Create Your Own FOREX Trading System In 5 Easy Steps

Create Your Own FOREX Trading System In 5 Easy Steps

by Yusoff Allian

A quick search on your favorite internet search engine for the phrase "FOREX trading system" will yield thousands of results, all of which will try to convince you that theirs is the only sure-fire profit making system available. The truth of the matter is that yes, some or most can make you money, but you don't need to pay someone else to teach you something that's really pretty simple to create for yourself. At its core your FOREX trading system needs to be able to spot trends early and also be able to avoid sharp rises or falls due to a particularly volatile market. At first glance this may seem like a difficult thing to accomplish and to be honest no FOREX trading system will perform both functions flawlessly 100% of the time. However, what we can do is design a trading system that works for the vast majority of the time - this is what we'll focus on when designing our own FOREX trading system. So, what elements do we need to consider for our custom system? The most important criteria are as follows:

1. What kind of trader are you? Do you like to follow long trends, or are you glued to your charts for 8 hours straight per day? If you're new to FOREX trading it's suggested that you stick to long term trading as it's far easier to spot trends and cut your losses when compared to day trading.

2. Find an indicator you're comfortable with. Knowing when to buy is key to generating big profits, so it's important to understand some of the key indicators and how they can identify trends. Moving averages are probably the easiest indicators to work with and can be very useful in recognizing emerging trends. A common tactic is to use two moving averages, one slow and one fast, and wait for the fast average to pass above or below the slow average. This is commonly known as the moving average crossover technique. As with everything else in our FOREX trading system it's simple, easy to understand, and effective.

3. Risk Management. Successful FOREX traders understand that you *will* lose money at some point or another, no matter how effective your FOREX trading system is. You will always want to use a stop-loss on all your trades, but the amount risked will vary from person to person based on their experience and available capital. Knowing where to set your stop loss can be tricky - you want to limit how much you could possibly lose so you'd be tempted to set a very small range, but at the same time you want to allow for short term rises and falls so that you don't exit your position too early.

4. Know when to get out. Knowing when to exit a trade can be just as tricky as knowing when to enter, but for your custom FOREX trading system you want to pick one way that you're comfortable with and just stick with it. One simple technique is called the 'trailing stop' technique, and all this entails is updating your stop loss as your position increases in value. Another popular method used in many FOREX trading systems is to set a target and get out when that target is reached. This can be based on support or resistance, or simply based on a certain number of pips. Find a method you're comfortable with and stick with it.

5. Test your FOREX trading system. So you now have a trading system that tells you when to enter and exit a trade, so see how it performs using real data. Find historical data for a currency you've thought about trading, and analyze the charts. Apply your FOREX trading system to the data you see in the charts and write down the results. Was the system effective? Would you have turned a profit or a loss? Try your trading system on several different charts and record the results. If you've got a winning system then it's time to move onto live data via a demo account. Practice makes perfect and you don't want to risk real money until you're confident your FOREX trading system can provide you with decent profits over time.

Forex Day Trading - The Most Important Fact You Need to Know

Forex Day Trading - The Most Important Fact You Need to Know

by kelly Price

If you are considering forex day trading, there is one fact you need to know above all others and its enclosed in this article.

The fact is that if you try it the odds are you will lose your money and lose it quickly.

Why?

Because all volatility within such a short space as a day is random and support and resistance levels are meaningless and you will may as well flip a coin. Of course if you think about it its obvious why:

You have millions of traders trading trillions of dollars each day and this mass of people and what they do cannot be measured in such a short time span as a day or less.

You will see a lot of day trading systems on the net and they all claim to make money - but there is a problem - none of them do, because none of them have been traded.

They all produce a track record in hindsight knowing the closing prices!

Well that's hard - if we all knew tomorrows price today we would all be rich but forex trading is not that simple. Whenever you see a day trading or forex scalping system with a track record look at the disclaimer and you will normally see the one below or a similar one:

"cftc rule 4.41 - hypothetical or simulated performance results have certain limitations. unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

Of course if you put this disclaimer on you can say anything you like and many vendors do. They know the system wont make money (that's why they have the good sense to not trade it themselves) better to sell it and make a guaranteed income by appealing to naive and greedy investors.

Day trading is a good story but that's all it is and it doesn't work in practice. I quite like Harry Potter as a story but I don't think I can fly!

If you want to make money in forex trading understand one key point:

You need to use data that allows you to calculate the odds and that means swing trading or long term trend following - where the data can be used to help you time your trading signal and enjoy long term currency trading success.

If you want to day trade the odds are not on your side and you will lose and if you don't believe me try and find a day trading system with a track record audited of trades and profit and loss and you simply won't get one

Business forex online trading

Business forex online trading

by Nick Schultz

Foreign exchange is where people from various countries trade in currency belonging to other countries. This is similar to stock trading but very different from it as well in the sense that there are no specific office or clearing houses where money is traded and rates are fixed. If a person has been working for a couple of years, he would have saved up enough for the future and might want to invest the rest. Among the top options for investment, of which forex trading is one, the business forex online trading is today has made life so much more effortless for all involved. Through the online medium, people can get in touch with traders in other parts of the world, in a country of their choice and place their orders. Today there are many who carry out Forex as a business and not just as an investment venue. They help other prospective investors make the right choice and help them in trading on forex. Not only do they provide assistance to new investors, but they themselves invest in the foreign exchange using a lot of analysis and data.

The business forex online trading is where the investor plans ahead of time, and decides on a strategy before making the investment. The forex industry is said to be the most volatile but the most liquid of the investment venues available to companies. While carrying out online trading, the investors also have the flexibility to speed up the process by sending across emails within minutes of receiving updates on the currency rates. Or they might be tracking the market trend and if they feel the timing is right, they can make the purchase right away. They even have Java based platforms through which investors can keep track of all their investments and get regular updates. The only thing required from the investor is that they need to create an account with the website before they start trading. And most of them maintain not one but two sites, one they use for trial and learning purposes, while the other is for regular trading.

It is normal for a person to incur losses during their initial investments but with practice they will master the art of following trends. And once they have set their feet firmly in the ground there is no turning back. The worldwide web offers plenty of options through which one can spend less time than before but double their earnings. All they need to do is follow the rules of business forex online trading to assess each of the currencies and play based on the reports generated periodically. This will not only yield them high returns but also help them reduce the risk factor with every investment made. And while dealing online, they can make buy or sell decisions all 24 hours of the day as someone somewhere is still up and trading in the foreign exchange. Even while they are sleeping, they might earn about 100 pips through the exchange because the other country might be awake doing business.

Nick Schultz is a Forex Trading expert who recently developed an eCourse that details a step by step process for success Forex investing. If you are interested in learning more about his "9 Steps to Better Forex Investing" eCourse and learning how to make greater profits from your Forex Trading, please go here right now! : http://www.forexinvestingcourse.com

Learn Forex Currency Trading Online

Learn Forex Currency Trading Online

by T. Houser

Forex, a specialized form of day trading, involves the simultaneous buying and selling of world currencies. Trading occurs via phone, or online, with hubs in Sydney, London, Tokyo and New York, creating a 24-hour market. Forex is a speculative market, and as with many securities markets, requires a certain level of knowledge to reap the possible huge profits and avoid the profound losses. One way to gain this knowledge is to learn forex currency trading online.

Websites to learn forex currency trading online abound from brokerage sites to software (trading platforms) sites to online educational sites. In exchange for opening an account, some brokerage sites will offer free online classes in forex using the brokerage's personal trading platform. Other sites offer free self-study courses that include contact with professional forex traders, and a 30-day live trading demo to learn forex currency trading online.

The educational sites provide a range of course types, with varying costs, to learn forex currency trading online. Choices include online seminars, self-study classes in the form of online sessions and in downloaded files, interactive lessons with professionals, and the use of videos simulating actual trades. Prices for the courses range from free to hundreds of dollars. One website, The Online Training Academy, which was formed in 1997 to specifically train traders, also offers mentoring programs and on-location courses.

Professional traders offer courses to learn forex currency trading online. Some of these traders have been trading forex since its inception, and have developed their own trading platforms (software). Their courses offer their expertise in CD, DVD and study-at-home via online formats, and can cost anywhere from $300 on up, depending on the number of sessions and level of expertise desired.

The majority of the online class sites agree certain basic topics are necessary to learn forex currency trading online, starting with how the forex market works. Knowledge of forex terms, such as spread, margin, rollover etc, is also important. In addition, it is important to know about currency pairs and the types of charts available, plus how to read them. Understanding when to trade is also recommended.

Once traders learn forex currency trading online, and before trading can begin, they need to know how to open an account, to distinguish features of trading platforms, and the best way to choose a broker. This last is particularly important because in order to trade, a customer must have a reputable broker. Many brokers offer simulated trading sessions to help the trader understand the process before committing capital, and to decide if the brokerages' particular trading platform meets the customer's needs.

Finding the right course may take some time, but the extra effort will be more than worth it. As stated above, the forex market is speculative and carries with it a considerable amount of risk. Virtually everyone associated with forex trading advises traders to gain as much knowledge as possible before entering the market. Bottom line: the best way to learn forex currency trading online is to take advantage of all the tools available.