Free Forex Robot

The Forex robot enclosed is free and everything you need to know about it is enclosed. After reading this article, you will know how it why it works and how by applying it you can enjoy long term currency trading success... There is a huge industry in Forex robots and so called Expert Advisors to choose from which you can buy but is the one enclosed better - the answer is and its better for one simple reason - it makes money. 

The Robots you see heavily advertised are junk. They don't work, and simply rely on made up track records and clever advertising but none of them have made long term gains. Let's look at our free system and it's so simple, you don't even need a computer, it has just one rule and this is the rule: Buy a new 4 week high and hold the position until a new 4 week low is hit, then reverse your position to a short. Keep buying new 4 week highs and selling new 4 week lows and always keep a position in the market. You can't get a simpler system than this but it works and it's obvious why. It's a simple robust long term breakout system and it's a fact that all major moves start from breakouts. 

This system will get you in on all the big trends and get you will get a good chunk of them in terms of profits. This system is not new, it was devised by well known trader Richard Donchian in the late seventies and traders have been using it ever since. The system is simple to understand, very robust, it's based on breakout trading which will always work and its simplicity is the very key to it's success. Simple system always work best, as they have fewer elements to break than complicated ones. Most traders won't use this system though. 

They will think it's to simple to work (despite the fact that it does), it doesn't have any glossy packaging and it doesn't make unrealistic claims. Traders still believe the bought robots with there made up track records will beat it but they don't and never will. 

The system takes discipline to follow as its long term but on the plus side, you only need 30 minutes a day or less to operate it and it gives you an objective signal which you simply follow. Some of the great traders such as Richard Dennis, have been fans of the system so if you use it, your in very good company. 

The system is called the 4 Week Rule, it's been used for decades by savvy traders and has made countless millions in profits. Check out this free forex robot and you will be glad you did and remember - it costs nothing and is totally free.

Learning How to Exit Forex Trades Properly

For newer currency traders, the main focus should be entry points. The exit should be determined by your risk to reward. For example, if we are risking 100 pips on the trade, we should look to take profits when we are up 200 pips in the trade. That is the basic rule. I might suggest increasing that to 300 pips and a 1:3 risk to reward ratio.

Now, of course, we might hold for a longer period of time in some situations. But that is a little more advanced. Learning to exit is the most difficult aspect of currency trading. Even extremely successful forex traders struggle with exits from time to time. We should learn how to enter and place our stop first. This should be very mechanical. Exits are more of an art form.

The key point is that we should strive to acquire an exit problem. What to do with all these profitable trades? You might spend the rest of your trading career dealing with that issue. My point is that it is a good problem to have. But many traders do not get to that point because they have not mastered the entry, which in relative terms, is a lot easier to master.

Losing in Forex? Stick to a Trading Plan & Study Your Mistakes

Forex traders lose money in currency market for many reasons. They may not have the right methodology to trade with. They may not have clear understanding of how the market works, key indicators, key numbers, and ideal times to trade. Risking too much per trade and not being mentally prepared for the ball game.

Whether it’s the result of unexpected market events or simply a poor trade idea, losing money invariably leaves one with a miserable feeling. Worst still if it is happening over and over again- a trader also feels loss of confidence and right attitude.

In my tenure as a trading coach and guide I have come across and observed many traders who consider putting in real money even when they are losing with their demo account. I don’t think anything can be worst than that. But then there is little you can do as a coach when someone has lost the sense of direction.

Some of the most common consequences of losing in Forex could be that the trader gets into frenzy and makes haphazard trades without a pre-plan and as a result losing even more, or the second outcome could be that he may be so scared of incurring any more losses that he starts to avoid trading.

Real traders are those who don’t lose mind and fret over losing trades for too long and take the message in the right frame of mind. They normally resort to studying the mistakes they made along with the prevailing market conditions to the time the losses occurred.

The traders try and take a micro view of the factors that resulted in price movements. These in-depth analyses done inside out will help these people to develop better and more realistic trade strategy for the next time similar situation crops up. A trader should make it his habit to review his trades whether they are winning or losing deals. This ongoing process of studying his trades and mistakes will help him to improve his trading strategy and system. This will help him gain perspective that works. He will be able to bring down the number of losing trades over a period of time as he will be learning new market patterns and adapting to them.

The process of learning can be broken up into three phases: Analyzing the trade itself, reviewing, and innovation. Let us first look at the act of analyzing the trade. Analyzing your trade irrespective of the final outcome, whether the trade resulted in loss or profit is the first step towards building a career as a successful and professional forex trader.

Next comes reviewing or feedback. A trader should remember at all times that he is not in a position to watch himself as he trades. In such a situation it becomes important that he takes a third-person’s point of view, keep a note of every aspect of his trade from his thinking pattern, to market movements, and based on the facts he can analyze if what he did was right or wrong.

After you have kept a record of what and how you’ve traded, the next step for the trader is to incorporate changes, bring amendments, and rectify the mistakes wherever required.  

If during the second phase of reviewing some lacunas were found they have to be taken care of at this stage. It could vary and cover any aspect right from changing currency pairs to market timings to changing the trading system or spending some more time on demo account.  By taking this exercise up a trader can compete and develop his skills much, much faster.

The impact of the recording, reviewing and making adjustments and re-aligning the procedure turns the trading deal into an experience you can learn something from which indirectly speeds up the learning process. And come to think of it, it is not difficult at all. It’s simply a matter of forming a habit and sticking to it.

A wise trader will also try and steer clear of the psychological pitfalls.  He will make sure that greed to make a quick buck, or extreme fear of losing money in trade will not get better of his sensibilities and market realities.  A Forex trader will make sure he does not overtrade and his money management skills are in place.

Being in a hurry or indiscipline is another major pitfall for a trader. When a trader is on a losing spree one after the other he tends to throw the trading plan out of the window and soon thus abandons some perfectly good trading methods. A trader should understand that every trading method has its time and situation frame within which it succeeds. At other times it could perform below average. A sensible trader will realize that no matter how good a trading base be, it cannot perform, at peak efficiency under all types of market conditions. If you want to become a successful trader in the long run you will have to inculcate the discipline to stick it out through the hard times without losing the focus.

To become a successful trader, you have to stay composed, be rational and emotionally detached. These traits are generally found on new traders. Experienced traders are far cooler and composed and have learnt over time that you’ll win some and you’ll lose some. An experienced trader trades with enough money to allow for a buffer when losing deals come. You should be ready to handle the losses, because they are inevitable and are bound to be there. A trader learns to control his emotions after wins. Learn to take winning in your stride. Automatically you will learn to handle losing deals too.

So that is that. Lose money. Do not lose the lesson. Do not let learning stop.

Our Forexoma Live Market Analysis program is a perfect training course for those who want to become independent and profitable traders. The most important feature of this program is that it teaches you home to trade like a professional and disciplined trader. Lack of discipline is the biggest problem of 95% of traders. Our program helps you learn to have and keep the discipline that a professional trader needs.

What It means to Be a Successful Forex Trader?

People often misunderstand what it actually means to be successful. According to an average guy, a successful trader is the one with a lot of money who can lead a dream lifestyle without having to look at the price tag! But that isn’t what it means to be a successful forex trader. A successful trader on the contrary is the one who has built enough wealth to create enough cash-flow every month, to cover his or her expenses for the rest of his life. So basically a successful trader is the one who is on his way to create assets that he can survive on whether he works or does not. Money will be flowing in perpetually.

Creating assets should be the main objective of a forex trader. A good trader knows how to align all his assets in a way that they will provide him with a steady monthly income. A successful trader or an aspiring individual who wants to make forex trading his long term career will not look at a paycheck because he will be working towards creating a steady income for himself. So if your assets make more than enough money to cover your expenses, consider yourself a successful trader. Building wealth and investing it wisely will last forever. Short term gains won’t.

A smart and successful forex trader will make his money work for him. He will probably invest into bonds, stocks, businesses, gold, or real estate, so that it’ll make more money in future. Once a trader learns this little secret he will never need to really worry about having a job, if things do not work out because he will never need one if he is focused and clear about his goals.

Majority of forex trading individuals are the people who became successful and rich and weren’t born with a silver spoon in their mouth. It took them hard work and dedication to become successful.

When we are in middle and high school, we’re taught that we can make money by getting a good job. Since this is so deeply set in our minds and we are conditioned that way and as a result majority of us get addicted to the idea of a job or an hourly wage. We have not programmed out mind for anything other than that.  We think of hourly wage, monthly paychecks, yearly bonus, jumping jobs, corporate career etc and do not contemplate doing something unique that will help us build more wealth and will make us many times more financially and emotionally secure as compared to keeping and going on with a drab job.

I am hoping through this article I am making some sense to the readers that will make it easy for them to tell when an individual is successful and rich or not. If a person’s assets produce enough money every month to cover his or her expenses, then that person is successful as a forex trader.

Ways in Which Individual Investors Can Benefit From Forex Trading:

There is little doubt that all these years’ only large multinational and individual banks and major financial institutions had been dominating FX trading but the changing times have given way for a paradigm shift in the nature and type of investing. Forex trading has become accessible and has been on an upswing amongst fellows from all walks of life so much so that these days’ start-up firms are competing directly with financial institutions to serve investors in the new technologically driven economy. And in this entire hullabaloo the real winner is the customer. Internet has empowered the individual investor to take control of his own investment strategy in forex trading.

Now as we already know that like in the past, foreign exchange trading is no more limited to large banks and institutional traders. With recent advancements in technology even small traders are taking advantage of the benefits of forex trading with the help of online trading platforms. Forex trading is on 24 hours a day and 5 ½ days a week.  Online trading has revolutionized the currency markets by making it accessible to the small and medium sized investor. Investor is jumping at the rooftop all excited. It’s an opportunity for him to build wealth if he learns to make use of it with his mind and eyes open.

The forex trading is perhaps the largest financial market in the world. Forex trading is about simultaneous buying of one currency and selling of another. The world’s currencies are on a floating exchange rate and are always traded in pairs, for example EUR/USD or USD/JPY or USD/INR etc.

In the new millennium, the forex trading has become accessible for an individual investor or small group of investors. Forex traders have been seen to reap many benefits from forex trading as compared to stock market, e-mini futures and such other trading.

Today mostly traders are choosing forex trading in comparison to stock trading because while there are around 4,500 or may be more stocks listed on the New York Stock exchange, and 3,500 are listed on the NASDAQ.  In spot forex trading, you have 4 major markets, 24 hours a day 5.5 days a week.  You are more likely to do well in terms of finding good trades in forex as currency pairs are limited and fixed. Forex trading is easy and hassle free as compared to stock/future market.

Not only is it an accessible, easy and less capital-intensive business opportunity, but it is much more cost efficient too to invest in the forex market, in terms of both commissions and transaction fees as compared to Stock or other forms of trading. Commissions for stock trades as generally observed range from $7.95-$29.95 per trade with on-line brokers to over $100 per trade with traditional brokers. When you compare these notes with stock trading the stock commissions are related to the level of service the broker offers to its members. Traditional brokers offer full access to research, analyst stock recommendations, and so on. Online Forex brokers on the other hand charge significantly lower commission and transaction fees.

What Does Discipline Mean in Forex Trading?

Everybody has a different definition for discipline.  Most people think that discipline means seriousness in doing something. This is true but discipline has a wider meaning when it comes to forex trading.

In forex trading, discipline means following your trading system rules exactly and precisely. Over 95% of forex traders lose, not because they do not have a good trading system or they have not learned the techniques. They lose because they fail to follow their trading system rules. They lose because they have no discipline. When you ask them about the techniques, indicators and systems they use, they explain very well, but when you ask them about their performance and results, you will see that they are not profitable yet.

• Do you trade without setting a proper stop loss?
• Do you make your stop loss wider when it is about to be triggered by the market?
• Do you trade everyday, even when there is no strong trade setup?
• Do you insist to take a position whenever you sit at the computer?
• Do you try a different trading strategy, time frame, indicator and… everyday?
• Do you take a position when you hear that someone else has the same position or some people say that a currency goes up/down against another currency?
• Do you close your positions before they hit the stop loss or target?
• Do you take too much risk?
• Do you overtrade?
• Do you overanalyze?
• Do you take a position because you need to make money?

If the answer of any of the above questions is positive, it means lack of discipline is your problem and you will keep on losing as long as you do not change yourself and you don’t trade like a disciplined trader. And finally you will give up and you will lose the chance of making money through forex trading for the rest of your life.

Who is a disciplined trader?

A disciplined trader…

• Has a well-developed and at the same time simple and practical system.
• Trades only when there is a strong and perfect trade setup. He doesn’t mind not to trade for several days. He is like a hunter. He doesn’t waste his bullets when he knows that the prey is not close enough.
• Doesn’t look for new trading systems everyday, because he has come to this conclusion long time ago that his own trading system is the best for him and he has the best result with it. He also knows that there is no Holly Grail system and “grass is not greener on the other side”.
• Sets a proper stop loss for each of his positions and never makes his stop loss wider when it is about to be triggered by the market.
• Never lets a profitable and nice trade to be converted to a losing position because of maximizing his profit and breaking the others’ records. He knows where he will be out as soon as he takes a position.
• Never tries to make a huge profit by taking too much risk. He is always loyal to his Risk/Reward and money management rules.
• Never gets upset when the market hits his “reasonable stop loss”.
• Never regrets when he misses a strong movement just because the trade setup that was formed before the movement, did not look strong and perfect enough.
• Doesn’t get overconfident when he achieves several winning trades or even several winning days, weeks, months and years.
• Doesn’t lose his confidence when he has a losing position, day or even week or month.
• Doesn’t take a position just because the others have the same position or he has read or heard from somewhere that a currency will go up/down against another currency.
• Doesn’t take any position based on his thoughts. He trades based on the signals that he sees on the charts.
• Doesn’t overanalyze.
• Doesn’t overtrade.
• Doesn’t see beyond obvious. He just sees the signal which is in front of his eyes.
• Is not greedy.
• Has no fear.
• Doesn’t exaggerate about his success.
• Is humble and helps the novice traders to find the right way easier. He never misleads the other traders, specially the novice ones. He is aware of “Karma”.
• Is…
• Doesn’t…
• Is…
• Doesn’t…

Are you such a person and trader or you are trying to make money through forex trading while you have not reached to such a level of confidence, discipline and personality?

Forex trading is not about the techniques and trading systems only. 90% of forex trading is related to the things that I explained above and this is what Forexoma members learn to achieve. They not only learn the techniques, but they learn to become a disciplined trader within the shortest time. I help them not to make the mistakes that 95% losing traders do, the mistakes that I also made when I started.

I tell them how I was about to give up at least for a few times, but I gave it one more try and finally I reached to the level that was described above. I recommend you to join us. There is nothing to lose. However if you don’t join now, one or two months later can be too late, because I can not continue this service forever.

Ten Important Forex Trading Tips

1. Do not trade forex if you have to make money. Emotions have a strong impact on forex trading and if someone has to make money, he will have more emotions than someone who likes to make more money, but doesn’t have to. If someone is desperate to make some money to pay his bills and mortgage, he loses money in forex, because he trades when there is no sharp and confirmed signal. You can become a full time forex trader and you can trade forex for a living later when you learn it properly and completely. At the beginning, you should have another source of income that covers all your expenses, otherwise forex will not have any good result for you.

2. Do not compete with the other traders. Any trader has a different trading style and strategy and so traders pip and money results are different from each other. While someone doesn’t like to take more than 2% risk in his trades and he is happy with a 5-10% profit every month, another trader may like to take a 20% risk and he likes to double his account every month. It takes a while until a new trader finds his own style and when he does, he should never even ask how much the other traders make. Trading is like walking on a tight rope. You lose your balance and fall down if you try to walk faster than what you can.

3. Trade the signals not the trades! After having a few successful trades and growing your capital, you may think that you can take a little more risk and also take the signals that don’t look good and strong enough. Then you will lose all you had made in your good trades. Whatever that your previous trades are, winning or losing, it doesn’t matter. You should forget them. You should only focus on the signals that form in front of your eyes. Do not risk more than usual, both in lot size and in signal quality, just because you have been successful in the past few days and you have more money in your account. You can lose all the profits you have made in a few minutes.

4. Break your rules and you get burned. If you have become a disciplined trader after so many months or years of practicing and learning, you should keep in your mind that if you break any of your trading rules, you will be in trouble and you will lose again. Forex market doesn’t know you. It doesn’t know if you are a new trader or you have been trading for several years. If you make a mistake, you lose. No matter how experienced you are. Here are some of my trading rules that make me lose (or lose more) whenever I break them:

• Moving the stop loss: Each position should have a reasonable stop loss. Let your stop loss to be triggered. It is there to take care of your capital. Do not move your stop loss when it is about to be triggered. I lost more whenever I did it.
• A tighter or wider stop loss: As I said, each position should have a reasonable stop loss. A tighter or a wider stop loss means bigger or more frequent losing trades. Whenever I broke my stop loss setting rules, I lost more.
• I lose whenever I take a position that has no strong and sharp signal. When any of my system rules are not met and I take a position, that position will be a losing position.

5.  In forex trading, over-confidence is more dangerous than having no confidence. Someone who has no confidence, doesn’t do anything. There is an advantage in it. He doesn’t lose any money. But someone who becomes over-confident after a few successful trades, will blow up his account in one trade. A few good trades don’t mean that you are a professional and advanced trader. Like a few bad trades that don’t mean that you are a bad trader. Over-confidence is something that you will experience several times while you are still learning. You will learn to recognize this dangerous emotion after having some losses promoted and motivated by it. Anytime that over-confidence causes you to lose, you lose your confidence and feel more fear. If you don’t give up and keep on practicing, you will gain your confidence again, but you will become over-confident because you forget the problems it made for you the last time. So you lose again. And this cycle may be repeated for several times until you learn to recognize and control your emotions. Of course if you do not totally give up during this up and down. Monitoring your behaviors, emotions and thoughts help you to pass this stage sooner and easier. It is the most important stage in forex trading and most people give up at this stage. Those who come to a balance will become profitable traders. They are not over-confident and so they do not ignore any of their trading rules and they analyze the market properly and precisely to find the best trade setups. At the same time, they have no fear because they are confident enough. This is the balance.

6. There is nothing more important than experience in forex trading. Sometimes you see a trade setup, but your experience tells you not to enter. This experience can be gained through practicing. There is no magic formula in forex trading that can be given to you and make you a profitable trader overnight. It takes time and needs practice.

7. Do not take any position just because someone else has the same position. Novice traders are used to exaggerate about their success and hide their failure. Whenever they make a good trade, they talk about it with a lot of excitement, but they are not used to talk about their losing trades. This may make you think that some people are the best traders of the world and so when they say they are long or short, you take the same position just because they have the same position. This will not make any money for you, nor makes you a trader. A professional and profitable trader is humble, because he knows that Forex market breaks the bones of a bold and stubborn trader who knows himself as the best trader of the world. Market is stronger than all of us. Nobody can defeat it.

8. Do not try so many systems. I takes your whole life and you are still trying. Some people have a researching spirit. There is nothing wrong with it. It is even very good. But when it comes to Forex trading, researching spirit does not let you make money, because it causes you to spend all your time and your life to try and compare different systems and methods. After a while of trying, a rational beginner will come to this conclusion that the secret is not in trading system. The secret is in discipline and controlling of the emotions. So he stops trying, chooses a suitable system and starts making money through it. Whereas other beginners keep on testing, trying and comparing and will finally give up after wasting a lot of time and money.

9. Keep it simple. A Forex trading system does not have to be complicated to work. In contrast, simple systems have better results.

10. Take a break every now and then. You do not have to work hard to make money through Forex. In contrast, spending too much time in front of the computer and trying to take all the movements will make your mind and body too tired and then the chain reaction of bad positions will be triggered. You can not force the Forex market to work for you. It will not. As I said earlier, it does not know you and it has no mercy for you. YOU have to take care of yourself and your capital. Forex market does not do it for you.

Currency Pairs Explained

Currency pairs are among the most popular questions I am always asked. Sometimes it surprises me how someone wants to trade forex while he/she still doesn’t know about currency pairs. But I should not be surprised, because we always focus on advanced topics like technical analysis, candlesticks and indicators and … that we forget about the basics. We do not consider that beginners may have difficulties in understanding the currency pairs that are the foundation of forex and forex trading.

What are the currency pairs in the forex world?

In stock market, you trade shares of companies. You buy and sell them. You pay money to buy stocks. But what if you wanted to trade or buy and sell a currency?

In the stock market, companies’ shares are commodities and the currency you pay to buy them is the money. It is the same in any other kind of trading. You pay money to buy a commodity. In forex or foreign currency exchange, you trade currencies. So again, you have to pay something to buy something else. You pay a currency to buy another currency. You sell a currency against another currency. To be able to do that, they have created currency pairs. For example EUR-USD is a currency pair. In each currency pair, the first currency is the commodity and the second currency is the money. In EUR-USD, the first currency which is Euro is the commodity and the second currency which is USD is the money. When you buy EUR-USD, in fact you pay USD to buy Euro. No matter in what currency your forex trading account is. You can have a trading account in USD, GBP, CAD or any other currency. When you want to buy EUR-USD, your broker changes your trading account capital into USD and then pays that USD to buy Euro. This is how it works. Any trade in forex market has to be done through USD. US dollar is the main currency and is the axis of all transactions in the forex market. Any currency pair that you buy or sell has to be done through USD. However, all of these process will be done automatically and you just need to click on the buy or sell buttons.

Lets get back to our example, EUR-USD. I told you that when you buy EUR-USD, in fact you pay USD to buy Euro or you buy Euro against USD. In forex market it is possible to sell EUR-USD even before you buy it. How? Let me give you an example. You borrow my car for two weeks. Suddenly you see someone wants to buy the car from you with a good price like $5000 above the real price. You sell my car. But you have to return my car after two weeks, right? When it is time to return my car, you go and buy the same car exactly, but with the real price which is $5000 lower than the price that you sold my car. You return my car while you have made a $5000 profit.

This is what we do when we sell a currency pair before we buy it. You sell EUR-USD high and buy it low. You sell it low and buy it lower.

When you buy a currency pair, you take a “long” position and when you sell a currency pair, you take a “short” position. Long and short are just the terms we use in forex and stock market and they have nothing to do with the length of anything. They are just terms. Of course usually it takes longer for the price to go up and shorter to go down. That’s why when you buy, they say you have a long position because it may take a long time for the price to go up. And when you sell, they say you have a short position because it may take a shorter time for the price to go down.

Anyway! So when we say we go long with EUR-USD it means we buy it and visa versa.

Now lets answer the “frequently asked questions” I always receive about currency pairs:

1. What are the forex major currency pairs? There are four major currency pairs in the forex market: EUR-USD ; GBP-USD ; USD-JPY and USD-CHF.

2. What are the most popular currency pairs? Among the four major currency pairs, EUR-USD is the most popular and has the highest volume of transactions. They say more than 70% of transactions in the forex world is focused on EUR-USD. But it doesn’t mean that 70% of personal forex trader like you and me trade EUR-USD only. Forex market is not limited to what forex traders do. In fact, forex traders are a very small portion of the forex market. The big transactions are done by the big InterBanks and central banks. Sometimes they do it not because of making profit, they do it because they have to. Sometime a country has to sell its own currency against another currency to lower its currency value and control its price.

The most popular currency among personal forex traders is GBP-JPY and EUR-JPY and also GBP-USD. GBP-JPY is the king of the currency pairs for private forex traders. The reason is it is so volatile and strong. Its trading signals are sharp and strong and it has a wide movement scale. Forex traders trade GBP-JPY to make more profit, but this sword has two sharp edges. Your losses can also be bigger.

3. What are the most liquid currency pairs? EUR-USD is the most liquid currency pair because it has the highest trading volume. However, you will not have any liquidity problem in the forex market because it is such a huge market. It is not like the stock market that sometimes you can not find a buyer for the shares that you have already bought and you want to sell.

4. What are the most active currency pairs or the most volatile currency pairs? As I said, GBP-JPY is the most active and the most volatile currency pair. EUR-JPY has the second position in volatility and activity. GBP-JPY and EUR-JPY usually have the same direction. It means when one of them goes up the other one goes up too and visa versa. GBP-JPY and then EUR-JPY are the most traded currency pairs among forex traders.

5. What are the best currency pairs to trade? I don’t know about the other traders, but if you ask me about the best currency pairs to trade, I say any currency pair that shows a strong and sharp signal at a time, is the best currency pair to trade. I see some traders who fall in love with a special currency pair and try to trade only that one. This is wrong. You limit yourself and ignore the free opportunities that the forex market has given you. There are several currency pairs on the forex market that you can trade. Why should you ignore all of them and focus on one pair?

They say you should focus on one currency pair and “master” it. This is another “nonsense idea”. Currency pairs are not like different jobs that you have to focus and master one of them. It has the the same rules and techniques for all of the currency pairs trading. A support line breakout is a sell signal in any currency pair. Find a valid support line in a currency pair and go short after its breakout. No matter what currency pair it is. You make money. Of course don’t forget to set your stop loss  

All joking aside! Do not believe everything you read and hear. Some people start writing articles and e-books when they give up on becoming a profitable forex trader. So they try to make money through selling their e-books and forex training courses. Unfortunately 95% of the books, articles and training courses are written and managed by these people. And those articles, books and training courses are the main sources of “nonsense ideas” like the one that I explained above.

Anyway

6. What are the best times to trade currency pairs? Again I have my own answer to this question and my answer can be different from the others’ answer you may find over the internet. The best time to trade a currency pair is when it forms a strong and sharp signal. Period!

This question is mainly asked by intraday traders who trade using small time frames like 5min or 15min. They want to have a trading session every day and they do not like to have any open position during the night. Whether I agree with this idea or not, I will not focus on it here because this article is about currency pairs.

There are three main sessions in forex market: London session, New York session and Asian session. London session is from 8am to 4am GMT. New York session is from 8am to 4pm EST and Asian session is from 7pm to 3am EST. Forex market has the highest volatility when both of the London and New York markets are open which is about 8am to 1pm EST. Then at 4pm EST that they close the New York, the forex market becomes so slow. But after a few hours, Japan and then Australia start working and so forex market becomes volatile again.

Back to the question that “what are the best times to trade currency pairs?”, I have to say that when forex market become active and volatile, all of the currency pairs move, not just some special currency pairs. It doesn’t matter what session it is. So basically this question is not a correct question. You can trade any currency pair when market is moving and there is a forex signal.

7. What are the exotic currency pairs? USD-SEK (Swedish krona), USD-DKK (Danish krone) and USD-NOK (Norwegian krone) are the most famous exotic currency pairs. They are called exotic because of their pip value. Their pip value is much smaller than the other currency pairs like EUR-USD. When you trade one of these pairs for the first time, you may not believe your eyes when you calculate your stop loss and take profit. A stop loss that has to be placed above the previous candlestick, has a several hundreds of pips value. But don’t scare. Those pips are not like the ones your see in other currency pairs. I call them mini pips. They are about 1/10 of the value of the normal pips.

Exotic currency pairs are not limited to those three. EUR-NOK, EUR-SEK, EUR-DKK and GBP-NOK, GBP-SEK and GBP-DKK are even more exotic

There are also many other exotic currency pairs like USD-RUB (Russian Ruble), USD-CCK (Czech Krouna), USD-HKD (Hong Kong Dollar), USD-HUF (Hungarian Forint), USD-LVL (Latvian Lats), USD-MXN (Mexican Pesos), USD-PLN (Polish Zloty), USD-ZAR (South African Rand) and … … … .

8. Do you have the currency pairs list? Each forex broker supports different number of currency pairs. However all of them support the 4 major currency pairs and most of the other popular and known currency pairs. Here is the list of the currency pairs that I check every day in Forexoma Live Market Analysis:

EUR-USD
GBP-USD
AUD-USD
NZD-USD

USD-JPY
GBP-JPY
EUR-JPY
CAD-JPY
AUD-JPY
NZD-JPY

USD-CAD
EUR-CAD
GBP-CAD

USD-CHF
EUR-CHF
GBP-CHF
CAD-CHF

USD-SGD
USD-DKK
USD-SEK
USD-NOK

EUR-AUD
GBP-AUD

EUR-GBP
AUD-NZD

When You Will Become A Professional Forex Trader?

I received a comment on the December 24 report from a gentleman, Sambhunath, that made me write and post this article. Sambhunath says,

” While moving around aimlessly in the internet, I have chanced to come across your site. It appeared so attractive that I have gone through as many pages as I could and finally come to the conclusion that I must visit this site regularly.
As for myself, I am relatively new in the field of currency-trading. I had read a lot of e-books and practiced my acquired skills in some demo-accounts. Enthused by consecutive and relatively consistent success I started to believe that I had mastered all the skills necessary to become a successful currency trader. I then opened a real account with all the savings I had and started my real journey. The consequence of my endeavor proved to be fatal !!!!
I have lost all my money. I do not understand why for some days I remain puzzled and behave most irrationally and lost my all.
This blow has proved to be an eye-opener. I have realized that my knowledge about both the market and about myself is far from satisfactory. I am yet to learn a lot before even thinking of playing with real money. I have to learn everything afresh from a real master. I still believe that I can learn the subject and in course of time I must be a successful trader.
I have wrote so many things just for the new-comers. This is not just as it appears. It is purely a game of applied psychology- controlling impulses of fear and greed- applying earned knowledge judiciously.
I cannot sufficiently express how happy I am meeting you. You are the person I am looking after.
You have started an excellent work. Countless people around the world will remain thankful to you for ever. “

I appreciate his kindness and I am happy that my efforts could be any of help. Unfortunately, this happens to more than 95% of the beginners and he is not alone. Something that changes a beginner to a professional trader should happen after this stage but unfortunately 99% of those who come through this stage, give up and never think about forex or any other kind of investment and trading. They will complain that they are not for trading and they can not become traders.

I have explained in one of my other articles that you have to have three things to become a good and successful trader:

1. Knowledge
2. Experience
3. Suitable mental and psychological condition

A professional forex trader is not someone who makes money with each and every trade. When he loses in a trade, he tries to find the reason. If you lose your money as soon as you start working with the real account you should ask yourself that “Do I have enough knowledge? Do I have enough experience? Am I mentally and psychologically ready to trade with my money?”

If you answered no to any of the above questions, you should not trade with the real account.

You can learn everything about forex trading through the internet. Internet is full of free and invaluable information about forex. There are also free videos that you can watch and learn a lot. They all talk about trends, patterns, indicators, candle sticks, fundamentals and … and you can learn all of them word by word.

Then you sign up for a demo account and start trading. Sometimes your first trades are very good and it deceives you that you have learned everything and now you can trade with real money but you don’t know that forex market is like an ocean. Sometimes it is calm. Sometimes it is stormy and sometimes there is a Tsunami because of an earthquake. Someone who has experienced sailing when the ocean has been calm may think that he is a sailor but he is not aware that the storm is on the way and he is not experienced enough to face a real storm. He goes to ocean and becomes trapped by the storm.

Professional forex trader means someone who has built his confidence through enough practicing and repeating his success. Beginners should keep in their mind that a few successful trades with the demo account doesn’t mean that they are good traders and a few successful trades with the real account, doesn’t mean that they can increase the amount of the trades.

Beginners have to keep on trading with the demo at least for few months. The other thing is that they have to have a system. Trading with the demo account without an especial and well-described system is wasting of time. You have to know what kind of signals you should be waiting for before you buy and sell and you should know that you only buy and sell when you see the signals not when you think that you are seeing the signals. Like waiting behind the red light. You start moving only when you see the green light.

So you have to trade with the demo account at least for few months. You have to learn to get stuck to your system. You have to learn to control your emotions. You have to learn to control your fear and greed before you start working with real money.

Unfortunately some greedy brokers push the beginners to open real accounts. They are not smart enough to understand that they have to have long term traders not one day traders. Most beginners who lose their money, will never reload their accounts and so the brokers will lose them for good.

When you work with the demo account for few months, you feel a confidence in your heart. This confidence is not a false confidence because it is gained through practicing and experiencing. If you don’t feel a true confidence, keep on practicing with the demo account. It doesn’t matter for how long. One year or even two years. Nobody has determined a deadline for you. So don’t rush. The market is always there waiting for your money.

Then open a real account but please note that after opening a real account, you are at the BEGINNING of a new stage. Yes! Working with the real account is different from the demo account.

Why? Are the signals, charts, indicators, currency pairs and … different?

Absolutely not. They are all the same but something that is different is that you know that you are playing with your real money. The money that you have been working to the bone to collect. You don’t like to lose it. You want to increase it.

What will happen then?

You trade with more fear and greed. You don’t close the trade that goes against you because you don’t want to lose. You wait for the price to change the direction but it won’t and finally you decide to close your trade when you have lost a lot.

Or you keep a good trade to make more profit. You ignore the reversal signals and so you lose all the profit you had in your hand.

Sounds familiar, doesn’t it?

So what should you do?

1. Start learning first and complete your knowledge. Learn everything that you should know about the trends, patterns, support, resistance, candle sticks, reversal and continuation signals and … . There are a lot of websites that have these information for free. You have to spend at least three months to learn all these things.

2. Decide that if you want to be a swing trader or an intraday trader. As a beginner you should choose one of them because you have to be focused on one thing first.

3. Choose a system (strategy). Your system should be as simple as possible. Complicated systems are not applicable. You can only lose with them. A System should be as easy as 1, 2, 3. Also choose a system that works according to technique and knowledge not according to superstitions. In an e-book I read about a strategy that says you should buy when you see the price has gone up for 80 pips before noon!!!

4. Start trading with the demo account using the system you have chosen. If you see that you don’t like your system or it is not good, change it. Find a better and simpler system. Get stuck to it and test it over and over and over. Spend several months to one year with the demo account. Do not be fooled by some of the forums members who say “I have started working on forex two months ago and now I make 100 pips everyday”. This is not true.

5. Forget that the account you are working with it is a demo account. Consider it as a real account. When you see you are losing, think that it is your REAL money that is burning. And when you see that you are making profit think that it is going to your real bank account. Keep in your mind that if you rush and trade emotionally you lose your money. This will help you to experience your fear and greed before trading with the real account. If you experience them, you will learn to control them. Don’t let them show themselves right when you start trading with your real money.

6. Then start working with a real account BUT trade with a very very small amount of money. I don’t care if you have a $500k account or a $100 account. Start trading with the minimum amount that you can place an order. Keep on working with this amount of money for a few weeks. If you saw that you are trading exactly like when you have been trading with the demo account, increase the amount of the money gradually. Do not play with a huge amount of money after a few successful trades.

7. Don’t give up! Don’t get disappointed when you lose. Everybody loses at the beginning. Even the best traders lose in some of their trades. Learn from your mistakes. Keep in your mind that losing is part of the game. We do not practice to learn not to lose. We practice to learn how to lose small amounts and win big amounts. Your stop loss will be triggered in some cases. This is natural. It should not prevent you from entering to another trade.

If you work in the way I explained above, you will become a professional trader in about one year without losing your money and without having to reload your account.

Happy trading

Is Forex a Suitable Business for Everybody?

I am an internet marketer and blogger more than a forex trader but forex is something that I also make money with it and I know a lot about it. Forex is a really different business. To make money with Forex, you have to know the technique and have enough experience otherwise you lose more than what you make.

But in other businesses like internet marketing, you can make some money even if you are not an internet marketing guru.

The good thing with forex is that you don’t have to be worried about competition. Unlike all other businesses that competition makes tougher conditions for everybody, the more people work on forex the more money everybody will make because it will make more volatility and movements in the market and volatility and price fluctuation is what we make money through it.

If you don’t know what the forex is, follow the link below: How to Make Money with Forex?

So forex is a good business but is it a suitable business for everybody?

To become a forex trader, first you have to learn it. It is not very hard to learn forex. There are enough free information over the internet. You just need to spend a few months to learn everything. But the more important part is the experience. You have to learn how to use your knowledge to trade and make money.

Forex is like driving. You can sit at home and read a lot of books about driving and know about it more than a driver who has a 30 years experience. But as long as you don’t practice and don’t drive, you will not become a driver. To be a good driver you also need to have a healthy body and mind otherwise you will make problems for yourself and the others. This is true about forex too. Not everybody who knows the techniques theoretically can be a good forex trader.

You have to have three things to become a good and successful forex trader:

1. Knowledge
2. Experience
3. Suitable mental and psychological condition

If you lose more than what you make in forex, you don’t have at least one of the above essentials.

As explained above, the knowledge can be gained easily and for free through the internet.

The experience can be gained through practicing with the demo account. Any of the forex broker companies offer free demo accounts that enable you to practice and learn to use your knowledge practically.

But what about the last factor? Suitable mental and psychological condition!

You can lose money in forex even when you have enough knowledge and experience. Why?

What kind of people, with what kind of personality, lose more in forex even when they have enough knowledge and experience?

1. Impatient people:

If you don’t have enough patience when you work or when you wait, you will have problems in forex. Forex needs a lot of patience. Sometimes you have to sit at the computer and watch the charts for several hours. Those who don’t have enough patience, get tired very soon and start entering to the trades while there is no clear and suitable signal and it is not the time to get in a trade. Then they will have to close a wrong position while they have already lost a lot of money.

2. Greedy people:

Those who are greedy are big forex losers. Greed cause you rush to enter to a trade when it is not the time because you think that the others are making money and you have to do it too. So you don’t wait for a clear signal and you just dive to a trade with this hope that you will make money whereas in most cases you will choose the wrong direction.

On the other hand, greedy people stay in trade for a long time and don’t end it when it is time to end. They keep the position to make more money but the market will change the direction suddenly and all the profit they had in their hand will be lost.

3. Fearful people:

Fear is the biggest problems in forex trading and generally fear is the biggest problem and obstacle in all the businesses. Fear keeps people from taking risks and those who have a lot of fear can not use the opportunities because they are always afraid of losing. They wait and wait and wait and lose the opportunities one by one and then get tired and try to overcome their fear and so they enter to the wrong direction before proper market analyzing and finding good signals. What will happen then? They lose money.

4. Emotional people:

If you are a person who makes his decisions emotionally and not wisely, logically, analytically, then forex is not for you because you will lose a lot. Forex is a technical and scientific business. It works according to the scientific rules and analysis. Forex traders use special indicators and signals to decide to buy or sell. They act only when they see proper signals and not when they feel that the price will go up or down.

Something you feel can be wrong and so if you trade according to what you feel, you lose.

Emotions are good but not in business, forex or stock trading. If you are an emotional person, you should not try forex trading unless you learn to control your emotions and use your knowledge.

How can you control your hastiness, Greed, Fear and Emotions in Forex trading?

This question can not be answered in just one article and I will write more articles about any of the above problems but here is some tips:

If you are a hasty person and this has made problems for you both in your life and forex, you have to practice Yoga, meditation or maybe hypnotism to become able to control your hastiness.

In case your hastiness can not be controlled at all, you may have to see a doctor and check your endocrine hormones like Thyroid, Adrenaline and Noradrenalin.

To control your greed, you have to make a strict discipline for yourself and try to be stuck to it. For example do not make more than a limited number of pips everyday or in each single trade. Tell yourself that you are not allowed to make more than - for example - 20 pips everyday or 5 pips in each trade and as soon as you reach the limit, turn off your computer or close your trade even if the market is still hot and you can make more or your trade is doing well and going to your favorite direction.

To control your fear, you have to spend enough time on learning and practicing with the demo account. You have fear because you don’t have enough confidence about your trading skills. You have to make hundreds of trades on the demo account to make sure that you have learnt the methods completely. Then you need to start with the real account and trading with your money but with a very small amount.

You have to keep on trading with a very small amount of money for several months and when you see that you can make profit and the number of your successful trades is more than your bad trades, you can increase the amount of the money little by little.

Keep in your mind that Forex and stock trading are all the matter of taking risk. The only thing that you have control on is the amount of the money you put in every trade and also the amount of the money that you let be lost. The rest is not in your hand.

Ok 

- What do you think about yourself?

- Is Forex a suitable business for you or not?

- What are your weak-points?

- Are you greedy or you have a lot of fear that don’t let you trade properly?

- What is the reason of your fear? Is it because you think you have not learnt the techniques properly or it is 

because you have made a lot of bad trades and so you have lost your confidence?

Think about the above questions before you make your next trade and please make me happy and thankful with your comments.

Trading Managed Currencies

Managed currencies are those such as the Singapore and Hong Kong dollars, the Chinese yuan, the Russian ruble, where the Central bank doesn’t control the day-to-day fluctuations of the currency, but attempts to manage the direction of the trend by periodical interventions. The interventions are usually formulated through a floating or fixed currency band where the price is allowed to move within a range around a central point which are both set by the Central bank. Usually, only those central banks or monetary institutions with a significant reserve accumulation can aim to manage their currencies effectively, as countering the actions of the market can be costly.

The midpoint and the percentile range within which the price moves are sometimes held as a secret by central banks, and sometimes they are public. It is also possible that the central bank possesses no solid numerical long-term plan for the price range, but moves as the fundamental data flow and the political authority dictate. The policy choice is a secret in the case Singapore, is open in the case of the Hong Kong dollar and is partially public according to data in the cases of both the ruble and the yuan.

Before further explanation, let us say that the predictive power of government policies tends to diminish during periods of volatility and economic turmoil. Central banks are not run by wizards with crystal balls, and usually they do not possess confidence or willpower greater than that possessed by the experienced trader. As a result, policy errors, zigzagging, and conflicting signals generate a lot of noise through which the trader must wade his way to success.

The word “managed” in the phrase managed currency encapsulates the core of our strategy in trading currencies in this section of the market. The authorities make a commitment not to allow their currencies to move beyond the limits of a band, and they are ready to intervene when such a movement occurs as a result of chaotic market action. And, to the further benefit of the trader, newspapers, forex websites, and forex market news providers all declare the presence of central bank authorities when they do intervene. 

In many cases, the central banks also encourage the publication of their presence as they seek to intimidate and discourage those who want to counteract their policies. All that the trader would have to do to profit from such interventions is noting the direction of the intervention, and acting in accordance with it. Thus when we know that the technical indicators are showing extreme values (for instance RSI is at 20 or 80), there’s news flow speaking of intervention, and the central bank has already made its intention to prevent extreme price fluctuations clear, the trader can, with great confidence, make a counter-trend move with a reasonable stop-loss order, and expect to return a meaningful profit. This is a proven and well known method, with very high odds of success.

The behavior of the Monetary Authority of Singapore between October 2007 and April 2008 provides countless profitable examples for this method. In many cases where the RSI registered extreme values, the MAS would intervene, and as traders used the opportunity to pile in, large amounts of profits were made. Counter-trend interventions by MAS were usually easily detectable because of the very large movements in spot within seconds, and they were also noted by Bloomberg and financial news providers.

Conversely, between November 2007 and April-May 2008, the People’s Bank of China allowed the yuan to appreciate in a very regular, and predictable fashion, providing currency traders with a unique opportunity to register risk free profits. Because the central bank manages volatility in a punctual and strict fashion, the risk of any significant reversal was almost non-existent, and policy direction was communicated clearly and decisively by the chief of the institution.

Where do the pitfalls of this method lie? Obviously, the first and foremost obstacle to the success of a central bank is insufficient reserves, or lack of political will. Usually, a central bank will do all that is in its power to ensure credibility but if the market does not find its declarations credible, it has the power to invalidate the schemes of the institution. Similarly, markets are quick to punish those nations where financial policies are and improvised and revised in response to temporary developments. In spite of all this, given the very high level of uncertainty that the forex trader must be used to live with, following interventionist central banks can be a relaxing experience.

Currency interventions are especially difficult when they occur on an isolated basis against prevailing market conditions with insufficient reserves. Given how liquid and vast the forex market is, only exceptionally reserve-rich nations, like China or Singapore, or those with little need of external financing, like Saudi Arabia, can be confident that they have the clout to make their interventions work. 

On the other hand, markets treat those few Central Banks with respect, and they are unlikely to suffer from short term shocks, and their interventions and currency policies have credibility that is not found in other, less financially sound nations.

To repeat, managed currencies can be a source of great profit if they are traded with patience and consistency. The risks involved are usually much lower than those faced when trading floating currencies, with the one caveat that currency crises can quickly wipe out the gains of a long-time if the trader is not sensible with his stop-losses. The principles of sound money management, and low leverage are still valid when trading this type of market. One should avoid bubbles, and it’s not a good idea to chase excessive price movements, especially because the managed currencies tend to absorb a lot of tension by resisting market pressure, and if they break, the reactions can be very violent and fearsome.

We strongly advise the trader to concentrate on one or two managed currencies, if that is the method he would like to employ, to absorb the policy choices and principles of the Central Bank in question, and act in accordance with global developments. The transparency and independence of the Central Bank are both exceptionally important, because we would not want our guiding institution to zigzag or bow to political power, in essence invalidating its statements and policy declarations. Singapore and HK are good choices to begin trading this method.

Here is a list of some currencies with their Central Banks and their policy preferences.

USD/SGD: Controlled by the Monetary Authority of Singapore, this pair is one of the more predictable and easier for those who prefer this forex strategy. Because of the status of Singapore as an importer of necessities like food, the monetary authority of Singapore aims to control inflation through the currency rate, and its policies are regularly and clearly communicated at its website.

USD/CNY: Controlled by the People’s Bank of China, the yuan’s value depends on two important factors: the trade surplus of China versus the Euroland and the United States, and the unemployment situation of China’s rural regions. The central bank does not zigzag, however it’s policies are greatly influenced by the supreme leadership of the nation and their relations with the US government. PBoC allows the yuan to appreciate at times of economic boom and inflation, and generally holds it stable during recessions and economic turmoil.

USD/HKD: The HKD is pegged to the US currency at 7.8, but is allowed in a band of 7.75 to 7.85. Hong Kong’s economic policies are influenced greatly by developments in mainland China, but the nation has a currency board policy, and is mostly independent in its policy choices. The nature of the peg suggests an almost risk free trade in buying the HKD at 7.75 and selling it as it appreciates.

USD/RUB: The ruble is managed by the Central Bank of the Russian Federation. Its policy choices are determined by Russia’s external balance, and the price of oil and other commodities.