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Online forex trading is one of the most lucrative cash generating options available. I am about to reveal some common (and not so common) mistakes which can guarantee failure in forex. Let me show you how to profit where others will fall in Online forex trading.

Mistake 1 – You Will Profit From Every Trade

There is no such thing as a foolproof system which can guarantee you profit on every trade – there is simply no such thing. If you are a newcomer to online forex trading pay attention – you can and will not profit from every trade you make.

Mistake 2 – You Can Make Money Without Understanding Forex

Not knowing your playing field is a sure way to hit every bump and hole in it. It’s not enough to read a few articles from your dealer. You should take the time to understand market fluctuations, so you have the knowledge upon which to base your trades.

Mistake 3 – Your Goal Is To Make Money

Many online forex traders fall into the trap of not planning their fx trades and strategy in advance. They honestly felt that having their eyes on their main goal of making money is sufficient to see them through to success. Before beginning, make sure you have an idea of what kind of trades you are going to potentially make. Open a demo and play around with different methods. If you have invested in a forex trading system, take the time to test it out via a demo account before you risk your won money.

Mistake 4 – You Should Stick With Losing Trades Cause They Always Come Good

Sticking with a losing trade for long enough can be the easiest way to lose serious profits. In fx trading you need to know when it is time to cut your losses and take your profits. It is quite possible to lose all your profits in one single trade so understand when to exit a trade.

Mistake 5 – Basing Trades On Instinct Rather Than Fact

Online forex trading is a numbers game – plain and simple. If you want to make money you must never base any trades on instinct or a gut feel. Only base your trades on fact and trends – this will ensure you have the greatest chance of success.

Mistake 6 – Trade More Currencies And You Will Increase Your Chances Of Profits

Every single currency has certain behaviours which if you take the time to learn, will improve your chances of profiting from market conditions. You are far better off taking the time to focus and understand 2 different currencies – rather than trying to spread yourself across multiple currencies.

Mistake 7 – Think Long Term – Trade Short Term

This is a big misconception – and a common one at that. Many fx traders fall into this trap – basing trades now on what they think will happen down the track. You have to focus in the present and trade in the now. Miss this and you will always be chasing your tail.

Mistake 8 – Make Money By Always Trading

There is often the temptation to always have a trade going – and that the more trades you make the greater chance of profits. This is not right. You have to be able to read the market, and choose your trades very carefully. This will protect your profits.

Conclusion

Online forex trading is a brilliant way to make extra money, provided you have the knowledge and the tools. I hope I have shown you a few traps that you must avoid in order to succeed in fx trading.

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There are many trading systems and strategies out there. There are many free ones printed in trading articles, journals, books and on trading-related websites. You can buy them as software or you can subscribe to them periodically.

Novice traders say they do not have the time, the aptitude, the talent nor the brains to work out how to trade properly. They would rather purchase a program or subscribe to a trading system for hundreds — or in some cases — thousands of dollars. They say they do not have to do anything except be told what to buy, when to buy and how much of it you need to buy. Some ask me if this strategy or approach is advisable for trading the financial markets. To answer this question, I am then forced to consider the advantages and disadvantages of using such an approach to trading.

There are reasons why a trader would use a system or strategy that someone else developed and tested:

1. It is easy. A novice trader does not need to study how the market works and how he interacts with that market. He does not need to educate himself: he does not need to bother with books and seminars. He does not need to test the system, since the seller has already done that for him and reported promising hypothetical or actual results.

2. A novice trader hopes to get a trading system at a ‘bargain’ price: sometimes even for free.

Hazards of trading a system or strategy developed and tested by someone else are the following:

1. Faulty Systems

There are many faulty systems out there. They may be faulty because their assumptions and their mechanisms may no longer be true, accurate or valid. As a novice trader, how can you distinguish between the good systems and the bad systems if you don’t know how trading systems are built?

2. Discipline and confidence

All systems have drawdown periods. Some good systems may not make money for six months or an entire year. Even if it was a good system, can you continue to follow it even if it gives you a loss after a loss after a loss? How can you follow it if you do not have confidence in it? How can you be confident if you do not know the ins and outs of the system and if you have not tested it yourself?

I do not believe that people would blindly follow a system even if they were told that it would bring them riches. I can give someone a trading system, I can supply him with exceptional hypothetical or actual results and still, he would not be able to follow it.

I remember giving my dad a fully-mechanical trading system I developed. I told him a few simple rules and I told him not to question them. All he had to do was to follow them. We both traded it for two months, I grew my small account by roughly 50% (it happened to be a good two months), but he was losing. He wondered why. I asked to see his trading records. When I looked at his trading records, I found that he kept disobeying the rules. When I asked him why he disobeyed them, he wanted to improve the results after it had a couple of losing trades. He was trying to improve the results. According to him, the system asked him to do what he thought was not right during certain market conditions, so he did not follow it. I found simple errors too, including opening trades at market price instead of waiting for buy and sell stop orders at support and resistance levels to get triggered. I also asked that he executes trades at the close, but oftentimes he traded two hours before or after the close at his discretion. There were many more rules he breached. He is a smart man: a former civil engineer and now a manager for a big organisation. Why could he not follow instructions? It is simple. He did not know the reasons behind the rules I had set and so he did not appreciate them. His money was on the line and after a series of losses, he lost faith in the system easier than I did because he did not develop and test it himself.

To overcome the hazards above, I see no way except for a trader to learn how to develop his own trading methodology. This is the only way a trader can know if a particular system or strategy is good or not.

Once a trader learns how to develop systems and strategies, he can then be better equipped to test them as well. By this point he might even find that he is better off using the system he created, because it becomes increasingly difficult to find another system more suited to his profit objectives while operating within his risk tolerance levels. It is likely that once he develops this level of competence, he will simply acquire other systems only to dissect them, grab the parts he likes and add them to his own system. To me, the irony is that for a trader to know which system to purchase, he must first learn how to create a system. And after knowing how to create a system, he will no longer have the need to buy one.

In conclusion then, I would have to say that if you are not inclined to learn how to develop your own trading methodology, then perhaps you should consider giving your money for someone else to invest. Give it to someone who is trading a system that he developed and tested himself because he is more likely to have the confidence and courage to follow his own set of rules.

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If you’re thinking of trading FOREX, you’ll need to set up an account with a FOREX broker. Most traders use a broker to handle their transactions. It’s easy to feel overwhelmed by the volume of brokers offering online services. Before selecting a broker, it’s best to take the time to carefully research your options. Become knowledgeable about the available services and the fees charged by various brokers.

Brokers are the people or companies that buy and sell orders according each investor’s selections. Brokers make their living charging commissions or fees for their services.

You could, of course, attempt to decide on a selection of online brokers by getting in touch with their Internet help-desks and see how promptly they respond to your inquiry. You can check out whether their answers to your questions satisfy you. Remember, pre-sales service is likely to be better than post-sales service. This can be the case with any online business, not with just brokers.

Word-of-mouth advertising is always the most believable, and is applicable to FOREX trading as well. See who your family, friends and colleagues are working with and what, if any, complaints or problems they’ve experienced with different brokers.

You will want to be aware in advance about any fees involved. What is the spread and is it fixed or variable according to the type of account? Are there wider spreads for mini accounts? What other charges are there? Smaller spreads equate to higher profits for traders, but there may be a trade-off with poorer service.

Customer satisfaction and safety are part of the equation. Online brokers are supposed to offer automatic execution and have clear policies regarding slippage. They should be able to anticipate how much slippage to expect in both run-of-the-mill and fast-moving markets. You’ll want a broker that responds quickly with minimum slippage.

Margin accounts are the bread-and butter of FOREX trading. Things you’ll need to know include the margin requirements, how it’s calculated, does it vary with the currency traded and is it always calculated on the same of the week? Some brokers offer different margins for standard and mini accounts. Be sure you’re familiar with your broker’s margin terms before establishing an account.

Above all else, look for dependability and the facility to maneuver well in dynamic markets. Moving software is vital to online FOREX traders. The software should offer automatic trading. It may include trailing stops and trading from the chart special features or they may come attached to an extra fee. Be sure you know in advance what your trading needs are and what your broker charges for them. Check out the opportunities available by testing a demo account with a selection of online brokers.

It’s also a good idea to learn whether the broker insures clients’ funds and the scope of the insurance. Other research should include the broker’s policy for minimum account balances, interest payments on account balances, which currencies can be traded and whether non-standard sized lots can be traded.

A FOREX broker should be partnered with a large financial institution such as a bank to facilitate providing the funds essential for margin trading. In the United States brokers should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.

The bottom line is to gather all this information and then look at the overall picture before deciding to go with any particular broker.

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One of the questions every Forex trader has, beginner or experienced, is what does good forex methods consist of? This article is about knowing what constitutes a good trading method, and what most methods look like ( what makes them not effective). This will help you evaluate a forex method.

There are trading methods and systems on the market, most of them are ineffective. Why? They share the following short comings:

- Too many courses there offered are not complete. they focus more on “theory”, but not really show how a Forex trader should succeed. Little to no time is spent teaching step-by-step forex strategies to help plan a trade.

- Most of the traders make this common mistake : not having risk management in their trades. If your Forex Course or system doesn’t include risk management, might as well walk away and find another.

- Fundamental analysis. Time consuming is not what you want in learning Forex. Most focus on fundamental analysis which require deeper study and has complex economic and financial issues.

- Most will require you to day trade. Most of the systems I encounter require being glued to the computer most of the time to be able to spot “opportunities”. Which is definitely not necessary.

… Then what is an effective , profitable method?

Based on research and interaction with forex brokers, traders and mentors, this should be the gauge in determining is a method is good or not.

- Complete. It must be teaching set up conditions, entry rules, initial stop rules and exit strategy. A careful and complete method leaves no profits to luck.

- according to this method, they must have money and risk management solutions. Meaning, a course or system must have risk management course.

- Must use technical analysis tools, but is not a fully automated or mechanical system.

- Forex Freedom must be the objective of this method. It is favorable to spend 20-40 minutes a day trading with this method.

This will help Forex traders in distinguishing the real from what is not. No wonder 95% of the traders fail. Forex Trading Tools should provide complete explanation ( of how to trade forex and protect your trades) and is easy to understand are the methods every trader should have in trading.

Forex trading freedom?I do it in less than 20 minutes a day.

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With the Forex day trading market capturing the attention of people all around the world it is very important that you learn a few key tips to help you ensure that you are properly on your way towards getting the results that you are after. Simply jumping into the market is not likely to give you the results desired and instead will leave you frustrated. Following these five simple tips will help you to ensure you get the best results possible from all of your Foreign exchange trading transactions.

Stick to pairs – This is a golden rule of thumb. While of course you can trade the currencies across each other without penalty, it is a wise idea to limit the currencies that you deal with. Even better to restrict them to pairs that you can easily compare to each other. Of course you can compare the USD to all of the other currencies if you are looking to engage in a new transaction, but if you are considering all of the currency choices available it might take you hours to pick one which could still turn wrong. It is much better instead to choose a pair that you always use together. For example, you could do pairs involving the USD and the GBP with another pair consisting of CAD and AUD. By always trading within these pairs, you are going to significantly decrease the amount of information you need to review for each trade.
Never make a trade without research – The main reason why many traders were not successful in Forex is that their attention is centered on the incorrect information of coming up with their trading decisions. They practically tend to forget the most relevant aspect, the price behavior. The technical indicators are found mainly in almost all Forex day trading systems. Taking a couple of minutes for some quick research is not that difficult and if you are trading in pairs as mentioned in the previous tip you will find that it is quite easy and fast to do.
Plan your strategy out – If you were going to build a house and expect it to stand you would do plenty of research to get ready then you would spend a bit of time trying to ensure that you have all of the materials, knowledge and people necessary to be successful. This is a strategy for building a house and in a similar manner; you need a strategy for Currency trade. Diving in is never a good idea for anything and Forex is certainly not any different. Finding true success means having a specific goal in mind, what do you really want from the market? Are you looking to buy a car? Are you looking to fund your retirement? Are you even looking to become the richest person in the world? You need to know where you are trying to go so that you can set up a strategy that you stick to without fail.

The correct mindset is one of the biggest things that is required in order to be secure while engaging in transactions in Forex trading. Knowing what the major problems tend to be and working diligently to avoid them will help you to ensure you get on track properly and stay there. Taking control of your Foreign exchange trading experience really is possible but you absolutely must ensure you get started successfully. Starting out properly is much easier than trying to fix your mistakes after the fact

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Go through this excellent article on Best Forex Platform. An ideal foreign exchange trading framework is the one that satisfies both currency trading brokers and currency traders. Forex brokers wants a currency trading framework that is reliable, adjustable to their needs and straightforward for their traders to use. Forex traders might give more importance to ease of use as well as trustworthiness of the forex trading framework.
Forex trading framework for FX brokers
Many currency trading brokers, especially the major monetary institutions, will have a trading platform custom built for them. Currency exchange is a multi-billion dollar market and a brokerage company will generally sneak a look at all of the forex framework that other brokers are running and then plan to develop something better. The cost of this is definitely high. It might take a lenghty period of time too. Software framework creation, similar to construction, is something that mostly take more time than anticipated.
Smaller FX brokers cannot normally afford to have the Software framework designed for them from zero. As an alternative, these foreign exchange brokers might purchase a foreign exchange trading framework that they can use out of the box. However, expert traders will identify this and might stay away from such FX brokers. It is hard for forex traders to have confidence in a currency trading brokers that does not appear to be putting any money in its forex software platform.
A compromise that works well for a number of forex brokers is to obtain a pre designed package and then have someone customize it for you. The apperance of the platform can be changed to include company logo, company color schemes etc..
Forex Platform for Traders
Small traders will usually use whatever platform their FX brokers provides. The trading platform is a major consideration while looking for a currency trading brokers. For some forex traders, this is more important than charges. They might choose a bigger spread for the sake of the precise Fx charts or information that they require to run a trading system that they understand is profitable.
Besides, foreign exchange traders who make use of atopilot systems like Forex Derivative to trade the foreign exchange market will require a forex framework on which their robot can operate. Most of the widely used forex expert advisors run on the meta trader 4 platform which you can is available online for free.
But keep in mind that a good live trading system like Forex Confidante can beat any auto pilot programs online