So what is is Forex trading you may ask? Forex is the exchange you can buy and sell currencies. For example, you might buy British pounds (by exchanging them to the dollars you had), then, after pounds / dollar ratio goes up, you sell pounds and buy dollars again. At the end of this operation you are going to have more dollars, then you had at the beginning.

The Forex market has much higher liquidity, then the stock market, as much more money is being exchanged. Forex is spread between banks all over the planet and as a result it means 24 hour trading.

Unlike stocks, Forex trades are performed with high leverage, usually it is 100. It means that by investing $1000 you can control $100,000, and increase potential profits accordingly. Some brokers provide also so called mini-Forex, where the size of minimum deposit equals $100. It makes possible for individuals to enter this market easily.

The name convention. In Forex, the name of a “symbol” is composed of two parts – one for first currency, and another for the second currency. For example, the symbol usdjpy stands for US dollars (usd) to Japanese yen (jpy).

As with stocks, you can apply tools of the technical analysis to Forex charts. Trader’s indexes can be optimized for Forex “symbols”, allowing you to find winning strategy.

Example Forex transaction

Assume you have a trading account of $25,000 and you are trading with a 1% margin requirement. The current quote for EUR/USD is 1.3225/28 and you place a market order to buy 1 lot of 100,000 Euros at 1.3228, expecting the euro to rise against the dollar. At the same time you place a stop-loss order at 1.3178 representing a maximum loss of 2% of your account equity if the trade goes against you, 50 pips below your order price, and a limit order at 1.3378, 150 pips above your order price. For this trade, you are risking 50 pips to gain 150 pips, giving you a risk/reward ratio of 1 part risk to 3 parts reward. This means that you only need to be right one third of the time to remain profitable.

The notional value of this trade is $132,280 (100,000 * 1.3228). Your required margin deposit is 1% of the total, which is equal to $1322.80 ($132,280 * 0.01).

As you expected, the Euro strengthens against the dollar and your limit order is reached at 1.3378. The position is closed. Your total profit for this trade is $1500, each pip being worth $10.

Being in the forex game, I wanted to get an edge and masterfully own every single pip I could possibly get my hand on. Being also that the learning curve was quite opulent and sometimes wasn’t really in my favor, I needed an alternative to the hours of technical analysis and research on news and historical data.

I was pressed to find a solution that would let me be able to make trades without the aggravation of the fore mentioned. I looked into using EMA crosses, and news trading, and a couple of other crazy things, only to lose more money and turn more hairs to grey over it.

One day I found the Expert Advisor. What an Expert Advisor is, is an automated trading system, ported to Metatrader 4’s Trading Platform. The dealbreaker here, is that you need an account with a forex broker, which supports Metatrader 4. There are at least a few dozen forex brokers who use Metatrader, and a couple of them should fit your trading requirements like a glove.

Why should you consider looking into an expert advisor? Easy!

1. They trade while you sleep, and never need rest at all. It is a software module that works with Metatrader 4, and never crashes!

2. They never need a salary, bathroom breaks, sleep, food, benefits, or anything else that a human trader would need.

3. They are very easy to download, install into Metatrader 4, turn on, and throw them to the wolves to start making money! This process from purchase to operation takes not even 10 minutes.

4. 60 Day Money Back Guarantee. Most Expert Advisors have satisfaction guarantees, just in case you are not satisfied with the results that the Expert Advisor provides, or just have a problem with the system.

5. Have a life, be with family or friends. Make the real money and not work a 9-5! You think it is easier said than done, but seriously, the reality is, when you can make a sustainable, survivable income from Forex, you would fire your boss!

6. One I could recommend off of the bat, is Forex Funnel. This Forex Automated Trading System has generated a great work at home income, and has documented proof as well! A system that has made $600,000 in four years time, and $150,000 in one years time.

You owe it to yourself! Try the Forex Funnel Today!!!

Why is it that very few traders succeed in the Forex trading environment while the grand majority of traders fail to achieve success? Although there is no hard answer to this question, there are a few things that will put you one step ahead and will definitely put the odds in your favor.

The main purpose of this article is to guide you through some important aspects of Forex trading.  But in a different way, instead of telling you what to do or the best way to do it, it will tell you what to avoid. Sometimes it is better to identify the main drawbacks on a discipline and then isolate them so we have the best results at a certain level of development.

The search for the Holy Grail
Many traders spend years and years trying to find the Holy Grail of trading. That magic indicator or set of indicators, only known by a few traders, that will make them rich in a short period of time.
Fact: Well, there is no magic indicator, nor a set of indicators that will make anyone rich in a short period of time. The main reason of this is because market changes, every single moment is unique. Every Forex trading system will fail from time to time. Our work here is to find a Forex trading system that fits our personality as traders, otherwise the trader will find it hard to follow it.

Looking for Easy Money
Unfortunately most traders are attracted to the Forex market for this reason. Mainly because of the publicity showing or rather trying to show how easy is to trade and make money in the Forex market.
Fact: Yes, it is very easy to trade, anyone can do it. It is as hard as one click. But the second part of it isn’t that easy. Making money or achieving consistent profitable results is hard. It requires lots of education, patience, discipline, commitment, and this list could go to infinite. In a few words, it is possible to have consistent profitable results, but definitely it is not easy.

Looking for Excitement
Some other traders are attracted to the Forex market or any other financial market because they think it is exciting to be a trader.
Fact: Yes, it is very exciting to trade the Forex market. But if this is the main reason you are still trading the Forex market, sooner or later you will discover the most expensive adventure you have ever known. Do some thinking on it.

Not Using Money Management.
Most traders forget about this important aspect of trading. They think they shouldn’t be using money management until they achieve consistent profitable results. They totally forget about the risk side of trading.
Fact: Money management allows your profits to increase geometrically, but also limits your risk on every single trade. Money management tells you how much to risk on each trade. Using money management is a must if you want to achieve your trading goals. By using money management you make sure you are going to be able to trade tomorrow, the next week, month and the following years.

Not Being Psychology Tuned
This is one of the most underestimated subjects when it comes to trading. One of the main principles of financial markets is that the price of each instrument is based on the perception of each individual participant “the crowd.” In other words the price of each instrument is determined by the fear, greed, ego and hope of all traders.
Fact: Being aware of all psychological issues that affect the decisions made by traders will definitely put the odds in your favor.

Lack of Education
Education is the base of knowledge on every discipline. As lawyers and doctors require several years of college until they get their degree, Forex traders also require long years of study. It is better to have someone experienced to guide you through your trading, since some information could take you in the wrong path.
Fact: The market teaches us invaluable lessons on every single trade made. The process of education for a Forex trader could take for ever. That’s right, we never stop learning. We should be humble about the markets and our knowledge; otherwise the market will prove us wrong.

These are some of the most important barriers every trader faces when trying to trade successfully.

Trading successfully the Forex markets is no easy task, it requires a lot of hard work to do it right, but with the right education, you will put yourself closer to your trading goals.

Knowing when to enter the market is crucial to exercising a good technical trading strategy.  There are many pitfalls that inexperienced traders experience because they are entering the market when the probability for making a successful trade is reduced.  So when is the best time to look for a trade and why?

The best time to look for a trade is when there is heavy volume in the currency markets.  Since the Forex market is open 24 hours per day, it’s best to find the times when multiple countries markets are trading at the same time.  Every Forex market in the world operates from 8 a.m. to 4 p.m. in their respective time zones.  In order to take advantage of the chance of many trades developing, one needs to look at when the Forex market times in different countries overlap.  In the overlapping times when multiple markets are open, generally there is the most volume and pip movement.

For instance, it is best to trade the EUR/USD, USD/CHF, or GBP/USD between 8am EST and 12pm EST because the US market is just opening at 8am EST while the European market is finishing up for the day. Another good time to trade is in the middle of the night from 1am EST to 3am EST as many trades develop as the Asian markets are closing and the European markets are opening.  The Australian and Asian Markets overlap between 7pm and 10pm EST as well which offer good opportunities.  Generally speaking, one can just shut off their computer and not bother looking for trades from 4pm-6pm EST as the US markets close and there are no overlapping markets in those times, so although there may be profitable trades one could enter, the volume is much lower and it is far less likely great trades will develop.   The Canadian market does not play a big role in affecting the markets so just trade along with the US market times when the European, Asian, or Australian markets are open.

Many currency pairs tend to trend in the same direction (parallel) or opposite directions (inversely).  Traders can use this information to plan to trade more than one pair knowing that they have a high probability of moving in the same or inverse direction.

The general rule is that these pairs listed below tend to trend in parallel relationships.  The Euro and Cable tend to move together the most.

EUR/USD and GBP/USD
USD/CHF and USD/JPY
AUD/USD and NZQ/USD

And, these pairs below tend to move inversely the most.  The Euro and the Swissy tend to move inversely the most.

EUR/USD and USD/CHF
GBP/USD and USD/JPY
AUD/USD and USD/CAD

Lastly, remember that when trading, Bulls and Bears make money, but pigs get slaughtered.  Don’t be too greedy.  Trade with proper equity management and never risk more than 2% of your trading account on a single trade.  Look for 10%-30% pip gains and move on to the next trades.  Building small consistent profits will add up to large long-term gains.  Trade during times when markets overlap, and use information on parallel and inverse relationships to determine whether or not to enter on trades on multiple currency pairs at the same time.

Wishing You Success!
David Molina

Technical Analysis is the easiest and most precise way of trading the FOREX market known by the forex traders community. All available information on any particular currency, and its impact on traders, and the market, are already reflected in a currency’s price. The foreign exchange market is mostly composed of trends and is, therefore, a place where technical analysis can be used very effectively. Experience in trading has shown that history repeats itself – over time, certain chart patterns become consistent, predictable and very reliable. The problem is being able of  spoting them. There’s always more than meets the eye at first glance.

Prices move in trends; and the traders who don’t know this fact obviously have no need to implement a trading methodology on technical analysis, they haven’t even realized yet. But, over 100 years of research has shown that those who trade “with the trend”, more often than not, greatly improve their chances of winning in the forex markets (i.e., making a profitable trade).

Many times finding the prevailing trend will help you become aware of the overall market direction and offer you better visibility–especially when shorter-term movements tend to clutter the picture. And many times following the trend will bail you out of an initially less than great entry point.

The main question you may be asking yourself by now  is; how does technical analysis help you to determine what the trend of the market is and how does it help your efforts to trade with the trend and not against the trend?

It is important to mention that no one is claiming technical analysis as the “magic bullet” of trading . And if you ask, which indicators are better in Forex trading? The answer is none – technical indicators should simply be  components of your overall customized / personalized trading system and not systems in and of themselves. They are like tools in a tool kit, not the kit itself!)/

As a Forex Technical Trader, your goals are:

#1) To figure out the price action of the currency pair. Price is the main concern. If the EUR/USD is at 1.3226 and goes to 1.3219, 1.3112, 1.3008 – the market is in a down trend. Despite what every technical indicator might predict, if the trend is down, stay with the trend. Indicators showing where price will go next or what it should be doing are useless. A trader need only be concerned with what the market is doing, not what the market might do. The price tells you what the market is doing.

#2) To always remember that technical indicators are only giving you confirmations based on what the market is telling you. So listen and pay close attention to the market and let it dictate which method you will use and which tool you will pull out of your bag of strategies and techniques. For only by listening to the markets will you ever be able to conquer it successfully and become a profitable trader.