Thinking of Forex Investing? Read this!

By Thomas H. Rivera

The forex market has emerged as one of the biggest opportunities for savvy investors in the world. Many people have turned to the market as an alternative to the stock market. While it obviously has some clout behind it, how can you know if it's right for you? What is in it for you and how can you profit from it?

In a nutshell, forex trading is about taking a pair of currencies and their exchange rate; and playing off how that exchange rate varies on a day by day (or month to month) basis. You're not betting on the performance of a company, you're betting on the fiscal reputations of countries. There's less research involved, and you have the advantage that it's very difficult for currency values to plummet as rapidly as stocks can and do (and have, recently).

Forex offers a lot of opportunities, largely because forex trading happens worldwide, nearly 24 hours a day, from Monday morning in London to Friday night in Hong Kong. It's a constant bustle, and lots of chances to make your play on a currency swing, and you can trade as often as you like. The flip side is that it's easy to become afraid to leave your desk for fear of missing a trade. There are plenty of trading plans, ranging from day trader volatility plays to longer term position plays.

The ability to use leverage means there's a lot of opportunity to make money off of even tiny swings in currency prices. This can pay off handsomely on well executed manual trades, and a lot of the more common types can even be automated.

If manual trading isn't your thing, you can even set up several expert advisors to make your trades for you. In this way, you can make steady gains with your account over a long period of time. This strategy doesn't even require you to know much about the forex market. You can just set them up and forget them.

Forex is a good way to pull in a decent income working from home. It's not the road to automatic easy riches, it's an investment. Like other investments you have to pay attention to it to avoid disasters, and the risk of disasters in forex is as large as the potential gains, especially with leveraged brokerage accounts. Still, it's a good way to make a lot of money working from home with nobody breathing on your neck.

Day trading on forex trades your time for watching numbers on a screen and plotting graphs. It pays handsomely if you're patient and follow the basics. And yes, it's possible to make more than doctors and lawyers who went to college for eight years. It's also possible to have an overleveraged put call wipe out two months of earnings in 15 seconds. We recommend focusing on conservative, safe strategies until you get a solid understanding of what's going on.

The forex market is for you if you enjoy taking a risk and making a big profit. It's like a roller coaster of excitement. You will experience some losses, but the trick is to learn from them and not make the same mistake again. - 31876

About the Author:

Want to check out an automated forex trading system? It takes minutes to set up and doubles your money fast. See this forex trading software right now and get big money!

Pattern Trading Explained

By Ahmad Hassam

There are basically two types of chart patterns. One are the chart patterns that generally represent price consolidation and include patterns like triangles, flags, pennants, wedges, rectangles and the head and shoulder pattern among others. Pattern trading may be considered one form of breakout trading.

These chart patterns are mostly a signal for a breakout or a continuation of the existing trend. For the most part these chart patterns are traded when a breakout of one or another kind occurs. There is a famous head and shoulder shampoo also in the market. You might be using one. Dont confuse the head and shoulder with the name of a shampoo. It is a chart pattern that you must be familiar with if you want to continue reading this article otherwise first make yourself clear about these chart patterns and then continue reading this article.

The second type of chart patterns that are the Japanese Candlestick patterns! Candlestick patterns are not tied as closely with breakout trading. Now when we talk of pattern breakouts it should be clear which chart patterns constitute a continuation pattern and which chart patterns are considered reversal patterns.

What chart patterns constitute a trend reversal? The most common chart patterns found on the currency charts that are generally considered to be reversal formations include double tops/bottoms, triple tops/bottoms and head and shoulder tops and bottoms.

A continuation pattern means that the trend is going strong and the chances of its reversal are small. When a continuation pattern approaches breakout on the side of the pattern that would denote a continuation, technical traders patiently wait for a breakout. The most common chart patterns that are generally considered to be continuation patterns include flags, pennants, triangles, wedges, rectangles and others.

Pattern trading is like playing with shapes and is very similar to the general support/resistance breakout trading in terms of entries and exits. One benefit of pattern trading lies in the precise profit targets. This type of trade is treated as a breakout trade with similar type of entry and stop loss placement as with standard support/resistance breakout trades.

Profit target in the head and shoulder pattern is derived by measuring the height from the top of the head to the neckline then projecting that height from the neckline breakdown for the profit target. The traditional signal for the trade in the head and shoulder pattern is after that price breaks the neckline. So a good example of a precise profit target is that of the head and shoulder pattern.

Similarly the height of the rectangle is projected up or down to derive the profit target after the breakout in case of the rectangle consolidation pattern. Triangles, flags, pennants and other chart patterns also have convenient build in profit targets.

Candlestick patterns are most often used as important trade confirmation tools in conjunction with other technical indicators. Candlestick patterns in themselves are not usually considered as sufficient trading signals.

There are a number of candlestick patterns both simple and complex that can be used. For example, it should not be taken as a reversal signal to buy low if the hammer candlestick pattern occurs after a steep well defined down trend. However, if this hammer candlestick pattern occurs right at a well established support level, the hammer candle may be taken as a strong signal that a potential long trade may be profitable. - 31876

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. Try This 1500 Pips A Day Forex Signal Service from heaven! Learn These Candlestick Patterns!

Explore The Secrets Of Forex Currency Trading

By Rudolf Brits

In the world of forexnothing is so out of place. It appears that even androids have found their way into the technology. With new programs being developed each day should you be considering finding a robot counterpart? A program capable of sieving threw loads of data each day? If it came down to it who would you take advice from, a robot or a human?

Personally I am a large follower in the androids. You'd be stunned at how smart androids are. The reason for this I feel is reasonably simple because robots don't count emotions they count numbers. They put the odds in your favor without a doubt.

The currency exchange is just one huge game, it's you one guy trying to get by a market of millions. It's hard work and I have met few folk who can claim to have made their living threw forex.

This of course is changing, each day more and more folks are ditching the standard approach of reading books and taking courses and taking a new way out. They're buying up to 10 screens and connecting them to programs. Programs which are designed to use market flaws and can notice them much quicker than their human opposite number.

The thing is that folk just can't sieve through data quick enough, androids see numbers where we see words. They see values where we see meanings. It's not surprising that folk can't beat robots in chess. A robot makes no mistakes just because he is as good as his programmer.

This is the reason why I think the top-notch programs are actually quite the steal. It's almost as if folk are selling personal 'get rich' schemes. Take your probabilities and purchase a program or do your research and buy something attempted and proven.

No matter how I look at it a forex robot just beats a human. Sure he'd lose you some money but with the odds in your favor do you actually believe your robot won't pay himself off? He is's a machine made for making you money, and I bet it's going to be the most successful investment you'll ever make. currency exchange robots can make it easy for you, they can make it as simple as comparing some numbers and seeing where you need to earn money today. They will relay all of the info that is relevant to you and do it with such precision and accuracy that you will be completely amazed.

Don't involve emotions in business, let a forex robot do the thinking for you and let the money start pouring in. Quite frankly I believe you'd be nuts, positively nuts not to speculate in one of these. It's what we call a marvel of modern technology or at least that is how history will remember them.

So there is no debate and there never will be. Androids are the future, androids are faster, smarter and more efficient then we may ever be. Get a robot and start watching the money pile up. - 31876

About the Author:

Johan Brits finally became successful at trading forex after he learned the secret of the trade. Follow him on Be Share Wise were he explores some of his secrets.

The Labyrinth - Forex Software

By Tom K Kearns

Some of the many forms in which Forex software is now available include interactive web-based programs, downloads, and CD's. The feeling that you are in a mysterious Labyrinth with fairies, ogres, and talking doors is understandable with the abundance of software options available. You are required to make the right turn that leads you to your desired mark by pulling together all the information, guts, and intuition you have.

You are left to navigate through the maze of Forex software. By creating an exact sense of it all you will be brought to the experience you have never encountered before. People never know they are in a maze for some reason and you must come to a full understanding of why you are there in order to access the exit point. Forex software works the same, to be an expert at it takes is the right tools and gumption but there are millions of choices promising you the gold. Some traders move into other software after having stayed with the original first purchased software until they are able to know how to use every button to its fullest.

Types of Forex Software

There is a computer based program called Forex Trading Software which declares they use levels of algorithms to calculate or trigger the buying and selling of currency trading orders. It was designed, when trading currencies, to reduce psychological barriers but note that when it comes to the software impeding fault within currency trading there is no proof.

The all knowing, everyone needs software is the Trading Platform Software. A wealth of knowledge is bestowed, including basic tools and information. Unfortunately guidance is not offered. This will suit advanced traders just fine but may not be suitable for beginners.

Signal Software-a piece not recommended for beginners, signal software allows you to witness spread changes and then make your decisions based on those discrepancies. It involves more involvement from the Forex investor, and requires a certain degree of expertise.

The experienced Forex investor was in mind during the making of Charting Applications Software. For predictions and analyses, charting applications are valuable. Automated transactions and data stream set alerts on the buy and trade are things this can be set up for.

Getting you through the Forex labyrinth

DO NOT believe everything you read! There are no guarantees to the promises made by the Goblin King, or in this case Forex software websites and advertisements. For you they are apt to come with an underlying problem. Keep your eyes open because it is all to make a sale.

2) Become the analysts and do research, this is important. Get on the forums, seek counsel and information. Researching can save you so as tedious as it may seem, ask tons of questions and scope every area.

3) Know your options. Discover prices and duties of the software, which will aid you if you are a beginner or pro. Demo it, test it out and see for yourself.

Just know that in the end you will have exactly what you need, no matter how much leg work is required to get you out of the Forex software labyrinth. - 31876

About the Author:

To learn more about Automated Forex Trading Systems or to choose a signal provider at Zulutrade visit http://www.automatedforextradingsystems.com .

Forex Basics and Opportunity

By Frank Rivera

The foreign currency exchange market is easily the largest marketplace anywhere in the world. Larger than any stock market, the volume of currency that is exchanged on the forex market each day exceeds a trillion dollars. Once the domain of banks, governments, large corporations or the super-rich, it's now becoming more popular with smaller investors too.

Trading on the forex market is simply the act of exchanging the currency from one country for the currency of another. When the values of those currencies alter, you trade back for your original currency again, hopefully with a profit in your hand at the end of the trade.

For example, if you're beginning with the US Dollar (USD) and trading it for the British Pound (GBP), then you hope that the value of the USD goes up or appreciates in value. When the price does go up, you trade your GBP back for your original USD and you receive the higher amount back again.

The difference between what you bought and sold it for is profit and it is kept track of in a unit of measurement called pips. Pips are the basic unit in trading currencies. Your goal as a forex trader is to gain as many pips as you can.

There are a lot of different strategies available to trade forex including scalping, swing trading, and trending. Scalping is one of the most popular methods of trading and it utilizes a lot of quick, small transactions. You decide to buy a certain currency and then you sell it a few moments later. In this manner, you can gain a lot of small profits and hopefully minimize any risk to your account.

With so much growth in the forex market, there are obviously a lot of different people involved. You will find that there are a lot of products and services that you can purchase to help your forex trading. Everything from coaching programs to robots that trade for you will be pitched and promoted. If you're new to the market, it is probably a good idea to get some kind of guidance. Without it, you will probably lose a lot of money fairly quickly. However, you want to make sure that you investigate any product thouroughly before you buy it.

The sheer amount of forex products on the market does mean you will find some that aren't as reputable as some others. This is the primary reason for spending as much time as you can checking the validity of the claims you read and then actually speak to or email people who have used the products. Reviews can be helpful, but aim at forums where forex traders hang out and ask questions.

In addition to that, you should also do your homework on whichever broker you decide to go with. There have been a few brokers that turned out to be scams, so you'll want to make sure that they are regulated and that you feel comfortable with them. If you live in the United States, you'll probably want to find a broker that is in the United States and regulated by the NFA.

While the forex market can be incredibly lucrative, it can also be equally volatile. Take a bit of time to learn how the market place works before you begin trading. - 31876

About the Author:

Wanna try an currency trading software? They are incredibly effective . See this automated forex strategy here now and make lotsw of cash

A Look Into Win Percentage - Choosing A Forex Signal Provider

By Tom K Kearns

Are the better traders closer to 100% winning trades, or is that just the way it seems? In contrast, the closer the traders are to 0%; it would seem that they are worse. There is more to trading than winning the most possible trades, even though that seems peculiar. This article will hopefully help fill you in on why I would argue that a 95% win rate is infinitely worse than a 65% win rate.

First we'll take a look at traders with a low win rate. We will classify 0% to ~40% as low. If a trader fits into this range, then the closer they are to zero probably means the worse they are. Most traders in this lower range are losing traders. You will occasionally find a trader who attempts to catch very large moves with very tight stops. This type of trader may have an extremely low win % and still be a very successful trader.

Next, let us look at the 40% - 70% range. Most of your winning traders will fall somewhere in here. They win not because the majority of their trades are winners with few losers. It is quite possible that have more losing trades than winning ones. Their success comes from their ability to correctly manage their trades once opened. They take advantage of stops that will then be executed more often than not. This looks for all the world like a losing trade, and it is, but a small loser. The traders that can manage their trades effectively most often are the ones that are able to cut their losses and allow their winners to take off. There are very few traders out there who have the discipline to take advantage of this simple concept.

The last group are those with a very high win % (over 70%). It seems the closer to 100% these traders get, the more people want to trade their signals. Unfortunately the opposite is probably the correct play. These traders win an incredibly high amount of the time because they often take profit off of the table as soon as it appears. This strategy is fine if you also plan to cut losses in that manner. But traders with 95% win rates and above do not have this strategy in mind. Rather than accepting a small loss and moving on with their day, they will let a loser run indefinitely and even add to that position in many cases. This eventually wipes out months or more of winning trades all at once and in the end has no chance of success. One 500 pip loser wipes out 500 one pip winners. Keep in mind that this trader would have well over 99% winning trades and still be an over all loser.

Do not think for one minute that the reason for this article is to convince you that no trader outside the specified ranges is automatically a losing trader. I'm quite sure that there are traders that are successful with a win percent falling outside of the above ranges. The point of this article is to lead you to thoroughly investigate the trader with the 95% win rate as he could implode upon himself (and you) at any minute. - 31876

About the Author:

To learn more about Managed Forex Accounts visit Automated Forex Trading Systems.

Option Trading - Developing An Option Trading System

By Micheal Thomas

If you plan to engage in option trading then you will need to understand the two types of option trading systems currently being used in the market today. They include discretionary and mechanical. A trader or investor using the discretionary method does not use a particular technique, process or method but instead makes trading decisions based on his current knowledge or speculation on the market for that day. The mechanical options trading require traders to understand and select stocks, determine entry and exit strategies, and transform these methods into objective processes, usually by way of a computer application. The advantage of the later process is the elimination of human judgment and possible error based on speculation rather than actual trends and analysis.

Year ago I migrated from discretionary to mechanical option trading in order to gain more consistency with successful option trading. I developed a mechanical option trading system called the Star Trading System (http://www.mastersoequity.com). You can develop your own mechanical trading system utilizing the following guidelines:

1. Stock Selection

Begin developing a list which includes criteria which must be true for a stock to quality as a viable option trading opportunity. Quantify and research the criteria you are using to develop your strategy. Use a computer application that will allow you to record the criteria you have established and then compare the stocks you have selected against your dependencies. You can cross verify your finding with stock information from the internet to formulate your final stock selections.

2. Option Selection Procedure

After performing your stock selection analysis you can more confidently begin selection of a stock that meets your established criteria. Additionally you can create your option trading system using OTM options or ITM options as well as basing it on current market conditions. Market conditions can be bullish or bearish at the time you are making your selections so you could include this factor into your overall analysis.

3. Entry Procedure

Once you make your conclusions as to which stock to watch and which option to buy, you will need to decide what conditions will invoke a purchase. This decision could be simply to purchase at market opening or be more complex and require watching the underlying stock movement for a pre-determined timeframe making that purchase. Use your option trading system to help navigate these decisions.

4. Exit Procedure

When you have open position you will need to determine when to take a profit or when to stop a loss. The two exit strategies include Stop Loss and Profit Taking. Stop loss in option trading is based on the percentage loss of the option position or based on the percentage loss on the underlying stock. Profit Taking is based on the target price or the percentage gain on the option position. Once you have established this criteria your broker assist in the automation of this transaction. Many traders proceed to a stop loss or profit taking based on emotions, which is why brokers develop automatic processes to control these actions. If your broker does not support include automatic mechanisms and you tend to make emotional decisions, then you should find a broker that with these offerings.

Your next step is to name your option trading system and use it for 6 months. Do not set your expectations high on getting it perfect the first time. Creating a profitable option trading system take time, knowledge and experience. - 31876

About the Author:

If you want to learn more about option trading, feel free to visit our website.

Forex Option Trading

By Micheal Thomas

Foreign exchange trading or forex option trading involves buying and selling of various currencies from around the world through the foreign exchange market. Currencies prices change on a daily basis and is driven by the global market. These varying rates are based on everything from global news and politics, changing industries and economies, agriculture and varying other global market conditions. All these factors need to be considered and understood when moving forward with this type of trading.

Experienced traders and investors watch for currency prices falling in one market. When there are falling prices with one currency another is usually increasing in value. This is where many traders engaging in forex option trading practices will gain their most profits and expand their portfolios. It can be an area where you can lose money if you do not understand the intricacies of this type of trading.

Foreign exchange options or forex option trading are similar to traditional stock market options. They are essentially financial contracts or instruments where a buyer or owner has the right to exchange one world currency for another world currency from a prearranged agreement. The prearranged agreement consists of an exchange rate, known as a strike price, that will be paid by the owner at a previously agreed upon date or time period. This does not necessarily mean the buyer is obligated to make this exchange but it does allow the trader that choice when the prearranged time period arrives.

Trading on the foreign exchange in this manner provides traders and investors to hold forex options to purchase a currency at a fixed exchange rate but when that date arrives if it does not meet initial expectations of the buyer they are under no obligation to make that purchase. If the conditions are profitable for the trader then they can sell the currency they are holding to the market and reap the benefits and the profits from this form of option trading. The traders and investors do have to pay their brokers up-front for this privilege but it is well worth the extra investment to have this type of option.

The up-front premium in which has to be paid by the options owner to the broker provides traders and investors some security with engaging in forex option trading. The broker retains this premium regardless of whether the trader or investor exercises their right to sell the options contract or instrument. If the contract expires and the foreign exchange rate on the currency is less than the initial strike price agreed upon, the options contract or instrument is then worthless.

Forex option trading is gaining in popularity because of the higher and quicker return rates as opposed to those returns from the traditional stock market. Foreign currency traders and investors develop strategies that will be most profitable in the near term and deal less with the routine market fluctuations which occur on the stock markets around the world. This type of trading is also considered daily transactions in large volumes, which makes it extremely important for novice investors and traders to consult with an experienced brokerage before attempting these types of trades. - 31876

About the Author:

If you want to learn more about option trading, feel free to visit our website.

Currency Options Trading

By Micheal Thomas

A growing trend on the market is currency options trading. This is one of the forex methods within the stock market where traders exchange one foreign currency for another, preferably making the transaction when one currency is trading for a higher amount than the other. This type of forex trading is gaining in popularity as the currencies around the world continue to shift with the overall global economy.

However, currency options trading require a clear understanding around foreign currencies, economic and world trends and the stock market. This type of forex training is not for a novice trader and should be left to experts in the field. If you want to engage in foreign exchange trading then make sure you have a strong mentor or broker who can help you with the details of this type of market trading.

The foreign exchange market is the largest market in the world. Currency options trading and foreign exchange training has gained in popularity in Europe and the United States over the last decade. New strategies, methods and techniques have been developed to assist traders when engaging in the foreign exchange market. These new strategies have been able to increase trader and investor portfolios as their knowledge and experience in this area increase.

Currency options trading had proven to be a viable method for producing financial gains through trading on the foreign market. Over the last few years it has quickly grown to be one of the preferred methods for traders and investors around the world. The technique applied to this type of trading can also be used when people approach conventional market trading options and allows them to better leverage their investments.

There are many types of market trading techniques available to traders and investors in today's market. Most of these methods require experienced traders and brokers to truly understand and take advantage of capital gains and expand their portfolios. Although anyone can perform options trading it would be wise to seek expert advice prior to your getting involved with currency options trading. Learn from the experienced and those who are actually benefiting from this type of forex trading until you feel confident to move forward with your own investment strategies.

Currency options trading are very similar to the way you approach stock options trading on the market. Trading currency options you basically work in a contract situation that provides you with a means to purchase a world currency at a designated exchange rate within a specific time period sometime in the future. The most important aspect is that this contract does not commit you to buy that currency at that time, so you can decide not to purchase the currency if the price you anticipated did not transpire. However this type of arrange does come at a cost whereby you would pay your broker a premium that will allow you to make these types of trading choices if they arise. This type of trading lets you hedge your investments during unpredictable market trends. - 31876

About the Author:

If you want to learn more about option trading, feel free to visit our website.

What Happens On a Trading Floor

By Zeke Lee

Have you ever seen a trading floor?

No, were not talking Liars Poker here

Weve all seen the so-called pit traders on CNBC yelling and screaming at each other. But whats it like on a typical trading floor at a large bank that you might work at?

Usually, youll see one large open room " no cubicles. On the edges of the trading floor youll see meeting rooms and occasionally the offices of the Managing Directors.

On the floor itself, youll see rows of really long desks that are sectioned off per person. Traders within the same group will naturally sit close to each other. So you might see the foreign exchange group in one area, the credit group in another, and the equity guys somewhere else.

But youll notice something unique about each traders desk: the monitors. No, not that they are eco-friendly and conserve energy " but that there are so many monitors on each desk and that some of them are constantly blinking.

Got Screens?

If youve never worked in trading before, you might think theres no reason you would actually need between 3 and 8 monitors " the other 7 must be for playing World of Warcraft or catching up on 24, right?

Wrong.

Partly, its for showing off: some traders view the number of monitors they have as a status symbol on the trading floor. Hey, even if you cant see my BMW, my 8 monitors mean that I own a really expensive car, right? Or at least that our P&L is higher than that of the other group over there with only 2 monitors.

The actual rationale " status symbols aside " is that speed is extremely important in trading, and you dont want to waste time switching between windows. Alt + Tab is for bankers.

You need to be able to look up and know that Apple surged 4% in the last 10 minutes.

Then you need to monitor the market news and major headlines coming in through Bloomberg " is Steve Jobs OK? Is some analyst raising their prediction for the number of iPhones sold? Was there an announcement that just came out regarding Apples contract with AT&T or talks with Verizon? Did consumer spending numbers just come out?

As an active prop trader, youre multi-tasking all the time and constantly thinking about these kinds of questions, assessing risk, and making quick decisions.

Bloomberg

Bloomberg is an expensive news/finance information service that all banks and trading firms have access to.

Beyond just watching the news, you also need to track stocks youre interested in and see their prices updated in real-time " so you use another monitor for that. These screens are constantly blinking as the prices of securities are changing every second.

Bloomberg has a price feature that lets you organize and track stocks by sector (Technology, Financials, Energy, etc.) and lets you see where everything is trading.

You can also get a real-time heat map of the market, so you can see which sub-sectors of the S&P are up, and by how much.

Trading Platform

Next, you use another monitor to actually make your trades " this might be Merrills MLX platform, Goldmans REDIPlus platform, FlexTrade, Fidessa, or anything else.

If youre trading equity derivatives, you need to enter your orders for stocks, puts, and calls quickly and monitor any pending orders that are waiting to be filled.

Why do you need an entire monitor just for making trades?

Because you be managing a HUGE portfolio of securities and each of these securities could have various derivative products attached to them. For example, a list of a hundred stocks could each have derivatives like calls and puts with various maturities and strike prices.

Depending on what youre trading, you might actually need 2 monitors to track everything.

Option Valuations / Other Calculations

If youre not trading derivatives, you wont need to value options " but you may well have to make other calculations, whether youre valuing bonds, analyzing the yield curve, or back-testing a trading strategy.

While the math itself is not quite rocket science, it goes beyond what most bankers deal with: simple arithmetic. While investment bankers may come from liberal arts, finance, or engineering backgrounds, derivatives traders primarily come from mathematical / engineering backgrounds.

Your firm might have a proprietary way of valuing options, developed by a senior IT programmer (see, the back office may have some merits after all) " and depending on what youre trading, it might be very complex.

Getting these programs working properly can be difficult because they need to be synced up with other programs you use. Getting the # of shares and contracts held, exposure to risk, and other variables linked together dynamically rarely works perfectly " and this complexity means youll be calling the back-office tech guy or floor IT guy to fix technical issues quite frequently.

Messages

Of course, youll also need a monitor for Outlook " the standard email program at any bank " to handle email and see incoming messages from brokers and the rest of your team.

The Rest of Your Desk

So what else is on your desk?

Just like at a bank, you get a phone terminal along with a headset and regular phone " but be careful about the conversations you have, because anything between brokers and clients is recorded.

Talking about bottles may not get you fired " but you probably want to postpone talking with your model(s) until later. Even if its not recorded, everyone else on the desk will hear what youre saying.

The phones are also connected to CNBC audio, so you can listen to whats going on in the news throughout the day.

So What Else Do You Do On the Phone Besides Chatting with Models?

For one, the phone actually rings quite often " especially between the trading hours of 9:30 AM and 4:00 PM.

Most of the time, brokers call to tell you what their clients are looking to buy and sell and see if you have any interest. Some of this is shifting to online chat instead, but its still common for brokers to call to get your attention on larger orders.

Junior traders will have often help deal with the influx of phone calls by screening the phone calls and taking down broker quotes.

Forget About the Bathroom " or Trips to Starbucks

This also brings up another key point and a major difference between banking and trading: most traders hate leaving their desks for fear of missing out on something important.

Lunch breaks are limited to 15 minutes (and often the junior guys or interns will go get the food for them). Bathroom breaks are rare unless you really need to go. Forget about 10 trips to Starbucks during the day: bankers can do that only because they have so much down time. No friendly chats with the cute marketing intern " at least not until the market is closed. This also means that its common for traders to gain weight: they pretty much just sit there all day, eyes glued to the monitors, only taking the occasional break to eat.

If you walk up and try to talk to a trader, half the time he wont even look at you: this might seem rude to you, but to him not paying attention for even a few seconds might result in a loss of thousands or tens of thousands of dollars.

And part of it is just habit: theyre so used to having their eyes glued on the screen that its almost weird to look away from it.

Hey, if you had that much money on the line constantly, you probably wouldnt give the time of day to bright-eyed interns or newbie traders either - 31876

About the Author:

This article was contributed by Zeke Lee, a Stanford graduate, former management consultant with Booz & Company, and current derivatives trader on Wall Street. He founded the GMAT Pill (GMAT Prep course) based on his experience scoring in the 98th %ile on the GMAT in just 2 weeks with a special study method.

Forex Trading Software Means Faster Execution And Increased Trade Volumes

By Todd Joyner

The concept of automated Forex trading system is mind-boggling. The exchange-traded futures market was the first to switch on automation. Then, the traders on the Interbank spot Forex market decided to catch up with the latest trend and moved to to the new automatated system.

Automated Forex trading system enables traders to execute their trade on spot Forex market automatically and anytime of the day, based on existing technical indicators and custom trading rules. There are various features included in the automated trading system, such as: Account equity management; Stop and/or limit orders; Discretionary market orders; and Various technical analysis indicators within your discretion for enabling trend-following systems.

Automated Forex trading systems supports most of the following indicators (the technical support will depend on the technology used as well as the available features of the system):

Weighted moving average, exponential moving average, simple moving average, variable moving average, triangular moving average, time series moving average, wilder average true range, vertical horizontal filter, Standard deviation, Trailing stops, Mass index, Fixed limits and stops, and others.

The success of the automation process to the Forex market is attributed to several factors, such as the following:

1)The ability to perform or execute trades in real time. Because of the automation, a trader can close trades within a few milliseconds. It is impossible in manual systems, as previous trades are normally closed after several hours. In addition, there are also instances wherein a trader incurs several losses in a row that prevents him from making any fresh transactions. Thus, with automated Forex trading system, this problem could be avoided.

2)The ability to greater diversification. With automated trading system now in place, a trader can trade in various local as well as international markets within varying time zones. In other words, you can place trade or close deals with different traders from various markets around the world even at the middle of the night.

3)Its ability to analyze short-term data. This feature is not available in manual trading system. Thus, traders using automated system have the bigger advantage since they can predict market trends in less than an hour.

4)If you will consolidate the features as well as the benefits of automated Forex trading system, it will give you a solid conclusion: with the Forex market on automation, you will be able to place more trades on a single day, thus increasing the average volume trades daily.

5)Let us take the following scenario: If you are trading using the manual system, you will notice that it takes time before a trader confirms if he will accept your deal or not. He will look on the market condition first as well as the exchange rate of the currencies that you are trading with. Thus, if it takes time before a transaction will be finalized; there would be fewer trade volumes.

6)Now, if you are using the automated Forex trading system, the evaluation of exchange rates and market conditions could be done within a few minutes, since Forex data are now updated in real time. Probably after less than an hour, you will be able to take your position whether you will push through the deal or not. If a Forex transaction per trader is averaging within an hour, a single trader can place as much as 8 trades within the regular trading hours and additional trades beyond the regular trading hours. There are thousands of traders in just a single market who can place such average number of trade per day. Combining it with the number of Forex markets around the world, the figure is just huge enough.

7)In addition, the technology is changing continuously, thus there is a tendency that the average number of trades per day will increase, thus a possibility of increased trade volumes on daily basis. With faster trade execution, that is a certain possibility.

The Forex trading market is now at the forefront of automation. Forex transactions are now faster, and earning money through Forex trading has never been easier. - 31876

About the Author:

Looking to find the best deal on Forex Automatic System Software, then visit the best Forex Trading website for all your Forex trading needs.

Forex Trading Software: Is There Value In The Automated System For Forex Traders

By Todd Joyner

Do you have to use a automated system with the Forex trading system?

Before we answer this important question, let us talk about how big the Forex trading market is. From there, we will discuss the value of automated systems for the Forex trading market.

It is true that the Forex market is the largest market around the world not just in terms of average daily turnover and average revenue per trader. It is also the largest market in terms actual participants. Below is a list of them.

BANKS- they are not just for saving money and lending capital to entrepreneurs, but they are one of the major players in Forex market. Banks cater both to large quantity of speculative trading and daily commercial turnover. Well-established banks can trade billions of dollars worth of foreign currencies everyday. Some of the trades are undertaken on behalf of their clients, but most are through proprietary desks.

COMMERCIAL COMPANIES- these commercial companies trade small quantities of foreign currencies compared to larger banks and their trades produce small and short-term impact on the market rates. However, the trade flows from transactions made by commercial companies are essential factors with regards to the long-term direction of the exchange rate of a certain currency.

CENTRAL BANKS- central banks play an important function in the Forex market. They have the control over the supply of different currency, inflation, and interest rate. In addition, they have also official target rates for the currencies that they are handling. They are responsible for stabilizing the Forex market through the use of foreign exchange reserves. Their intervention in the market is enough to stabilize a certain currency.

INVESTMENT MANAGEMENT FIRMS- these firms commonly manage huge accounts on behalf of their clients such as endowments and pension funds. They are using the Forex market to facilitate transactions, specifically in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

RETAIL FX BROKERS- they handle a fraction of the total volume of Forex market. A single retail Forex broker estimates retail volume of between 25 to 50 billion dollars each day, which is estimated to be at 2% of the total market volume.

SPECULATORS- these are individuals who purchase and sell foreign currencies and profit through fluctuations on its price as opposed to popular methods such as interest and dividends. They perform the important role of transferring the risk to individuals who do not wish to bear it.

In Forex market alone, there are already six major players partaking on the $1.8 trillion worth of daily turnover. With a large number of Forex players, there is really a need in switching from manual to automated Forex trading system.

Among the aforementioned major Forex players, the automated trading system is of great advantage to the speculators. Since they focus on the price fluctuations of various foreign currencies in order to profit, the real time data analysis will help them determine trades that will give advantage to them.

There are several automated Forex trading systems available in the market. There are also automated Forex systems that are offered for free or as part of their trading account acquired from their Forex brokers or agents. Such complimentary system packages are typically elementary trading system. Thus, if you are looking for more features, you can avail of it through additional payments.

There are two kinds of automated Forex trading systema. These are as follows:

Desktop system- all Forex-related data are stored on your desktop's hard drive. This system is unpopular to Forex traders because all data are susceptible to computer virus contamination and other security problems. Worse, when the computer malfunctions, all essential information might be lost and cannot be retrieved (unless you have some back-up files of your own). However, it is little expensive compared to the other types of automated trading system.

Web-based system- the security of your Forex account and other data are provided by your web-based provider. These are hosted on secured servers. It is also convenient in the sense that there will be no software required and it is universally compatible with your Internet browser.

You may also try different automated trading system demos first so that you will be able to determine the automated Forex trading system that suits your personal preference and needs.

Even if you are just a small-time Forex player or just starting out, it will be to your best advantage if you will use an automated Forex trading system for your future Forex trading needs. - 31876

About the Author:

Looking to find the best deal on Forex Automatic System Software, then visit the best Forex Trading website for all your Forex trading needs.

How to Use Option Trading Rolling Strategy

By Micheal Thomas

If you are an experienced trader or investor then you have probably used option trading rolling strategies. To put it simply it is a strategy where you would move your strike point to a new strike point within the same month as your original transaction. The term rolling essentially means moving.

In options trading the movement happens when you move from one strike price or point to another strike price or point. This can be accomplished when you move points vertically or horizontally. Moving points vertically means you will be making this transaction within the same month as your original strike point. Moving points horizontally means you will make a request that this transaction takes place within a different month from your original transaction.

Traders and investors understand that in order for them to maximize their returns they need to use the covered call strategy each month consecutively over a long period of time. This option trading strategy requires the investor or trader to move or roll the strike point when the option expires. The term rolling is derived from this type of trading strategy. On the other hand, traders and investors need to make sure their strategy provides them with a means to stop or avoid rolling when it is not in their best interest to continue.

If a trader or investor decides not to roll the strike point then they are allowing their investment to increase or appreciate. This is not a normal strategy to use with option trading but it can be a transaction utilized if the market conditions warrant this type of option trading. In this case when the option is exercised and the share is turned into capital, it could be called away.

In option trading when an option is expiring, the trader or investor can perform one of two types of transactions. They can execute a short option, which refers to being 'out of the money' or 'in the money'. If the option is 'out of the money' then it is essentially worthless. In this case the trader or investor will sell the next month's call after letting the option expire. If the option is 'in the money' then the trader or investor needs to sell the next month's call after buying the short option back in order to keep the stock. Even thought that type of trade is actually two trades, buying and selling, it is considered one trade. This is also known as a spread. To roll out your covered call or buy-write you need to utilize this type of spread so you can buy back the short option and keep your stock.

To maintain your covered call strategy traders would sell their second month option short. The remaining positions are long stock and short calls that traders and investors then buy back at the beginning of each month with no choice on front month options. There are choices to sell near term or with a farther expiration date for the next month option using this type of option trading strategy. However, rolling options can be complicated and best left to experienced traders and investors to avoid unnecessary investment risks. - 31876

About the Author:

If you want to learn more about option trading, feel free to visit our website.

How To Get An Edge In Stock Option Trading

By Micheal Thomas

Traders need to understand volatility in order to get an advantage when trading options on the stock market. Misunderstanding of this topic by the trader can lead to frustration, confusion and ultimately lost investment. As a trader or investor it is vital to have a clear understanding of the two primary types of volatility in order to be successful at options trading. They include implied volatility and statistical volatility.

Implied volatility is tied to the options price or options pricing model. If traders or investors who are involved in option trading are expecting a future event to drastically change options prices of the underlying security, then they may want the buyer to pay more for the option that they are selling. If this takes place the implied volatility increases. The volatility that is implied in the price of the option changes. However if the option seller is not excited about the future prospects of the option then the option trading prices could reflect very little implied volatility.

Statistical volatility, or historical volatility, relates to option trading in terms of historical performance. It is tied closely to the price of the underlying security. The way traders and investors measure this is to determine how volatile the market reflects its daily pricing fluctuations. The higher the statistics and the more the prices fluctuate, the more volatile the market. Of course the reverse is true if the statistics are lower and the prices are not fluid, then the market is somewhat more predictable with less volatility associated with trading options on the market.

Understanding these scenarios is useful when option trading. Traders and investors compare the statistical and implied volatility in order to determine whether or not the option pricing is overvalued or undervalued. The way to determine whether they are over or under valued is to determine the differences between these two prices. If the implied volatility is higher than the statistical volatility, then the option pricing would be more expensive than if the option pricing model reflected the implied volatility closer to the statistical. It could be as simple as understanding the options pricing and analyzing the daily fluctuations or trends associated with the market and various options.

When a trader or investor begins option trading on the market they need to understand whether they are trading with statistical or implied volatility. If the statistical volatility value is higher than the implied value, it would mean that the option prices are less expensive. This is primarily due to the daily fluctuations of the market, options or underlying securities. If the daily fluctuations are greater than the anticipated future pricing then the options and pricing movements are tied to the underlying security.

Many traders and investors discovery option trading can be rewarding and profitable. Further understanding market volatility and the ramifications of them as applied to trading options on the market can provide greater insight into how and when to invest in various options or option spreads. - 31876

About the Author:

If you want to learn more about option trading, feel free to visit our website.

How Option Trading Profit In Any Market Conditions

By Micheal Thomas

Traders and investors need to formulate strategies which will allow them to be profitable under any type of market condition when option trading. No matter how the market fluctuates, whether the stocks go up or down, experienced traders need to find the right method to sustain success and create revenue growth. Millionaires are made through option trading on a daily basis there are also others who are not as fortunate. So it is vital to understand the nuances associated with market conditions and how to optimize those conditions in your favor.

It is possible to be successful when option trading on the market, whether the stocks are fluctuating up and down, or even staying stationary. The traders and investors with an understanding of the market and the various nuances associated with it are the ones that become successful and make millions. Some of the strategies these successful traders and investors utilize include strategies for when the markets are up and others for when the market is down.

Option trading strategies for when the markets are up include Buy Call Option, Sell Naked Put Option, and Bull Call Spread. Buy Call Option is where you could purchase the same number of equal stocks for a fraction of the price using call options and profit when the stock goes up. If the stock crashes then you will lose the small amount you put towards buying the option versus the entire amount you would have use to buy the stock. Sell Naked Put Option is used instead of buying call options means you can sell short put options by pocketing the entire amount you made on selling the put options if the stock goes up. Bull Call Spread is when you buy call options at the money and sell short out of the money call options within the same month. This strategy means you make money when the stock rises or stays the same.

When the markets go down the best strategies to use for option trading is Buy Put Option, Sell Naked Call Option or Bear Put Spread. The Buy Put Option instead of shorting stocks and risking a margin call you buy a put option. Buying a put option is the same as buying call options but you profit when the stock goes down rather than up. Sell Naked Call Option means instead of buying put options you sell short call options and make the entire amount from selling the put options if the stock goes down. Bear Put Spread is when you buy put options at the money and sell short out of the money put options within the same month. This strategy provides profits when the stock falls or stays the same.

Other strategies that can be used for option trading whether the market goes up or down include Straddle and Strangle. Straddle is when you buy a call option and a put option at the same strike point for the same stock option. This lets you profit no matter what direction the market is moving. Strangle is similar but buys out of the money call option and put option instead of at the money in order to reduce the cost of the position.

When the market is steady or moving sideways then some of the best strategies to use for option trading include Covered Call and Short Straddle. Covered Call works if you have a stock that is moving sideways you could collect rental out of it by selling the call option each month and profit the entire amount of the sale if the stock continues moving sideways. Short Straddle means you would buy call options and put options similar to Straddle but you would sell short to create an option position which profits when the stock continues to move sideways. - 31876

About the Author:

If you want to learn more about option trading, feel free to visit our website.

Buying Stock Versus Stock Option Trading

By Micheal Thomas

Traders and investors are well aware of the difference between buying stocks and purchasing stock options. Purchasing options means you are speculating on the direction of the market in your favor. Option trading is different than simply purchasing shares and requires experience when moving forward with transactions. The terminology and strategies are different and should be approached by the experienced traders versus the novice. Understanding the differences should be the goal of everyone interested in trading options or stocks on the markets.

In options trading there are two types of options called puts and calls. Purchasing a call options give you the right to purchase the stock at the strike point prior to the option expiration. When purchasing a put option you have the right to sell the stock at the strike point any time prior to the expiration date. A call option is purchased when you expect the price of the stock to inflate while a put option is purchased when you expect the price to deflate.

Stock option trading is a profitable opportunity for traders and investors as long as they base their strategy on a particular set of stocks or options, as well as formulate an overall buying and selling strategy. It is extremely important to understand the terminology and the various methods of trading before engaging in trading options on the market. This is not an activity for the novice trader or investor but instead takes experience, practice and understanding in order to become profitable.

It takes time to understand and acquire the skills and experience necessary to become a successful trader or investor dealing with option trading on the market. Understanding the market, stocks, stock options and all the trading techniques are a vital part of option trading. The difference between buying stocks as compared to buying options is that when you purchase a stock you own a piece of the company. Purchasing a stock option is a contract that lets you buy and sell the stock for that company at a certain price designated by the current market prior to that option expiring.

When performing option trading transactions you will either be buying or selling. Whether you are a trader or investor looking to buy an option or sell an option there has to be a purchaser and a buyer to complete an entire transaction. Each buyer and seller for each option will have to call or put in order to adequately complete the trading. This type of trading can be performed by experienced traders and investors whereas novice traders should seek advice.

Traders and investors are very much like gamblers since they are betting that the market will move one way or the other. They base their option trading strategies and make their transactions based on the market position, trending and direction. When option trading the term 'zero-sum game' is commonly used and refers to the option that the buyer gains equals the sellers loss and vice versa no matter whether there is an increase or decrease in market movement. - 31876

About the Author:

If you want to learn more about option trading, feel free to visit our website.

Guidelines To Choosing A Third Party Forex Signal Provider

By Tk Kearns

The popularity and easy accessibility of the ForEx, or foreign exchange market, makes many people choose it as their financial stepping stone. Together with its indisputable popularity come some extras. The extras include computer programs, trading systems, videos, books and most of all, third party signal providers. Now, I will discuss some points when searching for a good third party signal provider.

Before we get into choosing a provider we need to have a good understanding of what a third party signal provider is. A signal provider is a trader or analyst that generates trades that in turn get placed on your account. You can have several signal providers trading your forex account or just one.

Like anything else, all third party signal providers are not created equal. At first glance a trader may look like a home run. That same trader may well end up completely torpedoing your entire account in one afternoon. To help make sure this doesn't happen we'll set down a few guidelines. These guidelines will give us something to look for when choosing our third party signal provider.

1. First, I make sure that the trader is a winner. This is a little bit obvious already but I could always see losers with 50 to 100 people trading their signals.

2. The next thing I look at is how long they have been a winner. If a trader has been winning for a week, this means nothing to me. I recommend that you don't trade any signal provider with less than a few months of results to show you. Any one can place a few good trades one week and get lucky. If you are going to be trading this trader's signals they need to be established.

3. Look at the max draw down. This is the largest peak to trough draw down in equity that the trader has historically had. Some traders refuse to take a loss. This causes them to hold on to losing trades forever or until they turn to a winner. Turning a loser into a winner sounds great, but it will eat up a huge chunk of margin and may never turn around. If it doesn't turn in your direction, you will have your entire account destroyed by a trader that could have taken a 30 pip loss but held on until it was an 800 pip loss.

4. You should be able to spot any traders that meet our first three guidelines. Once you have some traders that you are considering using you should take a closer look at some of their stats.

a. Have a look at some of the trades placed by each trader. Are they all unique trades or are there 20 trades all placed on the same currency pair at the same time? If so its really just one trade placed twenty times.

b. Have a look at how far they let their trades get away from them. Is your signal provider letting trades get 300 pips or more against them at times? Do they close trades the minute they turn into profit? If so this is a trader who does not understand risk and reward and should not be considered to trade real money.

c. Does your trader add to losing positions? Generally someone who is doing this is trying to average down their entry point and is setting themselves up for failure. Make sure when they do fail that your money is not on the line.

5. Choose a signal provider that suits you. Some traders may provide larger returns over time, but take bigger risks leading to bigger draw downs. This might be OK with you. If you are more conservative and cannot stomach large drops in equity you probably should choose a more conservative trader.

These guidelines are only few of the things that you could try when choosing a third party signal provider. Just remember to try this on your demo account before doing it with real money. It's your account and ultimately, you will be held responsible for whatever happens to it. - 31876

About the Author:

To learn more about Automated Forex Trading Systems visit Automated Forex Trading Systems.

Candlestick Guide

By Ahmad Hassam

Download Candlestick Guide (82 pages) free after you finish reading this article. This candlestick guide is a complementary gift for you from Options University and is comprehensive. Candlesticks have become popular in the Western trading community especially the United States in the past decade. However, candlestick charting methods had been developed by Japanese rice traders hundreds of years back.

Internet made possible the availability of online trading to retail trading. The advent of internet has leveled the playing field for traders whether they trade stocks, futures, options, commodities, precious metals or currencies. In the last two decades there have been seismic changes in the way people used to trade. Access to the market is now only one mouse click away. Trade just by clicking your mouse!

The opening of retail trading especially in the currency markets that was previously only open to large players like big banks and corporations has been a revolution. Market information is now in most cases freely available online. Internet has made commission rates dramatically lower. The result is that a whole generation of new traders and investors want to try their luck beating the market. You can now demo trade with virtual money to develop and hone your trading skills.

Did you attend the last Steve Nison Candlestick Charting Technique webinar? Now, you should. Steve is the master of candlesticks and you can learn a lot from attending his candlestick. I am a great fan of candlesticks charting and I have seen many traders both new and professionals becoming die hard fans of candlestick charting. Why? Because candlestick charting is the best tool available. Can you beat the market? It depends if you are using the right tools.

There are many forms of charting techniques that have been developed over time. Why candlestick charting is superior to other forms of charting like the line charts, bar charts or point and figure charts? One of the best features of candlestick charting is its visual appeal and readability. You can glance at a candlestick chart and quickly gain an understanding of whats going on with the price action in the market.

You can easily spot opening and closing price of a security or currency on a candlestick chart. These price levels can be a very important area of support and resistance from day to day.

There are certain specific candlestick patterns that can help you identify when is the best time to buy, sell or wait on a trade or investment. This information can be extremely useful for short term traders like day traders and swing traders.

Now in order to trade and invest effectively using candlestick charts you need to understand these candlestick patterns. These candlestick patterns can be a real boon to your trading and you can combine them with other technical indicators for even more reliable results.

Patterns appear on the candlestick charts as simple, single stick occurrences or complex multi stick formations. Many different types of candlestick patterns can tell you what may lie ahead in the market.

Entry and exit are the two most important things in any trade. You may use the information provided by candlestick patterns to decide when to get into a trade, when to get out of a trade or even when to hang unto a trade you are already in. This information can be highly valuable in knowing that the prevailing trend might reverse or continue.

This is the best candlestick guide in the market and you dont need to waste your money on buying a guide because this candlestick guide is a complementary gift for you from the Options University. Download your 82 page candlestick guide here complete with strategy flash cards all free. - 31876

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. Try These 1500 Pips A Day Forex Signals From Heaven. Download Your Free 82 Page PDF Candlestick Guide!

Parameters To Select Your Trading System

By Ahmad Hassam

Why you need a trading system? You need a trading system to make sure that your trading decisions are not arbitrary and based on your whims or emotions. When selecting a trading system, first try to paper trade it. You need to paper trade your trading system to get the bugs out. Paper trading is not a substitute for live trading but still you can assume that 75% of the results that you achieve in demo trading can be replicated in live trading.

Money management plan for your trading system is a must. A good money management plan will tell you how much you should risk on each trade with that trading system. For that to know you need two ratios. Win ratio and the payoff ration are two highly important figures to know for any trading system. Use the results of these paper trades to calculate your win ratio and payoff ratio. Determine what your personal win ratio and payoff ratio are in using that trading system over time.

It takes three to tango here. The trading system, your money management system and you yourself, all three of you have to gel together. The stronger and more developed the relationship is between the three of you, the more profitable you will be over time.

So for you to become a successful trader, a trading system is not enough. You need a good money management plan as well. Win ratio and the payoff ratio are required in developing a sound money management plan that will work hand in hand with that trading system. What can be the best parameters to selecting your trading system? When selecting your trading system, use these five parameters:

1) The trading system that you select is analytical and not whimsical based on your emotions. Trade entries in the trading system are defined by market price activity, key support and resistance levels, volume and volatility dynamics and not on random and spontaneous decisions.

2) Before you enter the trade, the trading system is supposed to tell about the stop loss. The initial stop loss exit is determined before entering your trade.

3) The trading system that you select is rule based. Just like the trade entries, the trading system determines the trade exits by market price activity, key support and resistance levels, volume and volatility dynamics and fundamental rules, not on any arbitrary dollar loss that you feel comfortable with.

4) You must not underestimate the importance of paper trading though it is not a substitute for live trading. Your trading system has been adequately paper traded or live traded and you have determined your personal statistical performance. You need to know your win ratio and the payoff ratio.

Some traders would like to use the win ratio and the payoff ratio achieved by the other traders. Do not rely on the results that the other got with that trading system. Use the actual results that you attained while using that trading system in calculating your win ratio and the payoff ratio.

Do not try to rely on computer back tested results. Your personal performance results are the real results that matter. You cannot depend on computer results and other traders results.

5) This is very important. Your trading rules should be written out step by step in sequence so that the entries and exits are consistent, clear and above all quantifiable. This makes your trading mechanical and emotions free.

One perfect example of a rule based trading system is the Turtle Trading System. Have you ever heard of the Turtle Trading System? You must read the story of the Turtle Trading Experiment. Turtle Trading System was developed for the commodities futures market.

You must know the story of Turtle Trading Rules. The story of Turtle trading rules is very interesting. The creators of that trading system had a discussion one day. One was of the opinion that great traders are born. The other said great traders can be made.

Both the great masters had a bet. Advertisements were placed in the Wall Street Journal and the Barrons. After short listing, a number of completely new traders were selected to teach them those rules and see if they could become successful traders. Many succeeded with the turtle trading system and became highly successful traders. But only those succeeded who had the discipline to consistently apply the Turtle Trading Rules while trading. - 31876

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. Know Forex Charts! Try This 1500 Pips A Day Forex Signal Service!

Learn about Sugar Commodity Trading, Follow Sugar Commodity Markets

By Marianna Gomes

At a time of rising global agricultural prices, what are the opportunities in sugar commodity trading for the trader or investor looking for exposure to commodities as an asset class? In 1974 this soft commodity witnessed a price spike of over 60 cents a pound and another over of 40 cents a pound in 1981, at the end of the 1970's commodity bull market. It seems the sugar market and commodities in general are no different in 2009. Following the serious global economic slowdown in 2008, markets are recovering and sugar commodity prices are at their highest for 28 years.

There are numerous cases of serious sugar shortages as desperate consumers across Asia queue for small quantities of this key commodity. To think that while in 2007 India was a major exporter of sugar, with a surplus of five million tons, but from 2009 the country is a net importer. So what has caused this serious imbalance between world sugar demand and supply? After the shock of the global economic crisis, the US dollar is falling against other currencies and hopes of a strong rebound are causing real asset prices to be driven higher. Add in the weak monsoon season in India and very unhelpful weather for sugar plantations in Brazil, impacting adversely on sugar yields, and the result is raw sugar prices heading for a high of 25 cents a pound.

Preparing for your sugar commodity trading analysis, find out where sugar comes from, in what forms and consider the recent phenomenon that threatens to change the dynamics of global sugar commodity markets in future. Between 75-80% of sugar comes from sugarcane, produced in over 100 countries globally, largely from the tropical and sub-tropical areas of the southern hemisphere. Rainfall is important for successful crop yields, with ideally around 600 mm needed annually. In addition to bad weather, crop infestation due to pests is another variable causing a rise in sugar prices on world commodity exchanges.

Key producing nations are led by Brazil, also the largest global exporter, then India, China, the EU, USA and Australia. Subsidy regimes in Europe and the US are a major distorting factor in world sugar markets, as they artificially support producers giving them prices higher than the world sugar price. As well as established uses in fruit and vegetable products and in bread fermentation, sugar is now increasingly used as a source of ethanol fuel.

Moving on from 2007 when there was already very little room between supply and demand, the situation will almost certainly deteriorate with an expected demand surge in emerging BRIC nations particularly China and India. In fact India as the largest consumer in the world is now using significantly more sugar for ethanol as an alternative fuel. Meanwhile, starting from a very low base of 7kg annual per capita consumption is China, and as the world's third largest consumer and producer, is still some way behind the annual USA per capita demand of 45kg.

You will help your sugar commodity trading strategy by getting to know about the Brazilian market, the largest world producer. This country's strategy is to avoid a sugar glut by taking any surplus sugarcane crop to produce ethanol for biodiesel for export and domestic consumption. More sugar is being channelled for ethanol as crude oil prices rise, along with sugar demand surges in China. There are major challenges for sugar producers going forward, given the likely high crude oil prices in future coupled with growing demand, seeing sugar prices remaining high.

Armed with your chosen commodity trading system and good advice from your professional financial adviser, you can trade from almost anywhere in the world with good internet access. The #11 Raw sugar futures on the ICE US Futures platform is the most heavily traded sugar futures contract globally, followed by the #16 Sugar futures contract. It is also possible to use LIFFE CONNECT, part of the NYSE Euronext Group, to trade raw sugar futures. For those hesitant about leveraging in futures, an alternative could be to look at a soft commodity index using an ETF. Broadly speaking, higher sugar prices suggests sugar commodity trading looks very exciting going forward, given growing sugar consumption in the BRIC economies and rising demand for bio ethanol. - 31876

About the Author:

Covering soft commodities, the author, Marianna Gomes, writes articles for the Commodity Trading Today website, a helpful online resource. Discover more about how you could benefit from sugar commodity trading suggestions here.

Understanding Spot Forex Market (Part II)

By Ahmad Hassam

The worlds big banks are the main players in the spot forex market. These big banks make an exclusive club where most trading activities take place. This club is known as the Interbank Market.

Unlike other markets, the interbank market operates on the principle of highest credit standing in dealing with the counterparty in any forex transaction. For this reason, big banks prefer to deal with big banks only. As a result smaller fish are shut down the line from the interbank market. Down the hierarchy in the spot forex market are the smaller banks, big multinational companies, hedge funds and other institutional investors or speculators and the retail forex brokers. The wealthier you are and the more money you have or are able to get credit for, the more chances you have of accessing this big boys club.

These players conduct currency transactions in the interbank market if they have large capital and have credit standing with the large banks. The independent retail traders lie at the bottom of the market structure.

The retail forex traders trade through their forex brokers. They generally trade in much smaller lot sizes. Central banks are also occasionally involved in currency transactions. So there is no central exchange in the spot forex market to set the prices. Then who sets the currency prices?

Market makers make the bid and ask prices based on the currency movements that they anticipate will take place. Without a central exchange, the currency prices are set by the market makers.

Many banks have professional traders solely dedicated to trading forex for speculation. Largest banks are the major market makers and they handle billions of dollars worth of forex transactions on behalf of their clients like the other institutions and companies and also for themselves.

This big money laden network is knows as the interbank market. Interbank market is where large banks deal with one another. The resulting massive flow of money handled by these big banks is what primarily drives the currency markets.

Most of the trading activity takes place in the interbank market. The transactions carried out by these big banks like the Citigroup, Barclays, UBS, Deutsche Bank etc amounts to the greatest bulk of the total daily forex volume.

How do the big banks deal with one another in the interbank market? The banks deal directly with one another through the electronic brokering platforms like the Electronic Brokering Services (EBS) or Reuters Dealing 3000 Matching. These brokering services get the best available rates for the various currency pairs. Products from EBS, Currenex, FXAll etc enable banks to reach a larger client base while still maintaining control over their risk. The reality is that a small group of banks control the forex market.

A forex transaction is not the exchange of cash for another asset like the stocks or oil but rather the exchange of cash today in return for the acceptance of cash at a later date. In order to do this the banks need to know that the counterparty is of highest credit standing. The banks establish specific credit lines with one another in order to deal with one another in the forex market as there is no exchange to serve as each banks counterparty. These brokering systems match buying and selling requests from the bank dealers. Between these two competitors they connect at least 1000 banks together.

Smaller banks that also trade forex also get access to these brokering platforms. Next large companies come. As the main market makers, these big banks constantly quote bid and offer prices to one another thereby making the market. - 31876

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Try These 1500 Pips A Day Forex Signals From Heaven. Develop Your Own Forex Trading System!

You Should Have A Stop Loss (Part I)

By Ahmad Hassam

Do you have a trading system that tells you when to enter the market? Lets assume that you already have got a trading system that tells you where to enter the market. Does this system also tell you where to get out before you enter the trade?

In other words are you taking the market conditions into account and willing to give your trade a breathing space so that you dont get whipsawed or repeatedly get stopped out. On the road to profitability, lets start by agreeing that we need stop loss exits.

Just dont forget, the more trades you place, more commissions or spreads you will have to pay and the higher your trading cost will be. After this agreement on having stop loss exits, we need to determine how to effectively select stop loss exits to avoid excessive stop outs.

So right there you can increase your profitability if you increase the number of winning trades that is your win ratio thereby decreasing your trading cost. The best way to do this is to develop a stop loss strategy that takes into account currency market conditions.

There need to be a connection between you and your trading system. It truly is like having a personal relationship. Finding the right trading system can be a lengthy process. You must believe in your trading system and have a high degree of trust that it can produce consistent level of profits overtime.

If you have a trading system that isnt working for you and your win ratio and your payoff ratio dont generate a profit over time then you need to rethink your trading strategy. But you must also understand that no trading system can be perfect and no trading system can produce 100% winning trades.

When you lose a trade, it can be your trading system or it can be you yourself. Determine if it is your trading system that isnt working or is it your trading psychology that is off. Make adjustments to entry and exits. Maybe the market conditions have changed and you havent adjusted your trading system to the new market conditions.

Just keep this in mind that to jump constantly from one trading system to another trading system in search of a holy grail wont help you if you dont give your trading system a chance to work.

Divorce is never a good idea. But if the things dont work out there is no recourse except taking a divorce. Divorce of any kind can be emotionally and financially expensive so proceed with caution when divorcing your trading system. The decision to divorce your trading system should be a carefully thought out one.

The primary purpose of your trading system is to make you feel comfortable and confident. If you feel comfortable and confident with your trading system, you ultimately will also be profitable.

In the end, you need to develop a relationship with your trading system. You will feel confident when your trading system has proven to you and you have proven to your trading system that both can work together. Its a team work. - 31876

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. Try These 1500 Pips A Day Forex Signals From Heaven. Download Your Free 82 Page PDF Candlestick Guide!

Understanding Spot Forex Market (Part I)

By Ahmad Hassam

The spot forex market is a decentralized network of buyers and sellers. There is no physical central exchange that acts as a central clearing house. The spot forex market is an over the counter market.

Over the counter means that the buyers and sellers make a binding contract with each other after agreeing on the price and this is not carried through an exchange unlike the forex futures trading that is carried out through the exchange like CBOT, CME etc.

What are the advantages of a centralized market over OTC market? There is a better price discovery in a centralized market and there is trading anonymity something that big players want to hide their trails. There are several other advantages of a central exchange too like the counterparty risk for the trade is reduced. Forex traders in the spot forex market carry out their activities by dialing directly with one another or through brokers on telephone or internet.

For all the practical purposes, the spot forex market is unregulated and free of distorting red tape. The sheer size of the daily trading volume something like $3 trillions means that the government and the central banks interventions have little long term effect on prices. Chicago Mercantile Exchange (CME) along with Reuters launched the worlds first centrally cleared global forex market place in 2007; FXMarketSpace. CME will act as the clearing house and guarantee the performance of all the contracts for both buyers and sellers in this centrally cleared system.

Only sophisticated investors with net worth of more than $20 Million can trade on the FXMarketSpace. Unfortunately FXMarketSpace is an institutional trading platform and is not open to retail forex traders.

There are many players involved in the spot forex market. Recently NFA (National Futures Association) had also passed certain new rules that make it more skewed against the small investor like you and me. The spot forex market is still skewed against the retail forex trader. Why is it so?

The spot forex market has always been an unfair playing field for the big boys. It became possible to introduce trading platforms for the retail investors with the advent of the internet. Previously spot forex trading was the playfield of the big banks, multinationals and the hedge funds.

A mushroom growth of online forex brokers took place. Many did not have even enough capital with them to start the brokerage business. But this is the way; the spot forex market has developed over the years.

Why these players trade forex? What type of advantages they have over the retail forex traders? It is essential for you that you understand the nature of the spot forex market and who are the main players. Off balance sheet earnings are the declared aim of most banks and spot dealing in forex which represents a high loss potential but practically no credit risk falls in that category.

Over the counter nature (OTC) of the spot forex market means that currency transactions do not take place at any single place. Instead OTC means that the spot forex market is spread all over the globe.

Players in the spot forex market range from those who trade billions of dollars daily to those who only trade just a few thousand dollars daily. A players access to the spot forex market depends on the quantity of transactions of large amounts of money. Now who are the main players in the forex market against whom you as a retail forex trader will be competing? - 31876

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Try These 1500 Pips A Day Forex Signals From Heaven. Develop Your Own Forex Trading System!

Forex & Other Financial Markets (Part II)

By Ahmad Hassam

The lower the prices of oil, the lower the inflationary pressures are going to become but this is not always true. The higher the price of oil, the higher the inflation would be and the slower the economic growth is going to become. Take oil as an inflation input and a limiting factor on the overall economic growth.

The global oil reserves are finite. With the rising energy demand in emerging economies like China, India and Brazil, the prices of oil are expected to rise and reach around $200 per barrel in the coming few years. We would like to factor changes in the prices of oil into our inflation and growth expectations and then draw conclusions about the course of US Dollar from them. Above all, oil is just one input among many.

Stocks: Almost everyone is familiar with stocks and the stock markets. You can take stocks as microeconomic securities rising and falling in response to individual corporate results and prospects. Stocks are units of ownership rights that get traded on the stock exchanges. You must have invested in stocks sometimes back. Many people invest in stocks. Buy and hold is the best strategy that has been followed over the years by the stock investor. Warren Buffet is the famous example who became the second riches man in the world by investing in good stocks over the years.

You can think of individual countries as companies and their currencies as stocks that get traded in the global financial markets. Currencies are essentially macroeconomic securities fluctuating in response to wider ranging economic and political developments. As such there is no intuitive reason that stock market should be related to the forex market.

There was a boom in the Tokyo Stock Exchange a decade back. Many investors wanted to take part in that boom. But in order to invest in Japanese stocks, they needed Japanese Yen (JPY). Heavy buying pressure on JPY made it appreciate. So sometimes a relationship develops between a stock market and a currency. If you have all your money invested in the stock market, you are completely at the mercy of the movements of the stock market. If you diversify your investments a little bit, however, and put the majority of your money in the stock market and a portion of it in the Forex market, you can retain more control of your financial future. Diversifying your money enables you to react to the movements of the market, regardless of its direction. However, long term correlation studies bear this out that there is no major relationship between stocks and currencies. Major USD currency pairs and the US equity markets over the last five years have almost zero correlation coefficients. However, the two markets occasionally intersect as the above example shows.

For example, when equity market volatility reaches extraordinary levels lie when S&P 500 Index loses 2% in a single day, USD may experience more pressure than it otherwise would have. But there is no guarantee of that. The US stock market may drop on an unexpected hike in the US interest rates while USD may rally on the surprise move.

Bonds: When interest rates are on the rise, at some point, doing business becomes difficult, and when interest rates fall, eventually economic growth is energized. The bond market rules the world. Everything that anyone does in the financial markets anymore is built upon interest rate analysis. Globalization is here to stay. At the center of the globalization phenomenon is the entity known as the bond market. As a futures trader, you are likely to deal mostly, but not exclusively, with the U.S. Treasury bond futures. However, over the next 10 or 20 years, or perhaps sooner, the European bond market, and more than likely bond markets in Dubai and China, will play significant roles in the global economy.

That relationship between rising and falling interest rates makes the markets in interest rate futures, Eurodollars, and Treasuries (bills, notes, and bonds) important for all consumers, speculators, economists, bureaucrats, and politicians.

How can you anticipate the interest rate changes in the market? By following the bonds market! Ten-year T-note yields are the key for setting long-term mortgage rates. By watching this interest rate, you can pinpoint the best entry times for re-mortgaging, relocating, or buying rental property, and you can keep tabs on whether your broker is quoting you a good rate. Both the bond market as well as the forex market reacts to interest rate changes and inflation. Bond or fixed income markets have a more intuitive relationship with the forex markets as both are heavily influenced by the interest rate expectations. However, the short term supply and demand fluctuations interrupt most attempts to establish a viable link between the two markets on a short term basis.

Sometimes, the bond markets more accurately reflect the changes in interest rate expectations with the forex market doing the catch up. At other times, the forex markets react first and fastest to the shifts in the interest rate expectations.

Changes in the relative interest rates exert a major influence on forex markets. As a forex trader, you definitely need to keep an eye on the yields of the benchmark government bonds of the major currency countries to better monitor the expectations of the interest rate market. - 31876

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Try These 1500 Pips A Day Forex Signals From Heaven. Develop Your Own Forex Trading System!