Making money in forex is easy if you know how the bankers trade!

I’m often mystified why so many traders struggle to make consistent money out of forex trading. The answer has more to do with what they don’t know than what they do know. After working in investment banks for 20 years many of which were as a Chief trader its second knowledge how to extract cash out of the market. It all comes down to understanding how the traders at the banks execute and make trading decisions. 

Why? Bank traders only make up 5% of the total number of forex traders with speculators accounting for the other 95%, but more importantly that 5% of bank traders account for 92% of all forex volumes. So if you don’t know how they trade, then you’re simply guessing. 

First let me bust the first myth about forex traders in institutions. They don’t sit there all day banging away making proprietary trading decisions. Most of the time they are simply transacting on behalf of the banks customers. It’s commonly referred to as ‘clearing the flow”. They may perform a few thousand trades a day but none of these are for their proprietary book

Investment banking


They actually only perform 2-3 trades a week for their own trading account. These trades are the ones they are judged on at the end of the year to see whether they deserve an additional bonus or not.

Bankers Investment

So as you can see traders at the banks don’t sit there all day trading randomly ‘scalping’ trying to make their budgets. They are extremely methodical in their approach and make trading decisions when everything lines up, technically and fundamentally. That’s what you need to know! 

As far as technical analysis goes it is extremely simple. I am often dumbfounded by our client’s charts when they first come to us. They are often littered with mathematical indicators which not only have significant 3-4 hour time lags but also often contradict each other. Trading with these indicators and this approach is the quickest way to rip through your trading capital. 

Wrong Analysis


Bank trader’s charts look nothing like this. In fact they are completely the opposite. All they want to know is where the key critical levels. Don’t forget these indicators were developed to try and predict where the market is going. The bank traders are the market. If you understand how they trade then you don’t need any indicators. They make split second decisions based on key technical and fundamental changes. Understanding their technical analysis is the first step to becoming a successful trader. You’ll be trading with the market not against it. 


Correct Analysis


What it all comes down to is simple support and resistance. No clutter, nothing to alter their trading decisions. Simple, effective and highlighting the key levels. 

I’m not going to go into the ins and outs of where they actually enter the market, but let me say this: it’s not where you think. The trendlines are simply there to indicate key support and resistance. Entering the market is another discussion all together. 

The key aspect to their trading decisions is derived from the economic fundamentals. The fundamental backdrop of the market consists of three major areas and that’s why it’s hard to pin point currency direction sometimes. 

When you have the political situation countering the central bank announcements currency direction is somewhat disjointed. But when there are no political issues and formulated central bank policy acting in accordance with the economic data, that’s when we get pure currency direction and the big trends emerge. This is what bank traders wait for. 

The fundamental aspect of the market is extremely complex and it can take years to master them. This is a major area we concentrate on during our two day workshop to ensure traders have a complete understanding of each area. If you understand them you are set up for long term success as this is where currency direction comes from. 

There is a lot of money to be made from trading the economic data releases. The key to trading the releases is twofold. First, having an excellent understanding of the fundamentals and how the various releases impact the market. Secondly, knowing how to execute the trades with precision and without hesitation. If you can get a control of this aspect of trading and have the confidence to trade the events then you’re truly set up to make huge capital advances. 

After all it is these economic releases which really direct the currencies. These are the same economic releases that central banks formulate policy around. So by following the releases and trading them you not only know what’s going on with regards central bank policy but you’ll also be building your capital at the same time. 

Opportunities


Now to be truly successful you need an extremely comprehensive capital management system that not only protects you during periods of uncertainty but also pushes you forward to experience capital expansion. This is your entire business plan so it’s important you get this down pat first. 

Our stringent capital management system perfectly encompasses your risk to rewards ratios, capital controls as well as our trade plan – entry and exits. This way when you’re trading, all your concerned about is finding entry levels. Having such a system in place will also alleviate the stresses of trading and allow you to go about your day without spending endless hours monitoring the market. 

I can tell you most traders at banks spend most of the day wandering around the dealing room chatting to other traders or going to lunches with brokers. Rarely are they in front of the computer for more than a few hours. You should be taking the same approach. If you understand the technical and fundamental aspects of the market and have a comprehensive professional capital management system then you can.

From here it just takes a simple understanding of the key strategies to apply and where to apply them and away you go. Trust me you will experience more capital growth then you ever have before if you know how the bank traders trade. Many traders have tried to replicate their methods and I’ve seen numerous books on “how to beat the bankers”. But the point is you don’t want to be beating them but joining them. That way you will be trading with the market not against it. 

So to conclude let me say this: There are no miraculous secrets to trading forex. There are no special indicators or robots that can mimic the dynamic forex market. You simply need to understand how the major players (bankers) trade and analyse the market. If you get these aspects right then your well on the way to success. 

I Am a Good Forex Trader; What Is My Secret?

I know myself as a good and successful trader, because I have been able to repeat my success every month for several years. I know many traders who started learning forex almost when I did, but they are still learning, testing different systems, and losing money. It is good that they are not disappointed yet, but I don’t know when they will start making money consistently. Why did I started making money after few months of learning and practising, but these people are still learning? Many of them know a lot more than me, but why they don’t make money? What is the secret of my success?

I am a good trader, because…

1. My trading system is simple and easy to use.

I have never tried to invent something new in forex trading. I did not want to invent the wheel from the scratch. We already have everything we need to trade and make money. All of the tools we need are accessible for free. Why should we make our lives too complicated?

I learned the technical analysis and candlestick signals and patterns. This is what I did as soon as I started learning forex. After a while, I almost mastered the technical analysis and candlesticks. I demo traded and came to this conclusion that I should stick to candlesticks and forget about the other things like support/resistance lines and levels, chart patterns, and… because they were somehow too hard, time consuming, and unreliable. I have explained it here.

So I kept everything simple from the first day, and I started getting good results very soon. I did not try different indicators, because I did know that if I wanted to do it, I would have to spend the rest of my life on it. There are zillions of indicators, trading systems, and… . But there are some simple and easy to use tools that are already tried by thousands of traders, from Japan to USA, and it is proven that they work. So I used those tools and forgot about the others.

2. I am disciplined.

I simply use what I have learned and the tools I have. I am not looking for anything else. I do not let any emotions interfere and make me decide wrongly. I check the charts and I place the orders if I see a strong signal. It is as simple as that. There is nothing complicated about trading. Everybody can do it. I have a car (my trading tools e.g. candlesticks and Bollinger Bands), and an address (the trading system/strategy). Every day, I turn on the car and follow the address. I reach the destination within 30 minutes. This is what everybody is able to do.

3. I wait for the best setups.

There are always some weak setups on the charts. Those setups are for the traders who want to lose money. They are not for the professional and experienced traders. So I leave those setups for the others. I wait for the best and strong setups, and fortunately they always form. There are always good opportunities in the forex market. If I don’t trade today, I will do it tomorrow.

4. I use a reasonable stop loss and I am loyal to it.

Stop loss is one of the most important things in trading. Those who do not set a stop loss will be out of the game sooner than later. You can easily wipe out a million dollar account with just one position, if you do not set a proper stop loss. I have seen someone who wiped out a 7 million dollar account, because he foolishly did not set any stop loss, and emphasized that his positions were correct and the market would finally turn around to follow his favourite direction. The market did turn around when his account was already blown up.

Your trading system should tell you about the best and most optimum place to set the stop loss. Otherwise forget about it. You should set a proper and reasonable stop loss which is not too tight or wide, for each of the positions you take. You should not widen your stop loss when the price goes against you and is about to hit the stop loss. Also, please note that a too wide stop loss is like having no stop loss. And a too tight stop loss causes you to lose money even when your position is correct.

To stay away from the emotions, I do not check the charts when I take the positions every day after the daily candlesticks close. Checking the charts when you have open positions can trigger the negative and harmful emotions that cause you to make mistakes. When you see your position is losing, you get emotional and you close your position not to lose more, or you will widen your stop loss because you are afraid of losing too early and you want to give your position more room. When your position is making money and you are watching it, your emotions can cause you to close the position, because you think it is possible that the market goes against you and you lose the profit you have in your hand.

I don’t get emotional so easily, however I prefer not to check the charts and my positions. I take the positions, set the stop loss and target and then I come back the next day.

5. I do not add to my bad positions (I do not average down).

Instead of trading and making money, some people always try to prove that they are right, or they try to break the others’ records. Therefore, when they take a position and it goes against them, they take more positions probably to hit the market turning point finally. However, in most cases the forex market keeps on following the same direction and these traders will lose all they have in their accounts. This is not trading. It is gambling.

6. I do not over-trade.

Over-trading is another syndrome I see among forex traders. Over-trading does not help you to make more money. It causes you to lose your money faster. It is possible that you double your account within a short time through over-trading, but you will wipe out your account the next day, because you are not going to be lucky every day. If you trade based on luck, one day you win, and the other day you lose all you have already made.

7. I do not risk too much money.

I am not greedy at all. I do not try to become multi millionaire and make millions of dollars every month. It is possible to make millions on the paper and with the demo account, but live trading is different.

I never open a big account to make my broker greedy and attract his attention. I trade with a small amount of money, raise it into some reasonable amount, and then withdraw most part of it and leave a small amount in my account again. I always do this.

I enjoy growing a small account. I do not like to have a million dollar account and make $50k every month, withdraw the profit and leave my capital there.

After several years of working and gaining experiences, my trading buddies and me came to this conclusion that we’d better to grow small accounts, instead of having a big account. This is much safer, and besides, it eliminates the harmful emotions, specially fear.

8. I do not compete with the other traders.

In forex trading, it is ridiculous to compete with the other traders, because any trader has a different style. Any trader looks at the market from a different angle, so traders can not compete with each other.

While a conservative trader makes only 100 pips profit per month, another trader makes 800 pips. Both of them are great, and one can never say which one is better, because the one who makes only 100 pips, follows his trading system and discipline, as well as the one who makes 800 pips.

I know myself a good trader, and I do not try to compete with a friend who trades more than me and makes more money. We are both good, but just our trading style is different. Trading style has a direct relationship with personality, and as everybody has a different personality, no one can compete with the another trader in trading.

 Lastly, Join me and let make it good with a reliable forex broker  www.Instaforex.com. Register here.

9 Tricks Of The Successful Forex Trader

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For all of its numbers, charts and ratios, trading is more art than science. Just as in artistic endeavors, there is talent involved, but talent will only take you so far. The best traders hone their skills through practice and discipline. They perform self analysis to see what drives their trades and learn how to keep fear and greed out of the equation. In this article we'll look at nine steps a novice trader can use to perfect his or her craft; for the experts out there, you might just find some tips that will help you make smarter, more profitable trades, too

Step 1. Define your goals and then choose a style of trading that is compatible with those goals. Be sure your personality is a match for the style of trading you choose.

Before you set out on any journey, it is imperative that you have some idea of where your destination is and how you will get there. Consequently, it is imperative that you have clear goals in mind as to what you would like to achieve; you then have to be sure that your trading method is capable of achieving these goals. Each type of trading style requires a different approach and each style has a different risk profile, which requires a different attitude and approach to trade successfully. For example, if you cannot stomach going to sleep with an open position in the market then you might consider day trading. On the other hand, if you have funds that you think will benefit from the appreciation of a trade over a period of some months, then a position trader is what you want to consider becoming. But no matter what style of trading you choose, be sure that your personality fits the style of trading you undertake. A personality mismatch will lead to stress and certain losses.

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Step 2. Choose a broker with whom you feel comfortable but also one who offers a trading platform that is appropriate for your style of trading

It is important to choose a broker who offers a trading platform that will allow you to do the analysis you require. Choosing a reputable broker is of paramount importance and spending time researching the differences between brokers will be very helpful. You must know each broker's policies and how he or she goes about making a market. For example, trading in the over-the-counter market or spot market is different from trading the exchange-driven markets. In choosing a broker, it is important to read the broker documentation. Know your broker's policies. Also make sure that your broker's trading platform is suitable for the analysis you want to do. For example, if you like to trade off of Fibonacci numbers, be sure the broker's platform can draw Fibonacci lines. A good broker with a poor platform, or a good platform with a poor broker, can be a problem. Make sure you get the best of both.


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Step 3. Choose a methodology and then be consistent in its application.
Before you enter any market as a trader, you need to have some idea of how you will make decisions to execute your trades. You must know what information you will need in order to make the appropriate decision about whether to enter or exit a trade. Some people choose to look at the underlying fundamentals of the company or economy, and then use a chart to determine the best time to execute the trade. Others use technical analysis; as a result they will only use charts to time a trade. Remember that fundamentals drive the trend in the long term, whereas chart patterns may offer trading opportunities in the short term. Whichever methodology you choose, remember to be consistent. And be sure your methodology is adaptive. Your system should keep up with the changing dynamics of a market

Many traders get confused because of conflicting information that occurs when looking at charts in different time frames. What shows up as a buying opportunity on a weekly chart could, in fact, show up as a sell signal on an intraday chart. Therefore, if you are taking your basic trading direction from a weekly chart and using a daily chart to time entry, be sure to synchronize the two. In other words, if the weekly chart is giving you a buy signal, wait until the daily chart also confirms a buy signal. Keep your timing in sync.


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Step 4. Choose a longer time frame for direction analysis and a shorter time frame to time entry or exit.


Many traders get confused because of conflicting information that occurs when looking at charts in different time frames. What shows up as a buying opportunity on a weekly chart could, in fact, show up as a sell signal on an intraday chart. Therefore, if you are taking your basic trading direction from a weekly chart and using a daily chart to time entry, be sure to synchronize the two. In other words, if the weekly chart is giving you a buy signal, wait until the daily chart also confirms a buy signal. Keep your timing in sync.


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Step 5. Calculate your expectancy.

Expectancy is the formula you use to determine how reliable your system is. You should go back in time and measure all your trades that were winners versus all your trades that were losers. Then determine how profitable your winning trades were versus how much your losing trades lost.

Take a look at your last 10 trades. If you haven't made actual trades yet, go back on your chart to where your system would have indicated that you should enter and exit a trade. Determine if you would have made a profit or a loss. Write these results down. Total all your winning trades and divide the answer by the number of winning trades you made

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Step 6. Focus on your trades and learn to love small losses.

Once you have funded your account, the most important thing to remember is that your money is at risk. Therefore, your money should not be needed for living or to pay bills etc. Consider your trading money as if it were vacation money. Once the vacation is over your money is spent. Have the same attitude toward trading. This will psychologically prepare you to accept small losses, which is key to managing your risk. By focusing on your trades and accepting small losses rather than constantly counting your equity, you will be much more successful.

Secondly, only leverage your trades to a maximum risk of 2% of your total funds. In other words, if you have $10,000 in your trading account, never let any trade lose more than 2% of the account value, or $200. If your stops are farther away than 2% of your account, trade shorter time frames or decrease the leverag

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Step 7. Build positive feedback loops.

A positive feedback loop is created as a result of a well-executed trade in accordance with your plan. When you plan a trade and then execute it well, you form a positive feedback pattern. Success breeds success, which in turn breeds confidence - especially if the trade is profitable. Even if you take a small loss but do so in accordance with a planned trade, then you will be building a positive feedback loop.


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Step 8. Perform weekend analysis.
It is always good to prepare in advance. On the weekend, when the markets are closed, study weekly charts to look for patterns or news that could affect your trade. Perhaps a pattern is making a double top and the pundits and the news are suggesting a market reversal. This is a kind of reflexivity where the pattern could be prompting the pundits while the pundits are reinforcing the pattern. Or the pundits may be telling you that the market is about to explode. Perhaps these are pundits hoping to lure you into the market so that they can sell their positions on increased liquidity. These are the kinds of actions to look for to help you formulate your upcoming trading week. In the cool light of objectivity, you will make your best plans. Wait for your setups and learn to be patient
If the market does not reach your point of entry, learn to sit on your hands. You might have to wait for the opportunity longer than you anticipated. If you miss a trade, remember that there will always be another. If you have patience and discipline you can become a good trader

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Step 9. Keep a printed record.

Keeping a printed record is one of the best learning tools a trader can have. Print out a chart and list all the reasons for the trade, including the fundamentals that sway your decisions. Mark the chart with your entry and your exit points. Make any relevant comments on the chart. File this record so you can refer to it over and over again. Note the emotional reasons for taking action. Did you panic? Were you too greedy? Were you full of anxiety? Note all these feelings on your record. It is only when you can objectify your trades that you will develop the mental control and discipline to execute according to your system instead of your habits.

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Bottom Line
The steps above will lead you to a structured approach to trading and in return should help you become a more refined trader. Trading is an art and the only way to become increasingly proficient is through consistent and disciplined practice. Remember the expression: the harder you practice the luckier you'll 


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Top 4 Things Successful Forex Traders Do

Trading in the financial markets is surrounded by a certain amount of mystique, because there is no single formula for trading successfully. Think of the markets as being like the ocean and the trader as a surfer. Surfing requires talent, balance, patience, proper equipment and being mindful of your surroundings. Would you go into water that had dangerous rip tides or was shark infested? Hopefully not.

The attitude to trading in the markets is no different than the attitude required for surfing. By blending good analysis with effective implementation, your success rate will improve dramatically and, like many skill sets, good trading comes from a combination of talent and hard work. Here are the four legs of the stool that you can build into a strategy to serve you well in all markets.

Leg No. 1 - Approach 
Before you start to trade, recognize the value of proper preparation. The first step is to align your personal goals and temperament with the instruments and markets that you can comfortably relate to. For example, if you know something about retailing, then look to trade retail stocks rather than oil futures, about which you may know nothing. Begin by assessing the following three components.

Time Frame
The time frame indicates the type of trading that is appropriate for your temperament. Trading off a five-minute chart suggests that you are more comfortable being in a position without the exposure to overnight risk. On the other hand, choosing weekly charts indicates a comfort with overnight risk and a willingness to see some days go contrary to your position.

In addition, decide if you have the time and willingness to sit in front of a screen all day or if you would prefer to do your research quietly over the weekend and then make a trading decision for the coming week based on your analysis. Remember that the opportunity to make substantial money in the markets requires time. Short-term scalping, by definition, means small profits or losses. In this case, you will have to trade more frequently.


Methodology
Once you choose a time frame, find a consistent methodology. For example, some traders like to buy support and sell resistance. Others prefer buying or selling breakouts. Yet others like to trade using indicators such as MACD and crossovers.

Once you choose a system or methodology, test it to see if it works on a consistent basis and provides you with an edge. If your system is reliable more than 50% of the time, you will have an edge, even if it's a small one. If you backtest your system and discover that had you traded every time you were given a signal and your profits were more than your losses, chances are very good that you have a winning strategy. Test a few strategies and when you find one that delivers a consistently positive outcome, stay with it and test it with a variety of instruments and various time frames.

Market (Instrument)
You will find that certain instruments trade much more orderly than others. Erratic trading instruments make it difficult to produce a winning system. Therefore, it is necessary to test your system on multiple instruments to determine that your system's "personality" matches with the instrument being traded. For example, if you were trading the USD/JPY currency pair in the forex market, you may find that Fibonacci support and resistance levels are more reliable in this instrument than in some others. You should also test multiple time frames to find those that match your trading system best.


Leg No. 2 - Attitude
Attitude in trading means ensuring that you develop your mindset to reflect the following four attributes:


Patience
Once you know what to expect from your system, have the patience to wait for the price to reach the levels that your system indicates for either the point of entry or exit. If your system indicates an entry at a certain level but the market never reaches it, then move on to the next opportunity. There will always be another trade. In other words, don't chase the bus after it has left the terminal; wait for the next bus.


Discipline
Discipline is the ability to be patient - to sit on your hands until your system triggers an action point. Sometimes, the price action won't reach your anticipated price point. At this time, you must have the discipline to believe in your system and not to second-guess it. Discipline is also the ability to pull the trigger when your system indicates to do so. This is especially true for stop losses.

Objectivity
Objectivity or "emotional detachment" also depends on the reliability of your system or methodology. If you have a system that provides entry and exit levels that you know have a high reliability factor, then you don't need to become emotional or allow yourself to be influenced by the opinion of pundits who are watching their levels and not yours. Your system should be reliable enough so that you can be confident in acting on its signals.


Realistic Expectations
Even though the market can sometimes make a much bigger move than you anticipate, being realistic means that you cannot expect to invest $250 in your trading account and expect to make $1,000 each trade. Short-term time frames provide less profit opportunities than longer term, but the risk with longer-term time frames is higher. It's a question of risk versus reward.


Leg No. 3 - Discrimination
Different instruments trade differently depending on who the major players are and why they are trading that particular instrument. Hedge funds are motivated differently than mutual funds. Large banks that are trading the spot currency market in specific currencies usually have a different objective than currency traders buying or selling futures contracts. If you can determine what motivates the large players then you can often piggyback them and profit accordingly.

Alignment
Pick a few currencies, stocks or commodities and chart them all in a variety of time frames. Then apply your particular methodology to all of them and see which time frame and which instrument is most responsive to your system. This is how you discover a "personality" match for your system. Repeat this exercise regularly to adapt to changing market conditions.


Leg No. 4 - Management (Implementation)
Since there is no such thing as only profitable trades, no system will trigger a 100% sure thing. Even a profitable system, say with a 65% profit to loss ratio, still has 35% losing trades. Therefore, the art of profitability is in the management and execution of the trade.

  Risk Control
In the end, successful trading is all about risk control. Take losses quickly and often, if necessary. Try to get your trade in the correct direction right out of the gate. If it backs off, cut out and try again. Often, it is on the second or third attempt that your trade will move immediately in the right direction. This practice requires patience and discipline, but when you get the direction right, you can trail your stops and usually be profitable at best, or break even at worst.


The Bottom Line
There are as many nuanced methods of trading as there are traders. There is no right or wrong way to trade. There is only a profit-making trade or a loss-making trade. Warren Buffet says there are two rules in trading: Rule 1: Never lose money. Rule 2: Remember Rule 1. Stick a note on your computer that will remind you to take small losses often and quickly - don't wait for the big losses.

9 Tough Questions for Forex Brokers

 1. How often are advertised spreads available?

Some brokers publish “as low as” or “typical” spreads without revealing when or for how long these rates are on offer. You may never get these spreads when you trade.
If your broker advertises spreads “as low as” 0.9 pips on EUR/USD, you need to know what “as low as” means. Do special conditions apply? Can you see a record of recent spreads to confirm their  spreads are what they advertise and if they apply to you?

   2. Do special conditions or restrictions apply?

All too often, brokers will advertise tight spreads that, in truth, apply only to a narrow range of ticket sizes or a small group of privileged customers. These “special” rates are reserved for traders who meet restrictions based on deposit size, trade volume, region, or lot size.
For example, many brokers impose a minimum account opening balance or require a minimum trade size before you can access their tightest spreads. (Brokers can be equally reluctant to offer their lowest spreads for larger ticket sizes.) The only way to truly test quality of execution is to try the real thing, so such restrictions may make it prohibitively expensive to test their platforms.
    3. Are there extra fees in addition to the spread?
Some brokers may offer low spreads but make their profit in other ways. For example, they may charge extra fees or commissions for the privilege of accessing their “professional” trading platforms. Or they may charge monthly fees you can avoid only if you keep a minimum deposit or meet a minimum trading volume every month.

4. Do all clients get the same spreads?

Every forex dealer claims to have the industry’s tightest spreads. But not every trader gets the low prices touted by some dealers, who may tailor their spreads based on customer trading patterns, account balance, trading volume, or third-party introductions. Larger and better-connected traders and financial organizations may receive “preferred” treatment and “discounts” that you never even hear about, never mind get offered.

5. Will my trade get executed at the quoted price?

The tighter the spread, the better for you. But it’s the quality of execution that determines whether you actually receive the tight spreads you see on screen. Beware rejected trades, delayed execution,price-skewing and stop-hunting that may never occur on the broker’s demo platform.Say, for example, your screen shows a tight spread and you opt to make a trade at that price. But your trade is filled a few pips to your disadvantage or is mysteriously rejected. When this happens again and again, it’s a clue that you’re falling prey to “bait-and-switch” pricing.

6. Do I have unlimited access to a live demo platform?

A demo platform can be useful to observe how prices and spreads vary under different market conditions. And it can give you an idea of how good your broker’s quality of execution is—but only if the demo platform behaves exactly the same as the real thing.
Ask how the broker's demo platform differs from their real platform in terms of execution and spreads.
7. How are interest charges and payments calculated?

In the forex trading industry, standard practice for interest calculations on funds being traded is the rollover swap with two-day settlements. This means that you pay (or receive) interest based on the open trades you hold at 5 p.m. EST, with weekend interest calculated and included on Wednesdays.Experienced intraday traders may be used to timing their trades around the rollover swap, but consider how it may impede your freedom to keep trades open. Ideally,you should receive (or pay) interest based on the length of time you hold open trades—not based on the time of day you hold them.

8. For fixed spreads, what are the benefits?

In forex, rates and spreads change with every market tick. If you choose a broker that offers trading at fixed rates, you are likely paying higher spreads than you would under a variable system. Is it worth it? That depends on your trading pattern. With fixed spreads, you are in effect paying an “insurance premium”—so you can trade around news events or other times when the markets tend to be more volatile.

9.Do I have open, uncensored access to information?

Many banks and forex brokers don’t like to share their data and intentionally hide the very information you need to make your best trading decisions. This tendency starts with a reluctance to provide open, unfettered access to spreads and pricing information. These same organizations rarely share their customer feedback , leaving you to wade through external forums where you never really know whose agenda is whose.


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10 Ways To Avoid Losing Money In Forex

10 Ways To Avoid Losing Money In Forex

The global forex market boasts over $4 trillion in average daily trading volume, making it the largest financial market in the world. Forex's popularity entices traders of all levels, from greenhorns just learning about the financial markets to well-seasoned professionals. Because it is so easy to trade forex - with round-the-clock sessions, access to significant leverage and relatively low costs - it is also very easy to lose money trading forex. This article will take a look at 10 ways that traders can avoid losing money in the competitive forex market.


1. Do Your Homework – Learn Before You Burn
Just because forex is easy to get into doesn't mean that due diligence can be avoided. Learning about forex is integral to a trader's success in the forex markets. While the majority of learning comes from live trading and experience, a trader should learn everything possible about the forex markets, including the geopolitical and economic factors that affect a trader's preferred currencies. Homework is an ongoing effort as traders need to be prepared to adapt to changing market conditions, regulations and world events. Part of this research process involves developing a trading plan. (For more, check out 10 Steps To Building A Winning Trading Plan.)

2. Take the Time to Find a Reputable Broker
The forex industry has much less oversight than other markets, so it is possible to end up doing business with a less-than-reputable forex broker. Due to concerns about the safety of deposits and the overall integrity of a broker, forex traders should only open an account with a firm that is a member of the National Futures Association (NFA) and that is registered with the U.S. Commodity Futures Trading Commission (CFTC) as a futures commission merchant. Each country outside of the United States has its own regulatory body with which legitimate forex brokers should be registered.

Traders should also research each broker's account offerings, including leverage amounts, commissions and spreads, initial deposits, and account funding and withdrawal policies. A helpful customer service representative should have all this information and be able to answer any questions regarding the firm's services and policies. (Discover the best ways to find a broker who will help you succeed in the forex market. This is why we suggest INSTA FOREX. The best forex broker in Asia.

3. Use a Practice Account
Nearly all trading platforms come with a practice account, sometimes called a simulated account or demo account. These accounts allow traders to place hypothetical trades without a funded account. Perhaps the most important benefit of a practice account is that it allows a trader to become adept at order entry techniques.

Few things are as damaging to a trading account (and a trader's confidence) as pushing the wrong button when opening or exiting a position. It is not uncommon, for example, for a new trader to accidentally add to a losing position instead of closing the trade. Multiple errors in order entry can lead to large, unprotected losing trades. Aside from the devastating financial implications, this situation is incredibly stressful. Practice makes perfect: experiment with order entries before placing real money on the line.
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4. Keep Charts Clean
Once a forex trader has opened an account, it may be tempting to take advantage of all the technical analysis tools offered by the trading platform. While many of these indicators are well-suited to the forex markets, it is important to remember to keep analysis techniques to a minimum in order for them to be effective. Using the same types of indicators – such as two volatility indicators or two oscillators, for example – can become redundant and can even give opposing signals. This should be avoided.

Any analysis technique that is not regularly used to enhance trading performance should be removed from the chart. In addition to the tools that are applied to the chart, the overall look of the workspace should be considered. The chosen colors, fonts and types of price bars (line, candle bar, range bar, etc) should create an easy-to-read and interpret chart, allowing the trader to more effectively respond to changing market conditions.

5. Protect Your Trading Account
While there is much focus on making money in forex trading, it is important to learn how to avoid losing money. Proper money management techniques are an integral part of successful trading. Many veteran traders would agree that one can enter a position at any price and still make money – it's how one gets out of the trade that matters.

Part of this is knowing when to accept your losses and move on. Always using a protective stop loss is an effective way to make sure that losses remain reasonable. Traders can also consider using a maximum daily loss amount beyond which all positions would be closed and no new trades initiated until the next trading session. While traders should have plans to limit losses, it is equally essential to protect profits. Money management techniques, such as utilizing trailing stops, can help preserve winnings while still giving a trade room to grow.

6. Start Small When Going Live
Once a trader has done his or her homework, spent time with a practice account and has a trading plan in place, it may be time to go live – that is, start trading with real money at stake. No amount of practice trading can exactly simulate real trading, and as such it is vital to start small when going live.

Factors like emotions and slippage cannot be fully understood and accounted for until trading live. Additionally, a trading plan that performed like champ in back testing results or practice trading could, in reality, fail miserably when applied to a live market. By starting small, a trader can evaluate his or her trading plan and emotions, and gain more practice in executing precise order entries – without risking the entire trading account in the process.

7. Use Reasonable Leverage
Forex trading is unique in the amount of leverage that is afforded to its participants. One of the reasons forex is so attractive is that traders have the opportunity to make potentially large profits with a very small investment – sometimes as little as $50. Properly used, leverage does provide potential for growth; however, leverage can just as easily amplify losses. A trader can control the amount of leverage used by basing position size on the account balance. For example, if a trader has $10,000 in a forex account, a $100,000 position (one standard lot) would utilize 10:1 leverage. While the trader could open a much larger position if he or she were to maximize leverage, a smaller position will limit risk. (For additional reading, see Adding Leverage To Your Forex Trading.)

8. Keep Good Records
A trading journal is an effective way to learn from both losses and successes in forex trading. Keeping a record of trading activity containing dates, instruments, profits, losses, and, perhaps most importantly, the trader's own performance and emotions can be incredibly beneficial to growing as a successful trader. When periodically reviewed, a trading journal provides important feedback that makes learning possible. Einstein once said that "insanity is doing the same thing over and over and expecting different results." Without a trading journal and good record keeping, traders are likely to continue making the same mistakes, minimizing their chances of become profitable and successful traders.

9. Understand Tax Implications and Treatment
It is important to understand the tax implications and treatment of forex trading activity in order to be prepared at tax time. Consulting with a qualified accountant or tax specialist can help avoid any surprises at tax time, and can help individuals take advantage of various tax laws, such as the marked-to-market accounting. Since tax laws change regularly, it is prudent to develop a relationship with a trusted and reliable professional that can guide and manage all tax-related matters.

10. Treat Trading As a Business
It is essential to treat forex trading as a business, and to remember that individual wins and losses don't matter in the short run; it is how the trading business performs over time that is important. As such, traders should try to avoid becoming overly emotional with either wins or losses, and treat each as just another day at the office. As with any business, forex trading incurs expenses, losses, taxes, risk and uncertainty. Also, just as small businesses rarely become successful overnight, neither do most forex traders. Planning, setting realistic goals, staying organized and learning from both successes and failures will help ensure a long, successful career as a forex trader.

The Bottom Line
The worldwide forex market is attractive to many traders because of its low account requirements, round-the-clock trading and access to high amounts of leverage. When approached as a business, forex trading can be profitable and rewarding. In summary, traders can avoid losing money in forex by:

Being well-prepared
Having the patience and discipline to study and research
Applying sound money management techniques
Approaching trading activity as a business

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Best of Luck.

How to know a good forex broker.

5 Tips For Selecting A Forex Broker

1. Regulatory Compliance
In the U.S., a reputable forex broker will be a member of the National Futures Association (NFA) and will be registered with the U. S. Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant and Retail Foreign Exchange Dealer. The NFA is an industry-wide, self-regulatory organization for the futures industry in the United States.

2. Account Details
Each forex broker has different account offerings, including:-Leverage and Margin,Commissions and Spreads,Ease of Deposits and Withdrawals,

3.Currency Pairs Offered,
While there are a great deal of currencies available for trading, only a few get the majority of the attention, and therefore, trade with the greatest liquidity.

4. Customer Service
The foreign exchange market accounts for more than $4 trillion in average traded value every day, making it the world's largest financial market. Since there is no central marketplace for the forex market, traders must select a forex broker to help them conduct their trading activity. There are a large and growing number of forex brokers, and choosing the right one requires cautiously sifting through an overwhelming number of magazine and internet advertisements. In this article, we'll look at five considerations when choosing a forex broker in today's competitive forex marketplace.

5. Trading Platform
The trading platform is the investor's portal to the markets. As such, traders should make sure the platform and any software is easy to use,

Other considerations include customization options, order entry types, automated trading options, strategy builders, backtesting and trading alerts. Most brokers offer free demo accounts so that traders can try out the trading platform prior to opening and funding an account.

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