So how do you know if automated Forex trading is for you? Because of the risk involved, some Forex traders are a better match for the automated lifestyle than others. Here are five signs that automated Forex systems are for you.
1. You have risk tolerance. Automated Trading has its risks, too, so don’t bet the milk money, or Lactaid money for those who have a high risk tolerance but low lactose intolerance.
2. You don’t want to spend all day watching the market, and all night researching. Automated Forex trading is a lot like letting someone else monitor the market for you -- can you handle the idea of a virtual "third party" making trades from your account?. Trading any financial resource will require a lot of study and research time on your part, and depending on how you trade you may need to do ever more "bookwork". Automated Trading can be trusted to do this "researching" for you, to some degree. The better automated Forex trading systems are based on better research and are more customer friendly. However, are you comfortable with the idea of doing less research in an attempt to earn more money?
3. You'll be trading at least $5,000. Most of the automated Forex trading systems require fairly frequent trading to work properly. If you don’t have at least $5,000 to dump into the market, you may not have enough capital to participate in all that the automated system has to offer.
4. You're looking for better than average returns on little work. If you set up your automated system correctly, this system will have the ability to earn high returns without the massive amount of time and effort that most traders are forced to put in to make proper trades.
5. You want some insurance against poor trading. The fact is that some of you Forex traders just enjoy the act of trading, the excitement of the currency exchange market, and the potential high returns. If you choose to use an automated trading system to trade just a portion of your total account, you will have a "hedge" against failure. The portion of your investment controlled by an automated system improves the odds of success for your total account return.
If you're going to use an automated Forex trading system, be sure you understand the risks along with the benefits. To avoid the standard pratfalls of automated trading, you should keep an eye on your account as often as is possible, avoid "greedy" trading, and hedge your investment. If properly designed and implemented, automated trading systems can be just as accurate as manual trading, with less effort and more time to enjoy yourself. Away from the computer.
Tuesday, September 8, 2009
Automated Forex Trading
By Will Roby
Automated Forex trading appears to be the next big trend in currency exchange trading. Automated Forex system trading is just what it sounds like -- a system for making exchanges on the Forex market without your constant supervision. Automated Forex systems work in many different ways, from e-mail commands sent to your supporting broker to trading platforms that allow you to automate activity with the click of a mouse. Automated Trading is simply a way for a trader to securely trade your account for you.
The benefits of using automated Forex trading are many -- the most important are personaliztion and time saving. What is the fun of making money through currency exchange if you're glued to your computer all day, using a system or application you don't like?
Not only do automation systems offer you the ability to set up your own automated trade parameters, many of them give you several application or web based trading options. Some automated systems, like HyperOrder, offer you several well known trading platforms (TradeStation, MetaStock,etc) as well as the ability to collect trade orders from your email and send them directly to your broker. Set up your customized automation plan exactly how you want it. If you want further personalization, there are even so called "third party" automation systems that allow you to develop your own automated Forex trading system and apply it to any trading utility or website you choose. That makes the automated experience completely personal -- not only can you personalize your automated trading system, but you can choose the application you use to track your system. If you have an affinity for a particular Forex broker or utility -- you can use the GoForex third party automation system to trade on your own terms. Check it out at Go Forex.
Regardless of which automated Forex system you choose, you'll be saving yourself time. We've all known day traders or stock hounds who spent most of the workday tied to the monitor, analyzing trends and making trades. Since Forex never closes, Forex traders often get caught up in trading all night, soaking up valuable time. Using automated Forex trading, you can spend less time with your Forex account, and more time enjoying family and friends.
Automated Forex TradingHowever, automated trading of any kind can be dangerous. If you're a greedy trader, you could set up automated trades that are high-profit and therefore often high-risk. These trades will be executed by the application until you personally change the system -- take just a day or two off from closely monitoring your account, and you could miss a major trend that would have led to a better, or just safer, investment.
You should also be wary of certain automated Forex trading systems that offer "guarantees". The automated Forex market reminds me of the huge market for "gambling systems" instruction manuals and eBooks. There are more automated Forex systems for sale than you can shake a Japanese candlestick at (sorry, just a little Forex joke). Many of these systems advertise returns for all their customers, "guaranteeing" success. However, if there were a system that could guarantee a positive return, every broker and investor in the world would be using it. The fact is, there is no way to guarantee profit in the Forex market. These guarantees target the opposite of the "greedy" crowd -- people who can't stomach the idea of even the slightest risk will jump at the chance to earn a guaranteed profit.
Automated Forex Trading Software & Passive Income
In the past 12 months there has been a growing industry in the forex market which is the Forex Robot or Automated Forex Software Industry. A number of savvy entrepreneurs have developed software that will actually take you out of the equation towards generating passive income or passive residual income from the Forex Market.
I have personally tried a number of different robots over the past year. I have personally used TrendTrimmer and the AutoSkimmer, Forex Killer, FapTurbo, Forex Autopilot ProFx, Double Eagle Break Out and a number of others. The most profitable for me was FapTurbo.
The software turned an account I started with $20,000.00 into $35,000.00 in just 5 days! I was blown away. Less than 3 days later I lost $20,000 in one night because of a dual problem.
1) No one told me that I should change the update time of my computer to the weekends so it does not update during the week when a robot is trading.
2) The FapTurbo Software places stealth stop losses so the brokers cannot manipulate the platform to trigger your stop loss. What happened to me is the robot got me into a trade and then my computer did an update and restarted. This left the fake stop loss registered with the broker. If the robot was still on the charts it would have gotten me out well before the fake stop loss target but it was not.
My account went so far negative I had a margin call and lost $20,000 it was a hard lesson to learn. In any event FapTurbo is a good product but the brokers quickly caught on to its methodology and the results began to diminish.
I eventually stopped using it and started trading myself. I did very well over the next 60 days averaging around 15% per month or more but it was too time consuming. I then discovered what I feel the next evolution in Automatic Forex Trading and purchased that software just recently. If you are considering generating passive residual income through the Forex Market you should consider investigating http://www.automaticforextrading.com for the latest in technology.
The Key To Automatic Forex Trading System
Automatic forex system trading is a really sophisticated and complicated piece of software. It is a simple, yet effect system used to trade foreign currency. What it does is it trades the spot foreign currency market with a computerized automated trading system that enters orders for you. Forex trader’s now have a lot of different automated trading programs to put this attitude to work for them.
Automatic forex system trading is good for those who have the patience and perseverance to work it out on their own. Sometimes you just need a forex trading mentor to help you improve the “soft skills” of trading. There are a lot of skeptics out there who believe that forex trading is too big of a risk. It just so happens that with automatic forex system trading, the risk is cut down. I also believe that investing in any other way besides using an automatic forex system trading involves a lot of risk. You simply set up your preferences in the system’s settings and put it on auto-pilot.
Forex Trading is one of the easiest ways of earning money. If you are not willing to see small periods of loss, then automatic forex system trading is not for you. Software can be a valuable resource if the right one is selected. You only feed the data to this software, and it gives you the signals to trade. If you decide automatic forex system trading is for you, just have some patients and trust your software for the long term, which is the key.
Sajon Hamon is an investor who has discovered a source of secrets to successful forex trading.
Categories: Forex Trading System
Tags: forex trading, system
Are You Looking to Be a Full Time Stock Trader in this Market?
Have you ever wondered how people trade stock full time from home everyday and are still making decent profits in this type of market? You’d be surprised to hear that even when the market is down, there are fortunes to be made. Chris Rowe who is a professional trader knows this and has been trading profitably in good times and bad. However in 2005, he finally started trying to teach other people to trade like him so they could enjoy the good life that his trading has shown him.
Chris Rowe broke out in the the trading education scene in 2005 when popular demand basically forced him to release his first signal service. People saw that he had 100% winners in his last 18 months and basically forced him to begin his signal service which eventually led him into developing his system into a full fledged trading course. This trading course eventually became known as CRISS. It stands for Chris Rowe’s Internal Strength System. And even though this is a trading course it is surprisingly simple.
Chris has an uncanny ability to break things down into simple steps that when all put together make it very easy to comprehend and apply to real life scenarios. This is exactly what he did with the CRISS System. This system is an all encompassing course which will teach one how to identify profitable trades and trade with confidence. But unlike other courses, you won’t be left alone after you purchase this trading course. A full lifetime support system comes with the purchase and was created for the sole purpose of taking average or beginner traders and turning them into full time and independent traders.
For More Information on the CRISS System, visit the CRISS System review site.
Chris Rowe broke out in the the trading education scene in 2005 when popular demand basically forced him to release his first signal service. People saw that he had 100% winners in his last 18 months and basically forced him to begin his signal service which eventually led him into developing his system into a full fledged trading course. This trading course eventually became known as CRISS. It stands for Chris Rowe’s Internal Strength System. And even though this is a trading course it is surprisingly simple.
Chris has an uncanny ability to break things down into simple steps that when all put together make it very easy to comprehend and apply to real life scenarios. This is exactly what he did with the CRISS System. This system is an all encompassing course which will teach one how to identify profitable trades and trade with confidence. But unlike other courses, you won’t be left alone after you purchase this trading course. A full lifetime support system comes with the purchase and was created for the sole purpose of taking average or beginner traders and turning them into full time and independent traders.
For More Information on the CRISS System, visit the CRISS System review site.
Forex Trading
Do you find yourself flaring up at the slightest sign of a drop in the forex market indicators? Or do you obsess about your charts and price indicators that you do not want to spend a second without them in your sight? If you are, there is no question about it. You are emotionally attached to the forex options trading and currency trading game. This sounds so much like an exaggeration but if you are anywhere near these attitudinal states, you are in the danger zone. You are not likely to make wise decision in as far as forex options trading and currency trading is involved if you are in an intense emotional state. The highly-charged forex trading market can make it easy for anyone to fall in this emotional state. That is why any forex trader should have a well-planned forex trading strategy for him to follow.
forex trading
Being devoid of all emotions while trading will allow the forex trader to exercise his options whether good or bad based on his strategy, and be able to deal with the consequences of his trade. The ultimate goal for a good forex trader is never just to make all pips in every trade but to be able to maximize gains and minimize losses in every trade. Wallowing over losses will not do much towards recovery. Even with losses, a good forex trader should be able to activate a contingency plan that could counter-act the effects of particular losses to his forex portfolio. With emotions out of the equation, it will be easier to accept forex trading losses and move on to making more pips.
Trade our ultimate Forex Trading System!
What style is your Forex System?
Our Forex System uses a trading style that specializes in taking profits on small price changes in the area of 3 to 15 pips. This generally occurs soon after a trade has been entered with the average trade time lasting anywhere from 10 minutes to 4 hours. The system follows a strict entry and exit strategy and places about 8 to 12 trades a day. Adhering to these entry and exit strategies is the key to making small profits compound into large gains.
The brief amount of market exposure and the frequency of small moves are key attributes to this Trading System. In addition to these key attributes it is vital to have a direct access Broker such as PFG Best or ATC, or a respectable Broker with a low spread. By doing so it will truly increase this trading strategy's ability to be successful.
Tuesday, September 1, 2009
Planning: A Key to Successful Trading ..
From time to time I get some very interesting confessions. Here is a very recent one, along with a solution.
"Hey Joe! I had been looking at a profitable trade setup all day. I studied indicator after indicator looking for confirmation, even though I know many are correlated and redundant. But I just kept on searching. I thought, ’Maybe I missed something.’ My account is now so small that I just wanted to be sure that this was the right trade. My thought was that I must take into consideration anything and everything that could cause this trade to fail. I can’t afford to lose any more money. What should I do?"
Well, my friend, you need to be able to make a decision, but you can’t do it if you are trading undercapitalized and making your trading decisions out of fear and uncertainty.
You are suffering from too much analysis. You are looking at so many things, you no longer can see straight. If you keep on over-analyzing your trades, it may develop into a deep-seated psychological problem.
Carefully analyzing the possible consequences of your trading decisions is healthy, but it becomes unhealthy when it is overdone. When it comes to trading, it’s important to have a clearly defined trading plan. You want to be sure that any given trade is not going to wipe out your trading account. That is one of the reasons we want you to use a time stop in addition to a money stop. When you use both types of stops you are clearly defining the signs and signals that indicate your trading plan is not working, suggesting that you should close out the trade to protect your capital.
Trading, by its very nature, is uncertain. There is little that can be described as security for traders. Every trade is a new event, and every entry is an entirely new business. A trader does not have the luxury of living from his past accomplishments.
If you have an unquenchable thirst for certainty, then trading is not for you. Uncertainty in trading is co-equal with insecurity. If money represents security to you, you have a real problem as a trader. Losing money not only costs you your financial security, but also your emotional security.
At many of my seminars and private tutorings I tell people that I have completely divorced myself from the money involved in trading. I don’t even know until the end of the month whether I have won or lost. I trained myself to think of trading as an endeavor in which I strive to make points. Only later are those points translated to dollars. In that sense, for me trading is a game. But I never lose sight of the fact that trading is also a serious business.
Insecurity in traders who over-analyze manifests in searching for the holy grail of trading, desperately seeking the right indicator or the perfect trade setup. The problem you’re having is that even when you see something, you are not sure it is sufficiently perfect for you to act on. Why? Because you lack confidence in your ability to trade what you see. Because you lack confidence in yourself. And because you fear the pain of another loss.
Here’s how I was taught to do my analytical work.
First, I went through all my charts to get an overview of the markets. During that time, I looked for trending markets. Trend lines were placed on the charts as long as they had a 30° or greater angle. Until I became used to what that looked like, I used a protractor to determine the angle. This action got me used to identifying the trend. These days it is easily done with your software.
Next, I went through all my charts again looking for "against the grain" moves-the intermediate trend that went against the longer term trend. This alerted me to markets that might soon resume trending.
Then I went through all my charts looking for Ross hooks™. I marked each hook with a bright red "h". Then, in light of the size of my margin account, I tried to select those markets that appeared to have the greatest potential, and I placed order entry stops just above or below the hooks. These were resting orders in the market. I tried to never miss a hook. I phoned my orders in daily.
How did I know which markets had the greatest potential? The answer is simple. I selected those markets that had the strongest trend lines.
Now there was a trick to this. I didn’t want too steep an angle, because in a rising market that often signals that the end of a move is near. Markets that break out too fast and go straight up rarely give an opportunity for entry before they start to chop around in congestion. Markets that have been going up at a steady angle, and suddenly that angle steepens-goes parabolic, are giving a warning that the move may soon be over.
In down markets I was willing to allow a steeper angle, because often a market will move down a lot faster than it moved up.
What I most wanted was trending markets that were making a retracement. Then I could attempt an entry as the market retraced, when it reached the proximity of the trend line, and then seemed to resume its trend, and when it took out the Ross hook™ created by the retracement.
Sometimes I had to wait for weeks before the markets started trending. The same is true today; nothing has changed other than that intraday it can happen a lot sooner. There will usually be at least a couple of markets in that condition, but there are times when there are none.
Yet I did my homework every day. The only way to know when an important breakout, the beginning of a trend, would occur, was to perform my daily analytical work.
Finally, I would set my work aside and take a break for dinner. After dinner, when my head had cleared a bit, I would look at my charts again. I would then do my best to come up with a trading plan. I would try to think through what I was going to do. I would ask myself a million "what if’s." I tried to anticipate what might happen in the market.
Often that kind of thinking would cause me to eliminate some of my potential trades. Also, a second look at times resulted in "why didn’t I see this before?"
For instance, what if you look at a market that is approaching its trend line. Isn’t it reasonable to ask yourself, "If this market breaks the trend line, what would I do?" Ask yourself how such an event would change the picture. If you had a position, would you still want to hold it? If you had no position, would this cause you to take a position opposite what was the trend? If it would, then why not place an order entry stop with limit, just the other side of that trend line? Very often, when prices approach a trend line from what has been a trending channel, they are already in a counter trend within the channel. That means a breakout of the trend line would be a continuation of this newly formed trend.
Finally, I would put my work aside and go to bed. In the morning I would look at my charts once again. Then I would write out scripts for the orders I wanted to place.
I would rehearse how authoritatively I was going to give these orders.
I did all this and more before I entered a trade. But do you know what most traders do? They do their analysis after the trade is made. Too often, they do it when the trade is already going against them.
How many times have you entered a trade, and then said to yourself, "Oh no, why didn’t I see that before?" How could you have seen it if you hadn’t looked, and looked again, and thought about it, and then perhaps looked one more time?
Also, many traders do their analysis after entering the trade in search of a justification for having entered. "Now I’m in the trade, let’s see if I can find out a couple of good reasons as to why!"
If you want to be a successful trader, you have to be hard. Hard on yourself and hard on your broker. I don’t mean that you have to be a rat, or be impolite, or be contemptuous. You just have to be firm in all that you do. You can’t afford to be "Mickey Mouse" about the way you do things. This is a business; you must be businesslike in conducting your affairs.
As a business person, you must manage your business. One of the main functions of management is planning. You have to plan your trades. Other things to look for as you go through your charts are: One-two-three formations, cups with handle, matching congestions, reversal bars, and Doji’s. These should all be part of your plan.
Some people give more thought to choosing which flavor ice cream to eat than to which market to enter and how and when to do it.
By not taking the time for preparation, you end up not having enough time to weigh the pros and cons or really familiarize yourself with what you are getting into.
You don’t have time to realize that prices have supported two ticks away from your entry about forty times in the past. You don’t have time to see that you are trading right into overhead selling. You don’t have time to notice that if prices break out of yesterday’s high, they will also probably take out a Ross hook. You don’t have time to see where prices are in relation to the trend line. You don’t have time to really grasp the overall trend, or the wave that is going counter trend. You don’t have time to really consider where you will place your stop. You don’t have time to read the market and to see what it might be telling you.
All of these things can be done ahead of time. If you do not do your homework, you will end up chasing markets in a desperate attempt to get into "the big move."
by Joe Ross
http://www.tradingeducators.com/
source: http://www.forex-articles.net/article-59.html
"Hey Joe! I had been looking at a profitable trade setup all day. I studied indicator after indicator looking for confirmation, even though I know many are correlated and redundant. But I just kept on searching. I thought, ’Maybe I missed something.’ My account is now so small that I just wanted to be sure that this was the right trade. My thought was that I must take into consideration anything and everything that could cause this trade to fail. I can’t afford to lose any more money. What should I do?"
Well, my friend, you need to be able to make a decision, but you can’t do it if you are trading undercapitalized and making your trading decisions out of fear and uncertainty.
You are suffering from too much analysis. You are looking at so many things, you no longer can see straight. If you keep on over-analyzing your trades, it may develop into a deep-seated psychological problem.
Carefully analyzing the possible consequences of your trading decisions is healthy, but it becomes unhealthy when it is overdone. When it comes to trading, it’s important to have a clearly defined trading plan. You want to be sure that any given trade is not going to wipe out your trading account. That is one of the reasons we want you to use a time stop in addition to a money stop. When you use both types of stops you are clearly defining the signs and signals that indicate your trading plan is not working, suggesting that you should close out the trade to protect your capital.
Trading, by its very nature, is uncertain. There is little that can be described as security for traders. Every trade is a new event, and every entry is an entirely new business. A trader does not have the luxury of living from his past accomplishments.
If you have an unquenchable thirst for certainty, then trading is not for you. Uncertainty in trading is co-equal with insecurity. If money represents security to you, you have a real problem as a trader. Losing money not only costs you your financial security, but also your emotional security.
At many of my seminars and private tutorings I tell people that I have completely divorced myself from the money involved in trading. I don’t even know until the end of the month whether I have won or lost. I trained myself to think of trading as an endeavor in which I strive to make points. Only later are those points translated to dollars. In that sense, for me trading is a game. But I never lose sight of the fact that trading is also a serious business.
Insecurity in traders who over-analyze manifests in searching for the holy grail of trading, desperately seeking the right indicator or the perfect trade setup. The problem you’re having is that even when you see something, you are not sure it is sufficiently perfect for you to act on. Why? Because you lack confidence in your ability to trade what you see. Because you lack confidence in yourself. And because you fear the pain of another loss.
Here’s how I was taught to do my analytical work.
First, I went through all my charts to get an overview of the markets. During that time, I looked for trending markets. Trend lines were placed on the charts as long as they had a 30° or greater angle. Until I became used to what that looked like, I used a protractor to determine the angle. This action got me used to identifying the trend. These days it is easily done with your software.
Next, I went through all my charts again looking for "against the grain" moves-the intermediate trend that went against the longer term trend. This alerted me to markets that might soon resume trending.
Then I went through all my charts looking for Ross hooks™. I marked each hook with a bright red "h". Then, in light of the size of my margin account, I tried to select those markets that appeared to have the greatest potential, and I placed order entry stops just above or below the hooks. These were resting orders in the market. I tried to never miss a hook. I phoned my orders in daily.
How did I know which markets had the greatest potential? The answer is simple. I selected those markets that had the strongest trend lines.
Now there was a trick to this. I didn’t want too steep an angle, because in a rising market that often signals that the end of a move is near. Markets that break out too fast and go straight up rarely give an opportunity for entry before they start to chop around in congestion. Markets that have been going up at a steady angle, and suddenly that angle steepens-goes parabolic, are giving a warning that the move may soon be over.
In down markets I was willing to allow a steeper angle, because often a market will move down a lot faster than it moved up.
What I most wanted was trending markets that were making a retracement. Then I could attempt an entry as the market retraced, when it reached the proximity of the trend line, and then seemed to resume its trend, and when it took out the Ross hook™ created by the retracement.
Sometimes I had to wait for weeks before the markets started trending. The same is true today; nothing has changed other than that intraday it can happen a lot sooner. There will usually be at least a couple of markets in that condition, but there are times when there are none.
Yet I did my homework every day. The only way to know when an important breakout, the beginning of a trend, would occur, was to perform my daily analytical work.
Finally, I would set my work aside and take a break for dinner. After dinner, when my head had cleared a bit, I would look at my charts again. I would then do my best to come up with a trading plan. I would try to think through what I was going to do. I would ask myself a million "what if’s." I tried to anticipate what might happen in the market.
Often that kind of thinking would cause me to eliminate some of my potential trades. Also, a second look at times resulted in "why didn’t I see this before?"
For instance, what if you look at a market that is approaching its trend line. Isn’t it reasonable to ask yourself, "If this market breaks the trend line, what would I do?" Ask yourself how such an event would change the picture. If you had a position, would you still want to hold it? If you had no position, would this cause you to take a position opposite what was the trend? If it would, then why not place an order entry stop with limit, just the other side of that trend line? Very often, when prices approach a trend line from what has been a trending channel, they are already in a counter trend within the channel. That means a breakout of the trend line would be a continuation of this newly formed trend.
Finally, I would put my work aside and go to bed. In the morning I would look at my charts once again. Then I would write out scripts for the orders I wanted to place.
I would rehearse how authoritatively I was going to give these orders.
I did all this and more before I entered a trade. But do you know what most traders do? They do their analysis after the trade is made. Too often, they do it when the trade is already going against them.
How many times have you entered a trade, and then said to yourself, "Oh no, why didn’t I see that before?" How could you have seen it if you hadn’t looked, and looked again, and thought about it, and then perhaps looked one more time?
Also, many traders do their analysis after entering the trade in search of a justification for having entered. "Now I’m in the trade, let’s see if I can find out a couple of good reasons as to why!"
If you want to be a successful trader, you have to be hard. Hard on yourself and hard on your broker. I don’t mean that you have to be a rat, or be impolite, or be contemptuous. You just have to be firm in all that you do. You can’t afford to be "Mickey Mouse" about the way you do things. This is a business; you must be businesslike in conducting your affairs.
As a business person, you must manage your business. One of the main functions of management is planning. You have to plan your trades. Other things to look for as you go through your charts are: One-two-three formations, cups with handle, matching congestions, reversal bars, and Doji’s. These should all be part of your plan.
Some people give more thought to choosing which flavor ice cream to eat than to which market to enter and how and when to do it.
By not taking the time for preparation, you end up not having enough time to weigh the pros and cons or really familiarize yourself with what you are getting into.
You don’t have time to realize that prices have supported two ticks away from your entry about forty times in the past. You don’t have time to see that you are trading right into overhead selling. You don’t have time to notice that if prices break out of yesterday’s high, they will also probably take out a Ross hook. You don’t have time to see where prices are in relation to the trend line. You don’t have time to really grasp the overall trend, or the wave that is going counter trend. You don’t have time to really consider where you will place your stop. You don’t have time to read the market and to see what it might be telling you.
All of these things can be done ahead of time. If you do not do your homework, you will end up chasing markets in a desperate attempt to get into "the big move."
by Joe Ross
http://www.tradingeducators.com/
source: http://www.forex-articles.net/article-59.html
How to Make Consistent Profits Trading Futures Part I
One of the mistakes I consistently made in my early years as a trader was to try to make too much money in relation to my trading capital. To make £1000 a day while Futures Trading with £10,000 is absurdly ambitious; of course I have done it many times, as would anyone with this intention, but I have also gone bust on more than one occasion. To have the aspiration of taking £1000 out of the market each day, when trading with £10,000 or under is, I think, a quick route to the poor house.
So what is a reasonable objective for a day / futures trader?
A few weeks ago I visited an ex-floor trader who has set up a trading operation backing young aspiring traders. I was interested to find out from him how he trains his team. The essence of his approach is to give them a grounding in discipline and confidence. He believes that confidence is one of the primary keys to success in futures trading and that confidence is a by-product of taking money out of the market.
One of the reasons he has chosen to work with young futures traders is that he wants people who have minimal financial commitments. He knows it will take a while for them to start earning an income from the business. So his belief is that if his traders can regularly take small amounts of money out of the market, their knowledge, skills and confidence will grow and in time they will become bigger traders. What is critical about this approach is that his traders do not grow in size until they have achieved consistent, regular success on a small scale; and we are talking small, I mean £25 or £50 in a day.
What can we learn from this low risk approach? Well first let me ask you: what is more important, to make money today, or to become a consistently profitable trader? Because if we want to become consistently successful traders we need to take a different tack than if we are just out to make as much money as we can today.
So back to the question, what is a reasonable objective for a day trader? Well let’s look at bringing our daily target right down to £100, with £10,000 of trading capital, i.e. 1%. Now £100 a day, trading a market like the FTSE seems an achievable target to me. That is a net profit of 10 FTSE points a day. Can you come up with a system that trades 5 times a day and has an average net profit of 2 points? Or a system that trades 10 times a day with an average net profit of 1 point?
Is that a yes I hear? Because if you can make an average of £100 a day you will double your money in 100 trading days i.e. 20 weeks or about 5 months. If you double you position size every time you double your money, your account will grow to £1,000,000 in 140 weeks, which is less than 3 years! Of course this does not take into account the impact of tax; but my point is that by taking a low risk, conservative approach to trading objectives, we give ourselves the chance to grow and develop into traders, while also availing ourselves of the possibility of a deceptively good return.
If at this point you are tearing your hair out and screaming at the screen that I am a fool for suggesting that you can trade a strategy that averages a few points a trade, I assume that you are not familiar with the benefits of direct access trading. Direct access trading effectively gives everyone and their uncle the same low costs, immediate trade execution and access as was exclusively enjoyed by the floor traders before the advent of the electronic market place. To learn about the advantages of direct access trading...
Regards,
Malcolm Robinson
LIFFE Pit Trader & Electronic Trader
InstinctiveTrader.com
source: http://www.forex-articles.net/article-53.html
So what is a reasonable objective for a day / futures trader?
A few weeks ago I visited an ex-floor trader who has set up a trading operation backing young aspiring traders. I was interested to find out from him how he trains his team. The essence of his approach is to give them a grounding in discipline and confidence. He believes that confidence is one of the primary keys to success in futures trading and that confidence is a by-product of taking money out of the market.
One of the reasons he has chosen to work with young futures traders is that he wants people who have minimal financial commitments. He knows it will take a while for them to start earning an income from the business. So his belief is that if his traders can regularly take small amounts of money out of the market, their knowledge, skills and confidence will grow and in time they will become bigger traders. What is critical about this approach is that his traders do not grow in size until they have achieved consistent, regular success on a small scale; and we are talking small, I mean £25 or £50 in a day.
What can we learn from this low risk approach? Well first let me ask you: what is more important, to make money today, or to become a consistently profitable trader? Because if we want to become consistently successful traders we need to take a different tack than if we are just out to make as much money as we can today.
So back to the question, what is a reasonable objective for a day trader? Well let’s look at bringing our daily target right down to £100, with £10,000 of trading capital, i.e. 1%. Now £100 a day, trading a market like the FTSE seems an achievable target to me. That is a net profit of 10 FTSE points a day. Can you come up with a system that trades 5 times a day and has an average net profit of 2 points? Or a system that trades 10 times a day with an average net profit of 1 point?
Is that a yes I hear? Because if you can make an average of £100 a day you will double your money in 100 trading days i.e. 20 weeks or about 5 months. If you double you position size every time you double your money, your account will grow to £1,000,000 in 140 weeks, which is less than 3 years! Of course this does not take into account the impact of tax; but my point is that by taking a low risk, conservative approach to trading objectives, we give ourselves the chance to grow and develop into traders, while also availing ourselves of the possibility of a deceptively good return.
If at this point you are tearing your hair out and screaming at the screen that I am a fool for suggesting that you can trade a strategy that averages a few points a trade, I assume that you are not familiar with the benefits of direct access trading. Direct access trading effectively gives everyone and their uncle the same low costs, immediate trade execution and access as was exclusively enjoyed by the floor traders before the advent of the electronic market place. To learn about the advantages of direct access trading...
Regards,
Malcolm Robinson
LIFFE Pit Trader & Electronic Trader
InstinctiveTrader.com
source: http://www.forex-articles.net/article-53.html
How to Make Consistent ProfitsTrading Futures Part II
Direct Access Electronic Trading
The issue of direct access is an important one and it becomes more important the more short term your trading is. The market can change from a state of seeming paralysis to one of shocking volatility and activity in a flash. The length of time it takes between you deciding to enter an order and the order actually being in the market is obviously important. When I first started trading I used a phone broker and was dismayed that my fills would often be so far from the price the market was trading when I first entered the order.
The first time I visited the trading floor, I discovered why. When I called in an order, first my discount(!) broker would check my account equity, then he would call a phone booth on the floor, the phone broker on the floor would then write the order down and pass it on (by phone) to a booth next to the appropriate pit, at that booth my order would be written down again and then signaled to a broker in the pit to be executed.
As you can imagine this would take quite a long time, even longer of course if the market was very active, as this would mean that the broker in the pit would be too occupied to take new orders. Compare this to my experience of trading as a pit trader. In the pit I was in the heart of the market and could observe every single order as it was executed (there was no delay in my price feed!). To initiate a trade, whether it was to buy or sell at the market, or join the bid or the offer, all I had to do was open my mouth. You can start to see the huge advantage that trading on the floor gave me over off floor traders; and that doesn’t take into consideration the fact that my round trip costs fell by 96%.
Now the floor no longer exists, not in Europe at least, so why talk about the advantages of pit trading? Well the level playing field is now open to all, but very few take advantage of it. Trading with an electronic trading platform is exactly the same as trading in the pit, except I can sit down, it is much quieter and there are no crude jokes flying around. I can trade with the click of a mouse; my order shoots to the exchange, enters in the market and appears back on my screen before I have time to blink. I think the advantages of direct access trading are clear and any futures trader still using a phone broker should move to direct access, they will also find their commissions are less (around £8 for private client traders).
The next question that arises is why trade futures? That is an important consideration given that there are a variety of alternatives vying for your trading capital (spread betting, CFDs and options), but in my opinion, futures are the only option (no pun intended) for successful short term trading.
Regards,
Malcolm Robinson
LIFFE Pit Trader & Electronic Trader
InstinctiveTrader.com
source: http://www.forex-articles.net/article-54.html
The issue of direct access is an important one and it becomes more important the more short term your trading is. The market can change from a state of seeming paralysis to one of shocking volatility and activity in a flash. The length of time it takes between you deciding to enter an order and the order actually being in the market is obviously important. When I first started trading I used a phone broker and was dismayed that my fills would often be so far from the price the market was trading when I first entered the order.
The first time I visited the trading floor, I discovered why. When I called in an order, first my discount(!) broker would check my account equity, then he would call a phone booth on the floor, the phone broker on the floor would then write the order down and pass it on (by phone) to a booth next to the appropriate pit, at that booth my order would be written down again and then signaled to a broker in the pit to be executed.
As you can imagine this would take quite a long time, even longer of course if the market was very active, as this would mean that the broker in the pit would be too occupied to take new orders. Compare this to my experience of trading as a pit trader. In the pit I was in the heart of the market and could observe every single order as it was executed (there was no delay in my price feed!). To initiate a trade, whether it was to buy or sell at the market, or join the bid or the offer, all I had to do was open my mouth. You can start to see the huge advantage that trading on the floor gave me over off floor traders; and that doesn’t take into consideration the fact that my round trip costs fell by 96%.
Now the floor no longer exists, not in Europe at least, so why talk about the advantages of pit trading? Well the level playing field is now open to all, but very few take advantage of it. Trading with an electronic trading platform is exactly the same as trading in the pit, except I can sit down, it is much quieter and there are no crude jokes flying around. I can trade with the click of a mouse; my order shoots to the exchange, enters in the market and appears back on my screen before I have time to blink. I think the advantages of direct access trading are clear and any futures trader still using a phone broker should move to direct access, they will also find their commissions are less (around £8 for private client traders).
The next question that arises is why trade futures? That is an important consideration given that there are a variety of alternatives vying for your trading capital (spread betting, CFDs and options), but in my opinion, futures are the only option (no pun intended) for successful short term trading.
Regards,
Malcolm Robinson
LIFFE Pit Trader & Electronic Trader
InstinctiveTrader.com
source: http://www.forex-articles.net/article-54.html
How to Make Consistent ProfitsTrading Futures Part III
A lot of traders are trading the stock indexes like the FTSE, the DAX, the S&Ps, NASDAQ and the DOW, but rather than use futures they are using spread betting firms. The reasons for using these firms is that they require very small amounts of capital to get started, a trader can trade very small amounts (like £1 a point on FTSE as opposed to £10 for FTSE futures) and these firms make opening an account so easy. I understand the lure of being able to open an account with very little money and trading small amounts, but I have some serious considerations about using spread betting as a realistic vehicle for professional trading.
The two biggest selling points are no commissions and no capital gains tax. There are many different costs to trading, commissions are one and the spread is another (especially when you have to trade at the market as you do with spread betting, with futures you have the choice of joining the bid or the offer). Commissions are important for an active trader and as an active trader you can get them very low, but lets assume they are £8 per round turn for futures and lets assume that the spread in FTSE futures is an average of 2 points. If the spread with a spread betting firm for FTSE is 6 points and assume that we are trading £10 a point we can compare the two trading vehicles.
Last week (written Nov 2001) I made an average of 2.42 points per contract traded and I traded 48 times. That is, for each contract I bought and sold I made £24.20 before commissions, assuming my commission rate is £8, I made a profit of £16.20 per contract traded, which is £777.60 net profit if my average size per trade is one contract.
Had I had the same success trading with a spread-betting firm, with a 6-point spread, I would have lost £1718.40! Now I would rather pay tax on a profit that no tax on a loss.
There is one other very important reason for trading the futures market rather than a non-exchange traded market such as those offered by spread betting firms. The futures markets are exchange traded and this means that they are fully transparent, i.e. everything is visible and above the table, I can see every single trade that happens. Imagine the trading pit, as it used to be when traders stood physically in a ring trading with each other.
When a trade is entered, the order goes into the pit and is represented there, free to be taken by any other market participant. We can all see what is happening, we trade with the same information and with the same advantages/disadvantages. Now assume you are a trader who can only trade with one broker in the pit, you can trade as much as you like, any size you like, but he sets the spread he is willing to offer you and you have to trade at market (i.e. buy at his offer and sell at his bid). This broker doesn’t want to loose money, naturally, so he always makes his spread wider than the real market spread, he also, naturally, puts his interests before yours, so he won’t always be willing to trade when the market is moving fast and he is uncertain.
Remember whenever you make money he loses, so he is very careful to maintain his advantage at all times. Who wouldn’t want to be in this brokers position (he isn’t really a broker, though he claims to be)? When you trade with a real futures broker, all the broker does is facilitate your trade; he gives you the ability to have you orders represented in the pit. A real brokers concern is that they execute your order as efficiently as possible, that is their job, they do not take positions and they do not take the opposite side to you.
They naturally want you to make money because by making money you become a client who will continue to pay them commissions. Trading with a spread betting firm is absurdly costly, spread betting firms are like amusement arcades, they can be fun, but to imagine you are going to make your living from slot machines is illusory.
Regards,
Malcolm Robinson
LIFFE Pit Trader & Electronic Trader
InstinctiveTrader.com
source: http://www.forex-articles.net/article-55.html
The two biggest selling points are no commissions and no capital gains tax. There are many different costs to trading, commissions are one and the spread is another (especially when you have to trade at the market as you do with spread betting, with futures you have the choice of joining the bid or the offer). Commissions are important for an active trader and as an active trader you can get them very low, but lets assume they are £8 per round turn for futures and lets assume that the spread in FTSE futures is an average of 2 points. If the spread with a spread betting firm for FTSE is 6 points and assume that we are trading £10 a point we can compare the two trading vehicles.
Last week (written Nov 2001) I made an average of 2.42 points per contract traded and I traded 48 times. That is, for each contract I bought and sold I made £24.20 before commissions, assuming my commission rate is £8, I made a profit of £16.20 per contract traded, which is £777.60 net profit if my average size per trade is one contract.
Had I had the same success trading with a spread-betting firm, with a 6-point spread, I would have lost £1718.40! Now I would rather pay tax on a profit that no tax on a loss.
There is one other very important reason for trading the futures market rather than a non-exchange traded market such as those offered by spread betting firms. The futures markets are exchange traded and this means that they are fully transparent, i.e. everything is visible and above the table, I can see every single trade that happens. Imagine the trading pit, as it used to be when traders stood physically in a ring trading with each other.
When a trade is entered, the order goes into the pit and is represented there, free to be taken by any other market participant. We can all see what is happening, we trade with the same information and with the same advantages/disadvantages. Now assume you are a trader who can only trade with one broker in the pit, you can trade as much as you like, any size you like, but he sets the spread he is willing to offer you and you have to trade at market (i.e. buy at his offer and sell at his bid). This broker doesn’t want to loose money, naturally, so he always makes his spread wider than the real market spread, he also, naturally, puts his interests before yours, so he won’t always be willing to trade when the market is moving fast and he is uncertain.
Remember whenever you make money he loses, so he is very careful to maintain his advantage at all times. Who wouldn’t want to be in this brokers position (he isn’t really a broker, though he claims to be)? When you trade with a real futures broker, all the broker does is facilitate your trade; he gives you the ability to have you orders represented in the pit. A real brokers concern is that they execute your order as efficiently as possible, that is their job, they do not take positions and they do not take the opposite side to you.
They naturally want you to make money because by making money you become a client who will continue to pay them commissions. Trading with a spread betting firm is absurdly costly, spread betting firms are like amusement arcades, they can be fun, but to imagine you are going to make your living from slot machines is illusory.
Regards,
Malcolm Robinson
LIFFE Pit Trader & Electronic Trader
InstinctiveTrader.com
source: http://www.forex-articles.net/article-55.html
Saturday, August 29, 2009
Introduction to Trading Forex
Foreign Exchange, Forex or just FX are all terms used to describe the trading of the world's many currencies. The Forex market is the largest market in the world, with trades amounting to more than USD 3 trillion every day. Most Forex trading is speculative, with only a low percentage of market activity representing governments' and companies' fundamental currency conversion needs.
Unlike trading on the stock market, the Forex market is not conducted by a central exchange, but on the "interbank market", which is thought of as an OTC(over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the Forex market is a 24-hour market.
Trading Forex
A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the euro/US dollar, or the GB pound/Japanese yen.). The most commonly traded currencies are the so-called “majors” – EURUSD, USDJPY, USDCHF and GBPUSD.
The most important Forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.
Forward Outrights
For forward outrights, settlement on the value date selected in the trade means that even though the trade itself is carried out immediately, there is a small interest rate calculation left. The interest rate differential doesn't usually affect trade considerations unless you plan on holding a position with a large differential for a long period of time. The interest rate differential varies according to the cross you are trading. On the USDCHF, for example, the interest rate differential is quite small, whereas the differential on NOKJPY is large. This is because if you trade e.g. NOKJPY, you get almost 7% (annual) interest in Norway and close to 0% in Japan. So, if you borrow money in Japan, to finance the trade and buying NOK, you have a positive interest rate differential. This differential has to be calculated and added to your account. You can have both a positive and a negative interest rate differential, so it may work for or against you when you make a trade.
Trading on Margin
Trading on margin means that you can buy and sell assets that represent more value than the capital in your account. Forex trading is usually conducted with relatively small margin deposits. This is useful since it permits investors to exploit currency exchange rate fluctuations which tend to be very small. A margin of 1.0% means you can trade up to USD 1,000,000 even though you only have USD 10,000 in your account. A margin of 1% corresponds to a 100:1 leverage(or “gearing”). (Because USD 10,000 is 1% of USD 1,000,000.) Using this much leverage enables you to make profits very quickly, but there is also a greater risk of incurring large losses and even being completely wiped out. Therefore, it is inadvisable to maximise your leveraging as the risks can be very high. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.
Labels: EURUSD, foreign exchange, FX, GBPUSD, margin, market, spot, Trading Forex, USDCHF, USDJPY
Unlike trading on the stock market, the Forex market is not conducted by a central exchange, but on the "interbank market", which is thought of as an OTC(over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the Forex market is a 24-hour market.
Trading Forex
A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the euro/US dollar, or the GB pound/Japanese yen.). The most commonly traded currencies are the so-called “majors” – EURUSD, USDJPY, USDCHF and GBPUSD.
The most important Forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.
Forward Outrights
For forward outrights, settlement on the value date selected in the trade means that even though the trade itself is carried out immediately, there is a small interest rate calculation left. The interest rate differential doesn't usually affect trade considerations unless you plan on holding a position with a large differential for a long period of time. The interest rate differential varies according to the cross you are trading. On the USDCHF, for example, the interest rate differential is quite small, whereas the differential on NOKJPY is large. This is because if you trade e.g. NOKJPY, you get almost 7% (annual) interest in Norway and close to 0% in Japan. So, if you borrow money in Japan, to finance the trade and buying NOK, you have a positive interest rate differential. This differential has to be calculated and added to your account. You can have both a positive and a negative interest rate differential, so it may work for or against you when you make a trade.
Trading on Margin
Trading on margin means that you can buy and sell assets that represent more value than the capital in your account. Forex trading is usually conducted with relatively small margin deposits. This is useful since it permits investors to exploit currency exchange rate fluctuations which tend to be very small. A margin of 1.0% means you can trade up to USD 1,000,000 even though you only have USD 10,000 in your account. A margin of 1% corresponds to a 100:1 leverage(or “gearing”). (Because USD 10,000 is 1% of USD 1,000,000.) Using this much leverage enables you to make profits very quickly, but there is also a greater risk of incurring large losses and even being completely wiped out. Therefore, it is inadvisable to maximise your leveraging as the risks can be very high. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.
Labels: EURUSD, foreign exchange, FX, GBPUSD, margin, market, spot, Trading Forex, USDCHF, USDJPY
Forex Trading Chosing a Forex Broker - What to Look For
Tight Spreads: Look for competitive spreads. This is the difference between the bid and offer and is measured in pips. This is what it will costs to enter a trade, since it is not possible to buy on the bid or sell on the offer in the Forex market.
Forex brokers are usually tied to large banks due to the large amounts of capital required for the leverage that they provide. While the forex market is unregulated, reputable brokers will be registered with the NFA.
Leverage is necessary because the price fluctuations are so small. It reflects the ratio between usable trading capital and the actual capital in your account. Some brokerages offer leverage as high as 250:1 – so in this case the broker is lending you 250 for every 1 dollar in your account.
When signing up for a forex trading account you will be required to sign a margin agreement. This states that due to the fact that you are trading with borrowed funds the brokerage has the right to interfere with your trading to protect its interests.
Forex brokers are usually tied to large banks due to the large amounts of capital required for the leverage that they provide. While the forex market is unregulated, reputable brokers will be registered with the NFA.
Leverage is necessary because the price fluctuations are so small. It reflects the ratio between usable trading capital and the actual capital in your account. Some brokerages offer leverage as high as 250:1 – so in this case the broker is lending you 250 for every 1 dollar in your account.
When signing up for a forex trading account you will be required to sign a margin agreement. This states that due to the fact that you are trading with borrowed funds the brokerage has the right to interfere with your trading to protect its interests.
Tax Strategies for Forex Traders
Forex, the foreign currency exchange market, can be a lucrative one indeed for traders skilled in its dynamics. This worldwide network of government central banks, commercial and investment banks, hedge funds, international corporations and brokerage firms enables traders to capitalize on the rise and fall of a currency dollar volume that exceeds $1.4 trillion every day, making it the largest and most liquid of the world markets.
But when income tax time rolls around, currency traders receive special treatment from the Internal Revenue Service, the subtleties of which can sometimes trip up the unsuspecting.
Here's a look at the tax landscape for forex traders, and why it may be a good idea to have a Traders Accounting tax professional help guide you through the twists and turns.
Futures and Cash Forex
Forex is traded in two ways: as currency futures on regulated commodities exchanges, which fall under the tax rules of IRC Section 1256 contracts, or as cash forex on the unregulated interbank market, which fall under the special rules of IRC Section 988. Many forex traders are active in both markets.
Because futures and cash forex are subject to different tax and accounting rules, it is important for forex traders to know which category each of their trades fall into so that each trade can be reported correctly to receive optimum tax advantage.
Section 1256: The Advantageous Split
Forex traders receive a significant tax advantage over securities traders under Section 1256: reporting capital gains on IRS Form 6781 (Gains and Losses from Section 1256 Contracts and Straddles) allows you to split your capital gains on Schedule D, with 60%
taxed at the lower long-term capital gains rate (currently 15%) and 40% at the ordinary or short-term capital gains rate of up to 35%. That combined rate of 23% amounts to a 12% advantage over the ordinary (or short-term) rate.
If you trade exclusively in forex futures, it's smooth sailing come tax time; your trades fall under Section 1256 and automatically receive the 60/40 split.
But things get a little more complicated tax-wise if you dabble in cash forex, which is subject to Section 988 (Treatment of Certain Foreign Currency Transactions).
Section 988: To Opt Out or Not?
Section 988 was enacted as a way for the IRS to tax companies that earn income from fluctuations in foreign currency exchange rates as part of their normal course of business, such as buying foreign goods. Under this section, such gains or losses are reported and treated as interest income or expense for tax purposes, and do not receive the favorable 60/40 split.
Because forex futures do not trade in actual currencies, they do not fall under the special rules of Section 988. But as a currency trader, you are exposed daily to currency rate fluctuations, hence your trading activity would fall under the Section 988 provisions.
But because currency traders consider these fluctuations part of their capital assets in the normal course of business, the IRS enables you to opt out of Section 988, and thereby retain the favorable 60/40 split for these gains under Section 1256.
The IRS requires that you note "internally" your intention to opt out of Section 988 before making the trades; you are not required to notify the IRS. Obviously, some traders bend this rule based on their year-end outcome, and there seems little inclination on
the part of the IRS to crack down, at least so far.
As a rule of thumb, if you have currency gains, you would benefit (reduce your tax on gains by 12 percent) by opting out of Section 988. If you have losses however, you may prefer to remain under Section 988's ordinary loss treatment rather than the less favorable treatment under Section 1256.
Tax Time: Tougher for Currency Traders
Forex futures traders tend to breeze through tax time; their brokerage firm sends them an IRS Form 1099, on which their aggregate profit or loss is listed on Line 9.
But since currency traders don't receive 1099s, you are left to find your own accounting and software solutions. Don't be tempted to simply lump your currency trades in with your Section 1256 activity, a common temptation; these trades need to be separated
into Section 988 reporting, and in cases of loss, you could wind up paying more tax than necessary.
As a fast-growing market segment, forex trading is almost certain to come under greater IRS scrutiny in the future. An experienced Traders Accounting tax professional can help you file in full compliance with IRS rules and make the most of your tax advantages.
But when income tax time rolls around, currency traders receive special treatment from the Internal Revenue Service, the subtleties of which can sometimes trip up the unsuspecting.
Here's a look at the tax landscape for forex traders, and why it may be a good idea to have a Traders Accounting tax professional help guide you through the twists and turns.
Futures and Cash Forex
Forex is traded in two ways: as currency futures on regulated commodities exchanges, which fall under the tax rules of IRC Section 1256 contracts, or as cash forex on the unregulated interbank market, which fall under the special rules of IRC Section 988. Many forex traders are active in both markets.
Because futures and cash forex are subject to different tax and accounting rules, it is important for forex traders to know which category each of their trades fall into so that each trade can be reported correctly to receive optimum tax advantage.
Section 1256: The Advantageous Split
Forex traders receive a significant tax advantage over securities traders under Section 1256: reporting capital gains on IRS Form 6781 (Gains and Losses from Section 1256 Contracts and Straddles) allows you to split your capital gains on Schedule D, with 60%
taxed at the lower long-term capital gains rate (currently 15%) and 40% at the ordinary or short-term capital gains rate of up to 35%. That combined rate of 23% amounts to a 12% advantage over the ordinary (or short-term) rate.
If you trade exclusively in forex futures, it's smooth sailing come tax time; your trades fall under Section 1256 and automatically receive the 60/40 split.
But things get a little more complicated tax-wise if you dabble in cash forex, which is subject to Section 988 (Treatment of Certain Foreign Currency Transactions).
Section 988: To Opt Out or Not?
Section 988 was enacted as a way for the IRS to tax companies that earn income from fluctuations in foreign currency exchange rates as part of their normal course of business, such as buying foreign goods. Under this section, such gains or losses are reported and treated as interest income or expense for tax purposes, and do not receive the favorable 60/40 split.
Because forex futures do not trade in actual currencies, they do not fall under the special rules of Section 988. But as a currency trader, you are exposed daily to currency rate fluctuations, hence your trading activity would fall under the Section 988 provisions.
But because currency traders consider these fluctuations part of their capital assets in the normal course of business, the IRS enables you to opt out of Section 988, and thereby retain the favorable 60/40 split for these gains under Section 1256.
The IRS requires that you note "internally" your intention to opt out of Section 988 before making the trades; you are not required to notify the IRS. Obviously, some traders bend this rule based on their year-end outcome, and there seems little inclination on
the part of the IRS to crack down, at least so far.
As a rule of thumb, if you have currency gains, you would benefit (reduce your tax on gains by 12 percent) by opting out of Section 988. If you have losses however, you may prefer to remain under Section 988's ordinary loss treatment rather than the less favorable treatment under Section 1256.
Tax Time: Tougher for Currency Traders
Forex futures traders tend to breeze through tax time; their brokerage firm sends them an IRS Form 1099, on which their aggregate profit or loss is listed on Line 9.
But since currency traders don't receive 1099s, you are left to find your own accounting and software solutions. Don't be tempted to simply lump your currency trades in with your Section 1256 activity, a common temptation; these trades need to be separated
into Section 988 reporting, and in cases of loss, you could wind up paying more tax than necessary.
As a fast-growing market segment, forex trading is almost certain to come under greater IRS scrutiny in the future. An experienced Traders Accounting tax professional can help you file in full compliance with IRS rules and make the most of your tax advantages.
Forex Trading The Relationship between Commodities and the Foreign Exchange Market
Gold and oil in particular have an important relationship with the forex market, and can be used as leading indicators in forex trading. Four major currencies are considered to be the closest tied to commodity prices - the Australian Dollar, the Canadian Dollar, the New Zealand Dollar and the Swiss Franc.
Gold and it's relationship to the Forex Market
While the US is the world's second largest producer of gold, after South Africa, gold normally does not move in line with the US Dollar, rather they tend to have an inverse relationship. This is because during periods of geopolitical uncertainty traders tend to migrate away from the US Dollar and towards gold as a safe haven.
In the world of Forex, no major currency is considered to be as safe and stable as the Swiss Franc. The political neutrality of the Swiss and the fact that 40% of its currency reserves were previously backed by gold underpin the Swiss Franc's image as being a safe haven during periods of uncertainty. For these reasons the CHF/USD has a strong positive correlation with gold prices.
The AUD/USD, NZD/USD, USD/CHF currency pairs tend to trade in line with gold the closest, due to the other currency having close political and natural ties to gold.
Oil and it's relationship to the Forex Market
Canada's total crude oil reserves stand in second place behind Saudi Arabia. The Canadian Dollar is the currency most influenced by rising oil prices- if oil prices rise the CAD is likely to closely follow. Rising oil prices benefit the Canadian economy as it takes in more money for oil and raises profits for domestic oil companies. The US imports 85% of Canada's oil exports. Rising oil prices have in part caused the Canadian dollar to rise to a 28 year high against the US dollar.
Gold and it's relationship to the Forex Market
While the US is the world's second largest producer of gold, after South Africa, gold normally does not move in line with the US Dollar, rather they tend to have an inverse relationship. This is because during periods of geopolitical uncertainty traders tend to migrate away from the US Dollar and towards gold as a safe haven.
In the world of Forex, no major currency is considered to be as safe and stable as the Swiss Franc. The political neutrality of the Swiss and the fact that 40% of its currency reserves were previously backed by gold underpin the Swiss Franc's image as being a safe haven during periods of uncertainty. For these reasons the CHF/USD has a strong positive correlation with gold prices.
The AUD/USD, NZD/USD, USD/CHF currency pairs tend to trade in line with gold the closest, due to the other currency having close political and natural ties to gold.
Oil and it's relationship to the Forex Market
Canada's total crude oil reserves stand in second place behind Saudi Arabia. The Canadian Dollar is the currency most influenced by rising oil prices- if oil prices rise the CAD is likely to closely follow. Rising oil prices benefit the Canadian economy as it takes in more money for oil and raises profits for domestic oil companies. The US imports 85% of Canada's oil exports. Rising oil prices have in part caused the Canadian dollar to rise to a 28 year high against the US dollar.
Forex Trading Understanding Forex Quotes
Reading a foreign exchange quote may seem a bit confusing at first. However, it's really quite simple if you remember two things: 1) The first currency listed first is the base currency and 2) the value of the base currency is always 1.
The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 110.01 means that one U.S. dollar is equal to 110.01 Japanese yen.
When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote we previously mentioned increases to 113.01, the dollar is stronger because it will now buy more yen than before.
The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.7366, meaning that one British pound equals 1.7366 U.S. dollars.
In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.
In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.
Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.
When trading forex you will often see a two-sided quote, consisting of a 'bid' and 'offer'. The 'bid' is the price at which you can sell the base currency (at the same time buying the counter currency). The 'ask' is the price at which you can buy the base currency (at the same time selling the counter currency).
The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 110.01 means that one U.S. dollar is equal to 110.01 Japanese yen.
When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote we previously mentioned increases to 113.01, the dollar is stronger because it will now buy more yen than before.
The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.7366, meaning that one British pound equals 1.7366 U.S. dollars.
In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.
In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.
Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.
When trading forex you will often see a two-sided quote, consisting of a 'bid' and 'offer'. The 'bid' is the price at which you can sell the base currency (at the same time buying the counter currency). The 'ask' is the price at which you can buy the base currency (at the same time selling the counter currency).
The Risks of Trading in the Forex Market
Although every investment involves some risk, the risk of loss in trading off-exchange forex contracts can be substantial. Therefore,if you are considering participating in this market, you should understand some of the risks associated with this product so you can make an informed decision before investing. As stated in the introduction to article, off-exchange foreign currency trading carries a high level of risk and may not be suitable for all customers. The only funds that should ever be used to speculate in foreign currency trading, or any type of highly speculative investment, are funds that represent risk capital – i.e., funds you can afford to lose without affecting your financial situation. There are other reasons why forex trading may or may not be an appropriate investment for you, and they are highlighted below.The market could move against you. No one can predict with certainty which way exchange rates will go, and the forex market is volatile. Fluctuations in the foreign exchange rate between the time you place the trade and the time you close it out will affect the price of your forex contract and the potential profit and losses relating to it. You could lose your entire investment You will be required to deposit an amount of money (often referred to as a “security deposit” or “margin”) with your forex dealer inorder to buy or sell an off-exchange forex contract. As discussed earlier, a relatively small amount of money can enable you to hold a forex position worth many times the account value. This is referred to as leverage or gearing. The smaller the deposit in relation to the underlying value of the contract, the greater the leverage. If the price moves in an unfavorable direction, high leverage can produce large losses in relation to your initial deposit. In fact, even a small move against your position may result in a large loss, including the loss of your entire deposit. Depending on your agreement with your dealer, you may also be required to pay additional losses. You are relying on the dealer’s creditworthiness and reputation. Retail off-exchange forex trades are not guaranteed by a clearing organization. Furthermore, funds that you have deposited to trade forex contracts are not insured and do not receive a priority in bankruptcy. Even customer funds deposited by a dealer inan FDIC-insured bank account are not protected if the dealer goes bankrupt.There is no central marketplace Unlike regulated futures exchanges, in the retail off-exchange forex market there is no central marketplace with many buyers and sellers. The forex dealer determines the execution price, so you are relying on the dealer’s integrity for a fair price. The trading system could break down If you are using an Internet-based or other electronic system to place trades, some part of the system could fail. In the event of a system failure, it is possible that, for a certain time period, you may not be able to enter new orders, execute existing orders, or modify or cancel orders that were previously entered. A system failure may also result in loss of orders or order priority. You could be a victim of fraud. As with any investment, you should protect yourself from fraud. Beware of investment schemes that promise significant returns with little risk. You should take a close and cautious look at the investment offer itself and continue to monitor any investment you do make.
Forex Trading Forex Trading Regulation
Other Issues to Consider
In addition to understanding how the off-exchange forex market works and some of the risks associated with this product, there are other unique features about the market that you need to understand before you decide whether to invest in this market and which dealer to use.
Who regulates off-exchange foreign currency trading?
The CFTC has some regulatory authority over retail off-exchange forex markets. The Commodity Exchange Act (CEA) allows the sale of OTC forex futures and options to retail customers if, and only if, the counterparty (the person on the other side of the transaction) is a regulated entity. These regulated entities include the following: financial institutions, such as banks and savings associations, registered broker-dealers and certain of their affiliates, registered futures commission merchants (FCMs) and certain of their affiliates, certain insurance companies and their regulated affiliatess financial holding companies, and investment bank holding companies. Under the CEA, the CFTC has the authority to shut down any unregulated entity that acts as a counterparty to forex futures oroptions transactions with retail customers. The CFTC also has the authority to take action against registered FCMs and their affiliates for violating the anti-fraud and anti-manipulation pro-visions of the CEA in connection with OTC forex transactionsinvolving retail customers, but the CFTC cannot adopt rules toregulate these transactions. NFA has rules to protect customers in the retail off-exchange forex market. As mentioned later in this article, firms that introduce customers to forex dealers do not have to be regulated enti-ties. NFA’s rules provide, among other things, that a forex dealer FCM must take responsibility for the activities of unregulated entities that solicit retail customers. Additionally, NFA’s rules require forex dealer FCMs to: observe high standards of commercial honor and just and equitable principles of trade in connection with the retail forex business; supervise their employees and agents and any affiliates that act as counterparties to retail forex transactions; maintain a minimum net capital requirement based on the value of open customer positions; and collect security deposits from those customers. NFA’s forex rules do not apply to all FCMs and their affiliates, however. Therefore, you should ask the dealer if NFA regulates its forex activities.
In addition to understanding how the off-exchange forex market works and some of the risks associated with this product, there are other unique features about the market that you need to understand before you decide whether to invest in this market and which dealer to use.
Who regulates off-exchange foreign currency trading?
The CFTC has some regulatory authority over retail off-exchange forex markets. The Commodity Exchange Act (CEA) allows the sale of OTC forex futures and options to retail customers if, and only if, the counterparty (the person on the other side of the transaction) is a regulated entity. These regulated entities include the following: financial institutions, such as banks and savings associations, registered broker-dealers and certain of their affiliates, registered futures commission merchants (FCMs) and certain of their affiliates, certain insurance companies and their regulated affiliatess financial holding companies, and investment bank holding companies. Under the CEA, the CFTC has the authority to shut down any unregulated entity that acts as a counterparty to forex futures oroptions transactions with retail customers. The CFTC also has the authority to take action against registered FCMs and their affiliates for violating the anti-fraud and anti-manipulation pro-visions of the CEA in connection with OTC forex transactionsinvolving retail customers, but the CFTC cannot adopt rules toregulate these transactions. NFA has rules to protect customers in the retail off-exchange forex market. As mentioned later in this article, firms that introduce customers to forex dealers do not have to be regulated enti-ties. NFA’s rules provide, among other things, that a forex dealer FCM must take responsibility for the activities of unregulated entities that solicit retail customers. Additionally, NFA’s rules require forex dealer FCMs to: observe high standards of commercial honor and just and equitable principles of trade in connection with the retail forex business; supervise their employees and agents and any affiliates that act as counterparties to retail forex transactions; maintain a minimum net capital requirement based on the value of open customer positions; and collect security deposits from those customers. NFA’s forex rules do not apply to all FCMs and their affiliates, however. Therefore, you should ask the dealer if NFA regulates its forex activities.
Forex vs. Equities
If you are interested in trading currencies online, you will find that the Forex market offers several advantages over equities trading.
24-Hour Trading: Forex is a true 24-hour market, which offers a major advantage over equities trading. Whether it's 6pm or 6am, somewhere in the world there are always buyers and sellers actively trading foreign currencies. Traders can always respond to breaking news immediately, and P&L is not affected by after hours earning reports or analyst conference calls.
After hours trading for U.S. equities brings with it several limitations. ECN's (Electronic Communication Networks), also called matching systems, exist to bring together buyers and sellers - when possible. However, there is no guarantee that every trade will be executed, nor at a fair market price. Quite frequently, traders must wait until the market opens the following day in order to receive a tighter spread.
Superior Liquidity: With a daily trading volume that is 50x larger than the New York Stock Exchange, there are always broker/dealers willing to buy or sell currencies in the FX markets. The liquidity of this market, especially that of the major currencies, helps ensure price stability. Traders can almost always open or close a position at a fair market price.
Because of the lower trade volume, investors in the stock market are more vulnerable to liquidity risk, which results in a wider dealing spread or larger price movements in response to any relatively large transaction.
100:1 Leverage: 100:1 leverage is commonly available from online FX dealers, which substantially exceeds the common 2:1 margin offered by equity brokers. At 100:1, traders post $1000 margin for a $100,000 position, or 1%.
While certainly not for everyone, the substantial leverage available from online currency trading firms is a powerful, moneymaking tool. Rather than merely loading up on risk as many people incorrectly assume, leverage is essential in the Forex market. This is because the average daily percentage move of a major currency is less than 1%, whereas a stock can easily have a 10% price move on any given day.
The most effective way to manage the risk associated with margined trading is to diligently follow a disciplined trading style that consistently utilizes stop and limit orders. Devise and adhere to a system where your controls kick in when emotion might otherwise take over.
Lower Transaction Costs: It is much more cost-efficient to trade Forex in terms of both commissions and transaction fees. FOREX.com charges NO commissions or fees whatsoever, while still offering traders access to all relevant market information and trading tools. In contrast, commissions for stock trades range from $7.95-$29.95 per trade with online discount brokers up to $100 or more per trade with full service brokers.
Another important point to consider is the width of the bid/ask spread. Regardless of deal size, forex dealing spreads are normally 3-4 pips (a pip is .0001 US cents) in the major currencies. In general, the width of the spread in a forex transaction is less than 1/10 that of a stock transaction, which could include a .125 (1/8) wide spread.
Profit Potential In Both Rising And Falling Markets: In every open FX position, an investor is long in one currency and short the other. A short position is one in which the trader sells a currency in anticipation that it will depreciate. This means that potential exists in a rising as well as a falling market.
The ability to sell currencies without any limitations is another distinct advantage over equity trading. In the US equity markets, it is much more difficult to establish a short position due to the Zero Uptick rule, which prevents investors from shorting a stock unless the immediately preceding trade was equal to or lower than the price of the short sale.
24-Hour Trading: Forex is a true 24-hour market, which offers a major advantage over equities trading. Whether it's 6pm or 6am, somewhere in the world there are always buyers and sellers actively trading foreign currencies. Traders can always respond to breaking news immediately, and P&L is not affected by after hours earning reports or analyst conference calls.
After hours trading for U.S. equities brings with it several limitations. ECN's (Electronic Communication Networks), also called matching systems, exist to bring together buyers and sellers - when possible. However, there is no guarantee that every trade will be executed, nor at a fair market price. Quite frequently, traders must wait until the market opens the following day in order to receive a tighter spread.
Superior Liquidity: With a daily trading volume that is 50x larger than the New York Stock Exchange, there are always broker/dealers willing to buy or sell currencies in the FX markets. The liquidity of this market, especially that of the major currencies, helps ensure price stability. Traders can almost always open or close a position at a fair market price.
Because of the lower trade volume, investors in the stock market are more vulnerable to liquidity risk, which results in a wider dealing spread or larger price movements in response to any relatively large transaction.
100:1 Leverage: 100:1 leverage is commonly available from online FX dealers, which substantially exceeds the common 2:1 margin offered by equity brokers. At 100:1, traders post $1000 margin for a $100,000 position, or 1%.
While certainly not for everyone, the substantial leverage available from online currency trading firms is a powerful, moneymaking tool. Rather than merely loading up on risk as many people incorrectly assume, leverage is essential in the Forex market. This is because the average daily percentage move of a major currency is less than 1%, whereas a stock can easily have a 10% price move on any given day.
The most effective way to manage the risk associated with margined trading is to diligently follow a disciplined trading style that consistently utilizes stop and limit orders. Devise and adhere to a system where your controls kick in when emotion might otherwise take over.
Lower Transaction Costs: It is much more cost-efficient to trade Forex in terms of both commissions and transaction fees. FOREX.com charges NO commissions or fees whatsoever, while still offering traders access to all relevant market information and trading tools. In contrast, commissions for stock trades range from $7.95-$29.95 per trade with online discount brokers up to $100 or more per trade with full service brokers.
Another important point to consider is the width of the bid/ask spread. Regardless of deal size, forex dealing spreads are normally 3-4 pips (a pip is .0001 US cents) in the major currencies. In general, the width of the spread in a forex transaction is less than 1/10 that of a stock transaction, which could include a .125 (1/8) wide spread.
Profit Potential In Both Rising And Falling Markets: In every open FX position, an investor is long in one currency and short the other. A short position is one in which the trader sells a currency in anticipation that it will depreciate. This means that potential exists in a rising as well as a falling market.
The ability to sell currencies without any limitations is another distinct advantage over equity trading. In the US equity markets, it is much more difficult to establish a short position due to the Zero Uptick rule, which prevents investors from shorting a stock unless the immediately preceding trade was equal to or lower than the price of the short sale.
Wednesday, August 26, 2009
3 Ways to Make Money Trading Forex Using Automated Trading System and Software
Many people love trading FOREX or the foreign exchange market, including me. Being a trader myself, I am always on the look out for an automated trading solution. My love affair for trading FOREX started with simple assumption, that there are many people out there that are using automation to generate money. But logistically, I found it easy to trade these markets after work or when I was free (they are open 24 hrs). I do not have to give up my present job to dabble in it. I just needed help to get started.
In the quest to examine an automated way to make money, I examined many trading systems, and I found two that I liked the most, and one that came close. All the three let you start with very little money, and as you feel more comfortable with your trading, you can add more to it. But more importantly, they take the emotions out, reduce learning curve, and provide a disciplined methodology.
Currency forex Exchange
Foreign-trading
On May 18, 2009 in Trading Currency
Trading Forex Foreign Currency
foreign-trading currency.jpg
Foreign Trading Currency
As the largest and most productive currency exchange market, Forex is the software where a vast mass of Forex trading or foreign currency trading occurs.
In comparison to other security trading, foreign currency trading doesn’t happen on a set exchange currency rate.
Foreign currency trading tactics utilized by traders in order to trade the market might make a huge diversity in their outcome. Forex trading is an exceptionally cutthroat field.
Forex Trading Robots:
Forex Trading is here to stay and will offer us a great opportunity for starting a home based business with the help of a Trading Robot.
Forex Trading is a Great Home Based Business Opportunity for Anyone
How To Start a Home Business With a Forex Trading Robot
You can start a foreign currency trading business at home by following these six easy steps:
Register for a free Demo Account with a foreign trading company and get access to their trading software. They provide an online system that allows you to learn how to make currency trades with different currency pairs (see my other article on Forex Trading to learn more about currency pairs). Most trading companies offer basic training free of cost.
Follow the instructions for loading your Forex Robot on to your trading platform.
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* Tags: converter money, curency convertor, exchange currency rate, foreign trading, forex software, money convertor
Curency Forex
On May 15, 2009 in Trading Currency
Currency forex Exchange
currency-Forex.jpg
Currency Forex
Let us begin with the instruments that are traded in the forex markets. The reason for this is simple; the basis of currency forex trading is to exchange one currency for another.
The most widely traded pairs are the england Pound and the US Dollar (indicated as GBP/USD), the euros rate and the US Dollar (the EUR/USD pair), the Aussie Dollar and the US Dollar (AUD/USD pair), the USD and the Japanese Yen (USD/JPY pair), and the canadian currency Dollar and the USD (USD/CAD pair). These pairs account for well over 80% of the total volume of the trading in the forex market.
First currency is called the base currency, over which the second one is countered to imply the price of the pair, or commonly referred to as the "cross currency".
Second is therefore called the quote currency and the pair price is recorded in terms of the units of the quote currency required to buy one unit of the base currency.
The bid price is the exchange currency rate at which your forex broker bids to buy the currency at, while the ask price is the rate the forex broker is asking to sell the currency to the forex trader. The bid price will always be less than the ask price and the forex trader will buy at the ask price and sell at the bid price.
Trading with an Auto Forex System for Faster Profits
Auto forex system trading is the perfect strategy for investors or brokers who either do not have time to watch the market closely or trying to diversify the portfolio.
FOR IMMEDIATE RELEASE
PRLog (Press Release) – Apr 29, 2008 – Fl, USA, ...............Auto forex system trading is the perfect strategy for investors or brokers who either do not have time to watch the market closely or trying to diversify the portfolio. It is like having a professional to trade your account for you, taking care of your profits.
Automated systems replace the need for manually buying or selling the currencies. With auto forex system trading, you can continue to focus on your own trading strategies and can take benefits of other strategies as well.
Forex system trading can be of different types. The systems are based on software and algorithms to generate trading signals. Different automated trading platforms use varied software to generate the trading signals. You can run the system from your own desktop or can leave the trading completely to professionals through your managed accounts.
The system is configured to automatically open and close positions at specified parameters. As the forex markets in different countries operate in different time zones, the trading practically continues round the clock. With a managed account in your auto forex system trading, whenever a trade signal is generated, your order will be placed into your account while you are away working or sleeping.
Automated forex system trading is free of the traders' emotion. As the operations are strictly software driven, you need to concentrate on the strategic decisions, which will be executed automatically. As the automated trading platforms have proper risk management features, your trades will be secured and safe.
Many online brokers offer trading platforms for free. You can download the system in your desktop. For a subscription or with the spread, the online broker can manage your investment.
If you purchase an automated forex trading system, the vendor may offer you free trading alert services when you can receive signals whenever a trade is identified. In many trading platforms, your order can be placed automatically, whenever a signal is generated and, therefore, you never miss a trading opportunity and save your time as well.
To take the maximum advantage of the system, you need planning and self-preparation. Always determine beforehand how much of your trading capital you will risk. Work on a demo account for few months before choosing the platform.
An excellent auto forex software has been launched by Marcus Leary which has made the forex trading a breeze. For more details about this amazing software visit his website at http://auto-forex-software.articalz.com
FOR IMMEDIATE RELEASE
PRLog (Press Release) – Apr 29, 2008 – Fl, USA, ...............Auto forex system trading is the perfect strategy for investors or brokers who either do not have time to watch the market closely or trying to diversify the portfolio. It is like having a professional to trade your account for you, taking care of your profits.
Automated systems replace the need for manually buying or selling the currencies. With auto forex system trading, you can continue to focus on your own trading strategies and can take benefits of other strategies as well.
Forex system trading can be of different types. The systems are based on software and algorithms to generate trading signals. Different automated trading platforms use varied software to generate the trading signals. You can run the system from your own desktop or can leave the trading completely to professionals through your managed accounts.
The system is configured to automatically open and close positions at specified parameters. As the forex markets in different countries operate in different time zones, the trading practically continues round the clock. With a managed account in your auto forex system trading, whenever a trade signal is generated, your order will be placed into your account while you are away working or sleeping.
Automated forex system trading is free of the traders' emotion. As the operations are strictly software driven, you need to concentrate on the strategic decisions, which will be executed automatically. As the automated trading platforms have proper risk management features, your trades will be secured and safe.
Many online brokers offer trading platforms for free. You can download the system in your desktop. For a subscription or with the spread, the online broker can manage your investment.
If you purchase an automated forex trading system, the vendor may offer you free trading alert services when you can receive signals whenever a trade is identified. In many trading platforms, your order can be placed automatically, whenever a signal is generated and, therefore, you never miss a trading opportunity and save your time as well.
To take the maximum advantage of the system, you need planning and self-preparation. Always determine beforehand how much of your trading capital you will risk. Work on a demo account for few months before choosing the platform.
An excellent auto forex software has been launched by Marcus Leary which has made the forex trading a breeze. For more details about this amazing software visit his website at http://auto-forex-software.articalz.com
Forex: USD/CHF trades above 1.0700 and posts 1.0714 as 1-week high
FXstreet.com (Barcelona) – The Dollar has extended its rally against the Swissy bringing the pair to trade above the 1.0700 level and post 1.0714 as fresh 1-week high. Since the beginning of the European session, USD/CHF has risen around 130 pips from 1.0582, intra-day low, to break the MA200 level at 1.0675 and post 1-week high.
Valeria Bednarik, FXstreet.com collaborator, comments: “USD/CHF regained the upside after forming a triple floor at the 1.0550 area. Quoting around 1.0700, rally also seems overextended, and longing for a downside correction, that could reach the 1.0650 area without harming current trend. Above 1.0730, expect the pair to extend the rally despite over bought conditions.”
Valeria Bednarik, FXstreet.com collaborator, comments: “USD/CHF regained the upside after forming a triple floor at the 1.0550 area. Quoting around 1.0700, rally also seems overextended, and longing for a downside correction, that could reach the 1.0650 area without harming current trend. Above 1.0730, expect the pair to extend the rally despite over bought conditions.”
Latest FAP Turbo Forex Trading System news - Auto Forex Trading, FAP Turbo
I’ve had some time to do some reading lately and I’ve managed to come across a few really interesting posts that I thought I’d let everyone know about. Check em out and let me know your thoughts on some of the topics they talked about within -
Auto Forex Trading, FAP Turbo - Prevents You to Lose Money …
Most auto forex trading robot only give backtesting results, but Fap Turbo is only one that provide live trading results. 4. Its winning rate is 95.9% and its drawdown is 0.35%, while nearly all of these systems have a 10%-20% drawdown. … Read More…
Fap Turbo review/download | Mysupergenie Forex Trading Resource
Just download FAP Turbo and start easy installer and watch the money roll in. The combination of small profits at regular intervals is the secret behind FAP Turbo forex trading software. FAP turbo catches the pulse of the market. … Read More…
FAP Turbo Review
Considering the huge evidence and the impressive trading figures the FAP Turbo Forex Robot has been delivering for almost 10 years now, it is difficult to turn a blind eye to such a powerful and automated trading system. … Read More…
Hope you enjoy the read as much as I did and please if you have something to say, use the comments form below to let everyone know your thoughts.
Have a great day!
CLICK HERE For Additional Information On Our Most Highly Recommended Of All The Forex Trading Systems That We Have Tested And That Works On Complete Auto Pilot For The Ultimate In Forex Trading Profits.
Auto Forex Trading, FAP Turbo - Prevents You to Lose Money …
Most auto forex trading robot only give backtesting results, but Fap Turbo is only one that provide live trading results. 4. Its winning rate is 95.9% and its drawdown is 0.35%, while nearly all of these systems have a 10%-20% drawdown. … Read More…
Fap Turbo review/download | Mysupergenie Forex Trading Resource
Just download FAP Turbo and start easy installer and watch the money roll in. The combination of small profits at regular intervals is the secret behind FAP Turbo forex trading software. FAP turbo catches the pulse of the market. … Read More…
FAP Turbo Review
Considering the huge evidence and the impressive trading figures the FAP Turbo Forex Robot has been delivering for almost 10 years now, it is difficult to turn a blind eye to such a powerful and automated trading system. … Read More…
Hope you enjoy the read as much as I did and please if you have something to say, use the comments form below to let everyone know your thoughts.
Have a great day!
CLICK HERE For Additional Information On Our Most Highly Recommended Of All The Forex Trading Systems That We Have Tested And That Works On Complete Auto Pilot For The Ultimate In Forex Trading Profits.
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This EA is the latest thoroughbred in their line of high end automated systems. Beginning with Forex ProfitPro AutoTrader, which automated buy, sell, stop, target and exit order execution. Through to Gomega TraderFX with included a plethora of advanced analysis components with even more push and play technology for deeper market analysis, advance strategies, profit targets and risk management. Now Quantum Research are bringing us Gomega Xray. This expert advisor represents the latest thoroughbred in their line of high end automated expert advisors. From Forex Profit Pro AutoTrader which automated buy, sell, stop, target and exit order execution. Through to Gomega TraderFX array of sophisticated analytical features and even more push button technology and deeper market analysis, advance strategies, profit targets and risk management. Now Quantum Reasearch are bringing us Gomega Xray.
GOmega Xray differs from earlier versions in several distinct ways:
1) Xray is not a get rich quick robot but rather employs a get rich slowly approach. Xray was created to make slow, but steady gains employing a loose stop loss, smaller position size, and higher Reward/Risk ratio. In this way, it’s a bit like buying options. You know your risk and your potential return ahead of time, even though you must wait for the profits to materialize.
2) In addition to a Profit Target, Xray includes a reward to risk calculation.
3) With Xray, your profit goal and reward/risk ratio are built into Xray’s algorithm that calculates position size.
Take a $5,000 account, risking 1% of the balance, 300-pip profit target, R/R ratio 3.5:1 yields an 86-pip stop loss and a position size of .06 lots automatically calculated.
4) Xray calculates the comparative strength of both currencies against all crosses of both currencies in the pair you are trading, and filters values according to this information.
5) Xray measures volatility in two distinct ways, combining standard deviation and average true range into the Market Pulse indicator, to isolate areas of the market where action is heating up and trends may be in motion.
6) Xray distinguishes between "random" market movement and trending movement through its proprietary Randomness Indicator.
7) Automatic scaling out - when a predefined percentage of the profit target is attained, Xray will liquidate 50% of the trade’s position size.
8) Xray has less parameters. Most are limited in range or fixed.
9) Xray can be traded 24/7
10) An optional trailing stop loss is included among Xray’s strategies.
These components when combined make Xray an awesome trading EA.
Friday, August 21, 2009
Trading Profit Booster
Forex-Trading-Profit-Booster
That’s when I decided that the best thing I could possibly do is let the world know how to really make money with the Forex marketplace.
So, I sat down and created a manual to show people exactly how to make profitable trades on the Forex marketplace. Then, I went online and found a programmer who helped me create trading software that would automate the system.
I decided to call this Forex package, The Trading Profit Booster because it provides combination to unlocking the Forex market’s profit potential!
Trading Profit Booster makes it easy for everyday people to make money trading on the Forex market. Unlike other systems, it is a complete package.
You will receive an easy-to-understand trading manual that will help you quickly learn the ins and outs of the Forex market – so you can start making profitable trades.
You’ll also receive special Forex software that allows you to make trades automatically – even while you are sleeping! That means you, too can wake up with more money than when you went to bed!
Most other systems provide only the manual, which means you have to spend a lot of time working out your own trades. Some systems simply give you the software – but don’t provide you with any real control or understanding of the marketplace.
Either way, you end up either wasting a lot of your time, or else trusting your future to a machine.
The Trading Profit Booster is different. It is an all-in-one system that allows you to take control of your destiny while automating many of your trades.
That way you can trade on the Forex marketplace with confidence – without wasting hours of your precious time.
World Forex Annouces the Beginning of New Mentor Classes
Will Robots venture into commodity trading?
Commodity Online A new breed of Forex robot , Forex Conquerer was launched on April 22. The company, Forex Trading System says the system has been devised by Brad Cullen, …
The Forex Trading Institute Launches New Forex Training Web Portal …
Emediawire The newly designed training portal launch is just one of the ways that The Forex Trading Institute is upgrading and improving their systems for delivering …
Ideal World Forex, a full service foreign exchange broker, announces that it will begin conducting daily “Mentor Classes” on Forex trading techniques and methodology starting in May 2009. With the long term goal of helping to improve client’s trading skills, Ideal World Forex has implemented a unique teaching program. Starting this month, Ideal World Forex will conduct daily mentor classes designed to cover basic trading concepts, explain specific indicators/trading tools and strengthen students’ techniques while trading the Forex market.
The first class is scheduled for May 4th, 2009 at 12pm Eastern Standard Time. Ideal World Forex has arranged to provide its clients an exclusive daily class session lasting for approximately one hour. Topics will range from theory and technique to covering real-time strategy, risk/money management principles and live trading examples. The emphasis of the class is to provide new traders a forum for “open source” teaching on the most important Forex issues. Students will get to see the application of core trading methods on real time situations in an effort to clarify problems, augment students’ knowledge and ultimately increase trader confidence.
The classes will be daily but will also include separate one-on-one personal training as well. Once enrolled in the mentor classes, each student will also be eligible for individual training sessions. Traders will have the option of gaining important personal training on an individual basis from a highly qualified mentor/teacher in addition to the daily class sessions. Those interested in signing up for the new “Mentor Program” can contact staff at info@idealworldforex.com.
This unique opportunity is part of the comprehensive Forex environment Ideal World Forex is creating for its clients. Recently affiliated with GCI Financial, Ideal World Forex can offer individual traders significant market expertise, daily mentoring classes, abundant physical resource(s) and financial strength as well as access to an institutional trading platform, powerful real-time Forex charts, professional market research and a suite of advanced Forex trading tools.
Wednesday, August 19, 2009
World Currency Market...How you could Make use of it
Basic Tips & ideas on : World Currency Market and it's future in the Forex Trading
Trading takes place in New York, Frankfurt, London, Tokyo and Sydney at all hours. Forex trading or foreign exchange currency trading involves selling one currency to buy another. Some of the most commonly traded currency pairs are USD-CHF (US Dollar / Swiss Franc), EUR-USD (Euro / US Dollar), USD-JPY (US Dollar / Japan Yen), and GBP-USD (British Pound / US Dollar).
The main Trading centers of the forex currency market are New York, London, Frankfurt, Tokyo, and Sydney. They are located in different time zones. So, this makes the forex market trade 24 hours a day.
There is no central exchange or location where the trading is conducted, and most trades are executed between two interested parties who use the phone or other electronic means to communicate. The main market for forex currency trading is the inter-bank market, in which banks, insurance companies, corporations and other large institutions trade to manage the risks associated with fluctuations in foreign exchange rates.
Currency Trading and the Benefits of Fx Trading
Currency trading is no longer reserved for large institutions. Anyone can learn how to trade forex, and do it from anywhere. Individuals can trade in the forex market from their homes by means of a high speed Internet connection.
To be successful, it is essential to have access to up to date information about the latest changes and trends in the forex market. You can sign up to get our Forex Trade Signals via e-mail, SMS. Please see our 'Trade Forex' FAQ Page for futher details.
forex trading
Our forex signals will suggest buying and selling points, along with price targets, and stop-loss levels. You can plan your trades accordingly, and can even arrange to have trades automatically executed in your account by means of our Auto Trade Service. Please do not hesitate to contact us using our contact form to request more info.
Have a Trading Plan FX Trading Brokers Do!
Currency trading can be a highly lucrative business but it also involves a lot of risk. It is best to seek the advice of an independent financial advisor before you get into it. Don’t trade forex with money that you cannot afford to lose. It is best to practice trading by opening a free demo account before you start investing your own money.
Is FAP Turbo Any Different To Forex Auto Pilot System?
There has been a lot of confusion about the differences between forex autopilot system and FAP turbo. Are they the same product – or completely different? I guess you could say that FAP turbo systemis in a sense the sequel to forex autopilot system – a new and improved version. But there are also some pretty fundamental differences which you should be aware of. I am hoping this article will help you decide whether it is the best choice for you.
Why Create FAP Turbo?
FAP Turbo was created by 3 Graduate IT Students by the name of Steve, Ulrich and Mike. They were challenged to pull forex auto pilot system apart and make improvements. I think this story is a little far fetched personally – would he really handover his hard earned secrets to 3 graduate IT students. The bottom line is that with any currency trading product the product creator is in it for the money – you need to decide on whether there is true value in the product.
What Were The Failings Of Forex AutoPilot
All in all forex autopilot was more effective in the hands of an experienced trader. You really needed to be able to toggle the stop/loss setting – and to understand how to do this effectively. Furthermore there were quite a few complaints surrounding the customer support and issuing of refunds. A major flaw of FAPS was that it was marketed heavily towards inexperienced traders – who were never going to have the knowledge required to get the most out of it.
What Are The Positivies Of FAP Turbo?
To continue my FAP Turbo Review – Where to begin? Firstly they have built a proprietary stop/loss system which almost ensures you don’t lose significant amounts of your profits. Furthermore the robot has the proprietary ’stealth mode’ which basically masks your take profit/stop loss settings. This ensures no-one takes advantage of your success. Further to this there is great flexibility with the ability to trade on different currency pairs and different trading strategies. You the user will get the benefits of an automated system yet retain the flexibility needed to succeed.
Conclusion
It should not matter which forex trading system you decide on – you need to have a firm grasp on the basics of forex as there is no such thing as a foolproof system – although at 95% accurate FAP Turbo does come close. Make sure you trade on a demo account first, so that you can see the system in action.
Want to supercharge your trading profits with FAP Turbo today?
Please visit:
http://www.forextradingsoftwarereview.com/FAP_Turbo.html
Forex Auto Trader
orex Auto Trader
It is every man (and woman’s) dream come true to see money flowing through into their bank account day after day, and that too without lifting a finger!
But does a system like that really exist?
According to financial experts from all around the world, irrespective of the kind of economy we are going through, irrespective of your education, and irrespective of where you are from, the best way to make regular income across borders seems to be Forex trading. But if you look to trade on your own, the sheer amount of information you need to process and speculation you need to make will make the whole process a nightmare!
To make the process easier and more fool proof, there have been numerous kinds of forex auto traders that have been made by several people. With time however, several of them have fizzled out due to a lack of vision from the makers. If you are looking to seriously trade in forex, you need to have an automatic system in place, but make sure that you have one which is capable of handling the tremendous amounts of information which need to be analyzed in order to give you accurate advice.
Some of the new auto traders do just that – they crunch more than numbers – and they manage to deliver astounding results. Many of the ‘wise’ traders on autotrade have declared that they made more than double their invested amounts in under a month. But when an under-informed person over-trades, it is bound to lead to misery and money loss! Ensure that you are compatible with the auto trader, and you will do well.
And remember, an auto trader is not a replacement for your involvement. Learn the ropes, and the process will become much more fun (and profitable too!).
Choosing the Right Automated Forex Trading Software
Automated forex trading has a few advantages of its own. Here all you have to do is follow trade signals that are generated and if you are able to execute them with discipline and if your system is logical, then you can easily pile up gains. Before looking at the various ways you can gain profit through these software, let’s take a look at what not to do. Many traders find forex robots online and buy them. But you must keep in mind that most of these are pieces of junk and have never been traded in real time. Take a look at the track record and then at the disclaimer. It is probably hypothetical or stimulated and that is no sure indication of future results. It is strange how some one can just take a test and claim to make money with it. Of course, they do make money for the vendor, they get the sale of the software and the trader gets spanked in the market. No one gets 100k annual income for a hundred bucks. You will never make any money with these stimulated systems so try and steer clear of them. Let’s now take a look at how automated forex trading is done in the proper way and discuss the options. Buy a system with a track record that has been audited over two years. These may not be cheap but they can pay for themselves many times over. You only make sure that you understand and agree with the logic before you begin to use it. Try the free systems. Look up our other articles to know more about them and you will realize why this is a great place to begin your automated forex trading career. Go ahead and build your own. This is easier than it sounds. It is also a better way of trading because if you build and customize the system, you will gain more confidence and you will be able to trade with discipline, even during periods of loss. If you do decide to build yourself a system, we have it covered in our articles. But the best way to go is to trade breakouts, to new highs or lows, have momentum indicators to time your moves nd focus on long term trends. The simpler it is the better. This will enable it to face the ever changing market condition. Packing it with too many indicators might break it down. Once you are in possession of a system, get hold of a forex software package, program the rules and you are all set. Keep in mind that all forex trading systems, including the best ones will suffer losses that can continue for a long period of time. You need to continue trading until you hit a home run and because of this discipline and money management is necessary. If your system does between 50-100% compounded annually, you are a part of the best automated forex trading software and you can trade markets and enjoy currency trading success.
The Advantages of Automated Forex Trading
Forex trading is nowadays the preferred form of investment for an increasing number of people these days. It is apparent why this is so. As the largest trading market in the world, the Forex market has a steadily growing trading volume, which has risen from around $500 billion to about $2 trillion in the last twenty years. Additionally, since it is not tied to any particular trading floor, it is an unusually liquid market. Operating around the clock also makes it a permanently open market. Thus, since many markets are opening and closing at the same time, one can effectively follow the markets around the world. Both big and small traders are thus being attracted to Forex trading. They enjoy a wide choice of trading strategies based on the various aspects of the foreign exchange rates. Many traders coming into the market find the different things that affect currency exchange rates very attractive for a very simple reason – they can use a wide range to tools when working in this exciting and stimulating market. Automation is perhaps the greatest influence today on the future growth of the Forex market, as it brings with it more advantages than disadvantages. Manual systems trying to operate in a fast paced and volatile environment bring with them several losses. A simple time delay in buying and selling may cause a row of losses in a manual system and thus cause the trader immense frustration. Automated Forex trading allows trade to be conducted anywhere in the world, in real time, and eliminates the losses seen in manual systems. Operating in a wide range of different currency markets at the same time, without worrying about the time zones of the places concerned, is another advantage that automated Forex trading brings. Sitting in New York at 2 o’clock in the morning, one can conduct business with traders in different countries on the other side of the globe, simultaneously and with great ease. All thanks to automated Forex trading. Risk management is often a source of worry for traders, but even this is reduced with automated Forex trading. Payments can now be synchronized in real time and this leaves traders satisfied, as opposed to manual trading where there is always uncertainty about payment being made after completion of trade. The automated trading system is developing progressively, and that brings with it hopes that the settlement system will be updated and markets risks will soon cease to exist. If there is one technology that has advanced by leaps and bounds over the past few years, it is computer technology. Indeed, one hopes that it will continue to grow for many years to come. Most importantly, advances in computer technology spell good for traders who wish to access the best Forex automated trading. Access to technology easily and cheaply from the comfort of the traders’ homes means they can manage their own investments with ease. Automated Forex day trading will thus come as a welcome addition to a fully empowered investment vehicle for those in the currency-trading world.
Calculating Interest on Forex Trades
One of the best things about Forex trading is the fact that one can trade using leverage, thus borrowing as much as 1,000 times your capital in order to make a trade. However, borrowing money for trading in foreign exchange is the same as borrowing it for other purposes—interest must be paid on the loan. However, as currency trading involves both buying and selling, the interest due on your loan can be offset by the interest earned on the currency you buy. Before going on to particular examples, let us take a look at interest rates in general, to see how the foreign exchange market is affected by it. In central banks, interest rates are set in accordance with a country’s monetary policy—high interest rates make the currency more expensive to buy and lower interest rates make it less so. Imagining the government of a country with high inflation will help you understand how interest rates are used. The government, because of rapidly rising prices, might decide to raise interest rates. This would increase the cost of the country’s currency, and make demand and consumption fall, as borrowing would be more expensive. This in turn would cause prices to fall and inflation rates would come down. Similarly, a country undergoing recession might lower interest rates to boost the country’s economy, as lower price of currency would cause demand, and, therefore, supply, to increase. Interest rates set by central banks also determine at what rate commercial banks can borrow from governments and lend to their customers, including forex traders. Which tells us how interest rates affect this trade. A trader who, for example buys GBP/USD, needs to borrow the Dollars to buy the Pounds and will, thus, pay interest on the USD and earn it on the GBP. If the interest rate the Bank of England sets for the UK Pound is higher than the one set by the Federal Reserve for the US Dollar, the trader will earn more on the UK Pounds he bought than he pays on the US Dollars he borrowed, thus making a profit.
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However, unless there is a significant difference between the two interest rates, the net profit or loss will be marginal. Besides, while interest rates are set on an annual basis, trading positions are usually opened for short periods. This serves to significantly lower any gain or loss on interest rates.
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However, unless there is a significant difference between the two interest rates, the net profit or loss will be marginal. Besides, while interest rates are set on an annual basis, trading positions are usually opened for short periods. This serves to significantly lower any gain or loss on interest rates.
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