta neutral" on his futures positions, which would allow him to "still sleep well at night." Since he began using options in conjunction with his futures trading, Fontanills believes he has found a way to accelerate his profits while decreasing his risk. George Angell Keys in on Volatility and Liquidity Volatility and liquidity are the two elements independent trader George Angell looks for in a market to trade. Currently, Angell exclusively trades the S&P 500 futures, putting on intraday trades only, never holding positions overnight. "Liquidity and volatility are the two things you have to have. You can't day-trade something like oats--it wouldn't work" Angell said. Gary Wagner Uses Candlesticks to Measure Sentiment Japanese candlesticks offer a "mathematical expression of psychological market sentiment" to trader Gary Wagner, who utilizes these Eastern technical indicators in conjunction with Western tools to actively trade for himself. Fundamentals of Forex Trading Trading is not an exact science. You can't do X and get Y every time. It is as much an art as it is anything else. There is no magic formula. Trading is all about probability. Fundamentals of a Trading Plan Trading the Forex market has many benefits over other financial markets, among the most important are: superior liquidity, 24hrs market, better execution, and others. Traders and investor see the Forex market as a new speculation or diversifying opportunity because of these benefits. Fundamentals Affecting the U.S. Dollar Fundamental analysis refers to the study of the core underlying elements that influence the economy of a particular entity. It is a method of study that attempts to predict price action and market trends by analyzing economic indicators, government policy and societal factors within a business cycle framework. Forex vs. Futures The global foreign exchange market is the largest, most active market in the world. Trading in the forex markets takes place nearly round the clock with over $1 trillion changing hands every day. It is the main event. Forex versus Equities? If you are interested in trading currencies online, you will find that the forex market offers several advantages over equities trading. Forex Trend Detection Long term profitable Forex trading warrants long term goals and objectives. One good idea is to have an excellent trend based trading system. Just having one will not really work out if you do not follow it in a disciplined manner. Forex Trading: A Fool's Game I received an email from a prospective buyer of my online trading course this week. His question caused me to think about the wisdom of pursuing trading as a worthy venture. Forex Trading System Now you have decided that you are going to trade a particular security and you need to find a way of entering and exiting the market. So, how do you approach it, do you just jump in with a gut feeling or do you use some kind of system to help you make the decision. Forex Trading Psychology The key to successful Forex Trading unlike other financial markets, is knowing yourself. This does not certainly mean enlightenment of self but knowing your behavioral pattern under given circumstances. Forex Trading Pivot Points Those of you who have been trading for a while will be familiar with Pivot Points. During this lesson I want to go over how to find a Pivot Point and also a slightly different method of using them. First let's look at how you calculate a Pivot Point. Forex Trading Basics: Supply & Demand Fundamentals The objective of currency trading is to exchange one currency for another with the expectation that the market rate or price will change such that the currency pair you have bought has appreciated in value relative to the currency you have sold. Forex Pip Auction Game Problem Here are 4 fail-proof ways to solve the Pip Auction Game problem, and to guarantee that you're not going to play it again. You have heard this before, and it's true, but until now you still have not lived by this rule. You should never risk more for pips than they are worth. You should cut your losses short. Forex Multiple Time Frames Multiple time frame trading has probably done more to increase my overall profitability than any other one thing alone. The correct use of multiple time frame trading will allow you to stay in the trade longer by better identifying where you are relative to the big picture. Forex Envelopes What we are going to show here is the use of Envelopes, which form trading bands. The particular trading bands we are going to use will be based on exponential moving averages. This will help us form a method to trade. This is basically an intraday strategy, which works well on the 10min/15min time frame. Forex Bid/Offer Normally when you look at your charts you only see one price and that price is the bid price. Some types of charting software are capable of displaying the offer price but most commonly the price you see is the bid price. Forex Basics: Relative Strength Index Relative Strength Index was developed by J.Welles Wilder Jr. and introduced in his book 'New Concepts In Technical Trading Systems'. It is one of the most popular technical tools around. Forex Basic: What's a Spread? Very simply, a spread is a position in which options are bought and other options are sold. Having said that, there are dozens of ways to combine options to create simple or exotic trading positions. Forex Basic: Two Period Reversal Pattern The two period reversal is originally taken from the 2-day reversal pattern and as the name implies this particular pattern consists of two periods. I use two periods and I apply this pattern to all securities and time frames. Forex Basic: Symmetrical Triangles Symmetrical chart patterns can be found in almost any market and any time frame. They normally signify some indecision in the market and as the pattern develops it is common to see a decrease in volume.
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