Wednesday, May 28, 2008

forex analysis Information

Forex Trading - Scale Trading

Scale trading is a method of trading that was originally developed for commodity traders. In it's most basic form, you buy a commodity as the price sinks. You do this because you know the price of corn, oil, wheat, live cattle, etc can't go to zero. These are real products that the masses need.

Then as the price rebounds, the futures contracts are sold off at prices slightly higher than when they were bought. If the price dips before all contracts can be sold, then more are bought with the profits of the ones that have already been sold.

That in a nutshell is how scale trading is done in futures. One of the most important keys to this method of trading is simply making sure that you don't run out of capital. You are going to let the price run against you. If you don't properly prepare ahead of time, you could be out all your trading capital.

Just like commodities, we know that currency prices will not get to zero (unless the currency becomes totally worthless, and believe me, if a currency like the dollar or euro becomes worthless, you will have much bigger problems than the fact that the currency itself is worth nothing!)

To effectively scale trade currencies, you need to find the major resistance points in the market. By major I mean MAJOR. You are going to treat these points as the zero line. Then from where ever the price is now get the difference between the price and your zero line (major resistance).

That is the distance you have to cover with your trading capital. Divide it into equal parts so that you won't run out of capital even if you have to buy all the way down.

The as the price dips, you buy. As it surges back up, you sell taking your profits.

Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".

Download it free here: Forex Trading

Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide

Forex Trading Systems - Thinking of Buying One? Then Look For This

I read a lot of material on forex trading systems and the great copy offering me huge profits for $100 or so, sounds great!

Then when I come to buy the system I look for one thing and one thing only to see if it?s worth me parting with my money.

Its obvious but most forex system buyers don?t think to ask the obvious its:

The real time audited track record from the vendor.

After all if they make claims about how great their system is shouldn?t they be trading it and shouldn?t they have some proof it makes money?

Of course they should!

In most cases however with forex trading systems all you get is a hypothetical track record at best, or a load of vague claims without substantiation.

A hypothetical track record means absolutely nothing.

Let?s define exactly what this means:

It means the person had all the closing data in hindsight and can simply make the profit and loss whatever they want it to be.

You never see one that loses money.

Let?s face it, if we are doing a track record knowing the closing prices anyone can make money as they know what the prices did.

My 10 year old boy can do that!

There are some good forex trading systems out there and the best way to get one that is reputable is to get a trader who puts his money where his mouth is and trades his own system.

Would you take driving lessons from someone who had not driven before?

Of course you wouldn?t!

Use the same rule in trading if the vendor doesn?t have the confidence to trade his own system why should you?

Don?t fall for the hype

Fact is, there are many forex trading systems sold by vendors without track records and they know their systems don?t work and that?s why they don?t trade.

Of course, they make money from greedy and foolish people who fall for the copy.

Vendor wins you lose ? Simple.
People will say the fact that a froex trading system just because it has made money in the past does not mean it will make money in the future and of course this is true, but I Like the fact the person selling at least has shown profit and has the confidence to trade.

My view is never trade a system without a real time track record of at least two years.


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Forex Trading - Forex as a Home Business

There is a learning curve with any business. Doesn't matter if you want to start some MLM program, do dropshipping, or trade forex.

However, forex for some reason seems to have a huge learning curve. No one knows for sure how many traders fail, but estimates are around 90% to 95%. That may be a little on the high side, however, it does illustrate that you need to really know what you are getting into.

Another disadvantage of forex as a home business is the start up capital. One of the biggest reasons that new traders fail is not having enough capital to see them through the rough spots.

However, the negatives aside, there are some very intriguing things about forex trading. For example, there are no customers.

Sure, customers are the lifeblood of commerce. But as a trader, you don't have customers. All the headaches associated with them don't exist.

Second, down turns in the economy have no effect on you. You trade currencies from all around the world. You don't care if it's trending up or down. It really doesn't matter. You can profit at all times.

So, yes you can be totally autonomous. Just remember what I mentioned at the beginning. The learning curve is steep. You need to have plenty of capital. Trying to trade this market with just a few hundred dollars isn't going to work.

Brokers love people who try to trade like that. If you open an account with just several hundred dollars, they will consider that money already theirs. Sufficient startup capital is very important.

Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".

Download it free here: Forex Trading

Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide


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