Forex Currency Trading For Profit - Exit Strategies
So! You've plunged into trading currencies in the Forex market. You've bought USD/JPY, and prices are skyrocketing. You're elated because the trade so far is going in your favor-- and you're wondering when to get out of the trade. When do you take your profits and run?
If you are in the situation that I just described, you've made one mistake that sooner or later is going to cost you a lot of money-- probably sooner. It is a common mistake made by newbies who are excited about getting into the Forex market and testing their skills. Think of it as by far the best way to wipe out your traing account in record time. Because the bottom line is: professional traders never begin a trade without an exit strategy firmly in place!
There is no such thing as a trading opportunity that is so exciting that you have to get in the trade right then and there or you will hate yourself forever. Remember that currency trading in the Forex markets is practically non-stop, 24/5.5 (not 24/7). Every day is filled with trading opportunities, plenty of them. If you only see the one oh-so-urgent opportunity before you, could it be that you are not quite ready to trade currencies?
Plan your exit strategy at the same time you plan your entry. Wiser words have seldom been spoken. Do no less.
For entry's sake, what kind of profits are you looking for: how many pips? 5 pips? 10 pips? 20 pips? More? You don't have to be dead-set on a specific number of pips. You can just watch and see if the pips grow in your favor. But if you know ahead of time how many pips will fill your appetite, getting out of a trade is a snap: exit when you've gotten your pips. Don't get greedy! There will be more pips on the table tomorrow.
How strong are your entry signals? Hopefully, you are not considering a trade based on just one financial indicator, as that, too, leads to financial ruin. Given then that you are using a combination of established financial indicators (MACD, RSI, Stochastics, Pivot Points, trandlines, Bollinger Bands), how often have you seen the combination that you are using succeed? How often have you seen it fail? Have you found any early-warning signs of impending failure in previous similar setups?
How many pips are you willing to risk? No, wait. That's only half the question. How many pips are you willing to risk in order to make how many pips? Will you risk 10 pips to make 10? 10 to make 20? Some say that risking 10 pips is not enough-- that if you're not willing to risk 20 pips, you should not be in a trade. Do you agree or disagree? What does that do to your goal of expecting to profit by x amount of pips in the trade?
The amount of pips that you are willing to risk in order to make x amount of pips is really just a gentle way of asking: where are you going to place your stop loss order? Trading without a stop loss order is kind of like bungee jumping without the cord. Trading currencies in the Forex is often extremely fast-paced. Without an automatic stop-loss order to protect you, you may not be able to get out of a trade in time to prevent losses from reaching disastrous levels.
Finally, here's what I have found to be the best question to ask: how much does the currency pair that you are trading spike? Some currencies (the Yen pairs come to mind) spike quite a lot. What's a spike? A spike is a short candle body with one long wick or with long wicks both top or bottom of the body.
Say price for the USD/JPY is at 120.05 when you buy-- and you're looking at the five minute chart. Price starts rising rapidly, very rapidly, and goes all the way up to 120.17. Then, alas, price starts retracing, all the way back back down to the 120.05 at which you bought. Instead of going back up, price keeps falling all the way down to 119.90. And, still within the same five minute candle, price resumes its upward trend and closes at 120.09. On the chart, the body, the solid part of the candle, is short-- from 120.05 to 120.09. The top wick rises from 120.09 to 120.17, the bottom wick falls from 120.05 to 119.90. That's spiking in both directions!
You bought at 120.05, predicting that price would go up-- and it did, five minutes later, closing 4 pips higher than the open. If your stop-loss order was 20 pips below your entry point, no problem-- you're still in the trade. If instead you placed your stop-loss order 10 pips below your entry point, here comes pain: you got stopped at 119.95, only to have price ending higher, proving your buy decision to be right.
When trading currencies in the Forex market, the bottom line on exit strategies is short and sweet. Have one or don't trade. Know how many pips you want to risk when placing your stop-loss orders. And, if you want to do yourself a favor, know if, how, when, and how often your trade's currency pair spikes.
The Definition Of Forex Is Not "Easy Money"
The definition of Forex is: whenever one form of currency is traded in exchange of another. As with most things online the Forex market has become an opportunistic battlefield for small time people to make big bucks in selling hype. If you do a search for Forex online, you will likely find thousands if not millions of sites dedicated to showing you how to make money in the Forex Market. Most of them always claim the same thing, ?I?ll show you how to make 7 figures a year!?
If you?re like me, you?ve grown so tired of seeing that headline, that you immediately hit the ?X? button when you see that title on a site. Personally I thank them for believing people are so gullible because it?s the only reason I have the job that I have. All day long I receive request for reviews of e-books, memberships, online opportunities and too many other things to name. Most of the time I?m bored out of my mind but the sheer repetition of the same re-canned junk.
So you can imagine my delight when something that I?m reviewing is able to hold my childishly short attention span. By no means is trading on the Forex market an easy venture to understand, nor garner a seven figure income with ease (if it were that easy do you think they?d give it away for a few bucks?). But there are a handful of programs that truly teach you exactly how to go from newbie to earner in fairly short order.
The latest program that came across my desk is called Forex Trading Machine and was developed by a guy named Avi Frister. He?s been a successful Forex trader for over 11 years and his system backs his expertise up. Most of the programs that are successful have found ways to maximize earnings while minimizing risk, and as far as I?ve seen, this is probably one of the most unique and profitable Forex systems available online.
Forex Trading Systems - Picking The RIGHT One To Make Big Profits
Forex trading systems are big business get the right one and you can make big currency profits and get the cost you paid back many times over.
However, most forex systems don?t make money so you need to choose the right forex trading system and this is what this article is all about.
1. Track record
You will see lots of claims made by vendors selling systems and it?s tempting to believe them.
?90% success rate?
?6 figure income guaranteed?
And many more ? The first thing to do is ask for their track record. What have they made with the system?
While this does not guarantee profits in the future it will show the logic of the system is soundly based and the vendor has confidence in it. If they don?t trade it why should you?
Treat hypothetical track records with caution we can all make a profit if we know what the closing price was!
2. Pick a trend following system
That?s longer term by nature ? day trading systems NEVER make money we have written frequently on this if you don?t know why read them.
3. Pick a simple system where the logic is revealed
Why?
Quite simply, if you don?t know how a system makes trades you will not have the confidence to follow it through inevitable losing periods.
Confidence leads to discipline, which is an essential part of trading a forex trading system for profits.
If you don?t have the discipline to follow a system you don?t have one at all!
4. Pick a simple system with a few parameters
It?s a well known fact that simple systems with a few indicators work far better than more complicated systems.
Why?
Because, they are more robust in the face of brutal market conditions.
5. Beware of optimized systems
There are systems that use different rules to trade different markets or currencies.
These are frequent in hypothetical track records.
The vendor can?t make the rules work on all currencies, so they optimize them and this leads to losses in the market
6. Check out the vendor
It?s a fact that most forex trading systems are sold by people who have never traded and leads on from our point about looking for a real time track record.
If they don?t have confidence to trade for real why on earth would you want to take their advice?
These are just a few tips to follow when choosing a forex trading currency system, they don?t guarantee success, but they will certainly put the odds in your favor for finding a good one.
Forex systems can and do make money, but it is all about getting the right one so spend some time doing some shopping around.
A FOREX TRADING SYSTEM WITH REAL TIME SUCCESSFUL TRACK RECORD On all aspects of becoming a profitable trader including info about legendary trader W D Gann who made a $50 million fortune trading go to our website for an exclusive real time profitable Trading system visit our website at http://www.net-planet.org/index.html | |
FOREX ? The Foreign Currency Market - is the hottest trading market in the world today. When you learn FOREX currency trading online, you open the door to incredible investment results as well as diversification for your portfolio.
You can easily see when you learn FOREX currency trading online that the FOREX has benefits that the stock market does not have. You can trade 24 hours a day, since the world currency market is always open somewhere. You can profit in up or down markets, since you do not have to wait for a downtick to trade short (or ?sell?). There are FOREX futures and options available as well, similar to options and future in the stock market.
One of the biggest advantages of FOREX is that you have leverage not available to you in the stock markets. Your trades take place at leverage of 1:100 to as high as 1:200. This means that with $100 you control 10,000 worth of currency ? with the resulting profits and losses. By taking steps to learn forex currency trading online, will see that you can make significant returns eve using day trading, since the leverage available lets you get in and out of the market on even small moves. Of course, this level of leverage also opens you up to losses equally fast, but if you learn forex currency trading online from a reputable course, such as Trading Universe, you will have all of the tools to trade this market with confidence.
FOREX being a worldwide market, the trading takes place online and your brokerage account, charting packages, tools and resources are all available at your fingertips. There are also FOREX trading courses online as well. By taking an online course that you can follow at your own pace, you will be able to go through the course at the same time you trade your free practice account to see the results as you learn. A course should offer a free practice account, along with complete lessons on how the market operates, trading signals you need to know, technical and fundamental analysis of the currency market, entry and pivot points, and money management techniques. You also want a course that has brokers available to answer questions and demonstrate the lessons. Not all courses are the same ? be sure to choose one to learn FOREX currency trading online that is complete, thorough, and gives you all the tools you need to make a profit in this exciting new market.
