FX Trading

Trading money in the global markets can be great way to make more of it, but it can also be a lesson in how to lose money quickly. More than $1 trillion is traded every day on the foreign currency exchange (Forex), and yet no centralized headquarters or formal regulatory body exists for this form of trade. Foreign currency exchange is regulated through a patchwork of international agreements between countries, most of which have some type of regulatory agency that controls what goes on within their respective borders. Thus, the foreign currency exchange actually is a worldwide network of traders who are connected by telephone and computer screens.

It is very important to understand money jargon in FX trading. The world of foreign currency exchange has a unique language of its own. Prices are quoted two ways, meaning that when one trader talks price with another, they state their respective prices in terms of what exchange rate they will pay to buy it and what they will take when selling it. Bid and ask price differences, or spreads, usually are stated in pips or hundredths of a currency units. Spreads normally are no more than ten pips.

Pips are the smallest incremental price movement permitted in the currency market. Although most transactions deal in thousands or millions of dollars, yen, Euros or other currencies, and a one-cent spread can equal thousands of dollars, most currency price quotes nevertheless are extended out to four decimals. Many times, traders quote only the last two digits or the small numbers, because the incremental changes are so small only the last two digits matter. As a trader in FX trading you need to think in terms of the host currency when receiving a quote for direct exchange, which would be an exchange based on the value of the host country’s currency.

FX Trading provides detailed information on FX Trading, Online FX Trading, FX Currency Trading, FX Trading Platforms and more. FX Trading is affiliated with Online Forex Trading Systems.

FX Trading Strategy - To Win it Must Contain These 3 Vital Elements

If you want to win with your FX trading strategy make sure it contains these key elements otherwise you will be doomed and join the 95% of losing traders.

1. It must be Your Strategy!

Don't fall for the hype that some junk robot will give you success or a guru or mentor there are plenty sold online with huge profits in simulation but they don't work - no one gives you something for nothing and forex trading is no different.

Even if you have got the forex education from someone else, you must understand it and have confidence in it so you can follow it with discipline - discipline is the key, you must be able to ride out losing periods and wait until you hit a home run.

If you don't have confidence you will never be able to do this make sure you have it.

2. You Must Understand Your Edge

Your trading edge is the reason you will win when 95% of other traders lose and you must have confidence and understand what it is and it must be based on sound logic.

Many people think they have an FX strategy based on sound logic and do the following and lose.

- They try and predict market prices

- They follow bogus scientific theories

- They trade news stories

- They day trade and try and scalp

- They follow experts

All the above will see you lose if you don't know why, continue your forex trading education until you do.

Your trading edge is something that is personal to you and can be based on a simple forex trading strategy you can execute with discipline - that's enough, remember simple systems executed with rigorous discipline work!

3. Play Defence First

When you are trading on leverage you need to trade great defence first and always protect what you have this means rigorous money management rules and money management is much more than placing a stop!

If you don't keep your losses small you will get wiped out - sounds obvious?

Well most traders don't heed it and use leverage of 200 or 300:1 on a few hundred bucks, 10 or 20 is enough.

Forex trading can make you a lot of money but if you expect not to have to work your in for a rude awakening.

Do your homework, get confident and make sure you have the discipline to stick with your FX trading strategy and follow it through drawdown periods, to long term success and the rewards if you can do this are huge.

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FX Trading Strategy - The Application of Mathematics to Reveal the Theory of Market Movement

Today, traders all around the world are using complex computer programs and mathematical equations to work out the scientific theory of market movement. What are the results and how can they benefit your FX trading strategy?

Let's start with a fact:

Today 95% of traders lose their money and it's the same ratio as 50 or 100 years ago and this is despite all the so called advances in computers, forecasting and number crunching applied and this leads to an obvious conclusion.

Forex markets don't move the certainties i.e. mathematics, they only move based upon odds and you can try as hard as you like to apply science and maths - but if prices move to the odds this is futile. It's obvious:

If markets moved to a mathematical theory, we would all know the price in advance and there would be no market! Common sense - but traders love complexity, it makes them feel safe and they think it cuts risk. They may love it but it won't help them.

Today there is a huge industry in robots and automation is the buzz word and you see extra ordinary profits in hindsight and simulations - but they never work in real time, because no two pieces of data are ever the same and you really are chasing your tail if you try it.

Just as in yester year, simple forex trading systems work best, as they are more robust with fewer elements to break. A simple odds based system should be the basis of your FX Trading strategy. Don't be deceived a simple odds based system can make a lot of money.

The problem today is we are used to science and maths solving problems in life and making our life easier, more comfortable and it does - but that doesn't mean it works in all areas of life and the forex market is one, where it doesn't. You need to keep it simple, have confidence in what your doing and if you do, you can enjoy currency trading success.

So stop trying to beat the market and see it for what it is, a high stakes, high odds game and get the right forex education. If you keep it simple and trade the odds, you can make a lot of money with your FX trading strategy and that's a fact.

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FX Trading Strategy - A Proven Strategy to Catch Every Big Move and Target Triple Digit Profits

If you want to start trading forex then if you make this method the basis of your FX Trading strategy, you will catch all the big moves and all the big profits. Let's take a look at it and how it could lead you to triple digit gains...

This FX strategy is simply based upon breakouts, which is a timeless strategy for profit which works, will continue to work and is easy to understand.

What is a Breakout?

A breakout is simply a break to new high or low on a forex chart

Why is it so effective?

Almost every big move starts from a new market high or market low or a breakout on the chart. Check any forex chart and you will see this occur again and again.

Why Doesn't Everyone Trade Breakouts Then?

Most traders are looking to buy low or sell high and trying to get perfect market timing, by waiting to buy at bottom or sell at the top and wait for a pullback when a breakout occurs. They miss the moves as once a strong breakout occurs, it tends to continue. The trader who waits is left watching the price disappear over the horizon making thousands of dollars and he's not in.

Buying breakouts is not predicting, it's simply trading the reality of a price change on the chart.

Most traders find this hard, they want always to get in at a low and sell at a high which is not possible and therefore miss these moves. If they would have gone with them they would have made money.

What are the Best Breakouts?

Not all breakouts of course continue and many fail, so you really need to concentrate on the high odds ones which are valid. Generally the valid breakouts are ones which have tested the breakout point at least 3 times, in at least 2 different time frames and the wider they are apart, in terms of time the better.

It's basically the more tests, more times frames and the wider they spaced apart the better and more valid the breakout is.

You need to look for areas the market considers important and if a break occurs and most traders disagree with it, it's likely to be a good one!

The best breakouts only occur a few times in each currency per year - but these are the high odds trades and I know traders who make triple digit gains on them and you can to.

Anything Else?

Yes you should always confirm the breakout with momentum indicators. We don't have time to discuss them here (simply look up our other articles) but these are indicators that gauge the strength of price and you want them supporting any price break.

Use the stochastic and RSI as a good two to look at first. These are visual indicators, easy to use and on every major forex chart service.

What about Stops?

Simple right under the breakout point.

The key to making money though is how you trail your stop.

If it's a big break don't trail to soon wait until the trend is underway and trail outside of daily volatility.

Breakout trading may be simple but it works and most people don't like doing it, don't let that put you off the majority don't win and it works!

All the best currency trading systems are simple and it's a fact simple systems work best, as they are more robust in the face of brutal market movements. If you base your FX Strategy on trading breakouts, you can soon be enjoying currency trading success and targeting triple digit annual gains.

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