Avoid This One Deadly Mistake to Become a Successful Forex Trader

Ah yes, this one mistake will eat you alive. It will empty your forex trading account. It will break your spirit like no other trading mistakes will. This is the very same mistake that every trader would have made at least once in his or her trading experience. But if you can avoid this costly mistake, half your battle for successful forex trading is won.

So what is this monster of a mistake?

It is over-leveraging a trade and not cutting its loss when it begins to go the wrong way, instead letting the loss snowball into something out of control. Just making this mistake one time… yes one single time, will make you doubt if you could ever recover your losses or even damage your psyche and cause you to abandon forex trading altogether.

If you have been trading, you will know exactly what I am talking about. If you’re about to begin learning forex trading, you would probably have heard about the dangers of trading – losing your capital in double quick time.

And this is exactly the danger you’ve been hearing about trading that even the most professional traders are susceptible to making.

The truth is that you DO NOT have to make this mistake of suffering a mega loss on a single trade. But due to human nature, greed, fear and so forth, overcoming these “mental barriers” can be challenging for many.

With that said, do not let that discourage you. Because if you are determined to succeed at forex trading, you will persevere and overcome this problem eventually. And thereafter you will find that making money from forex trading isn’t difficult at all.

If you are serious in becoming a successful forex trader, get started right here today!



Source by Paul Lum

10 Steps to Successful Automatic Forex Trading With Expert Advisors

A Forex Expert Advisor (also know by other names such as Forex Trading Robot, EA, MT4 EA, Automated Forex Trading Software) is a mechanical trading system written in the MQL-4 programming language and designed to automate trading activities on the MetaTrader4 platform.

Hundreds of brokers and system developers are enticing new traders into trading the Forex market with claims of double digit or higher returns in a short space of time by using MetaTrader4 automatic trading systems, called Expert Advisors. The reality is that 95% of new traders lose their trading bank in the first couple of months. How can you ensure that you are part of the successful 5%?

Here are 10 tips that can help you achieve quick success when first starting off as a Forex trader.

  • Get familiar with the Forex market. You can’t possibly hope to successfully trade a market that you do not understand. Don’t listen to all the hype that “newbies” can buy an automatic system and be successful immediately. The Forex is a very exciting market but you need to read and learn about this beast before trying to trade it.
  • Purchase a commercially available Expert Advisor (automatic trading system) that offers a user support forum. There are systems that you can get for free, but if you are just starting out you should consider purchasing a system that provides good customer support and also offers a user forum where you can read about the problems and the solutions encountered by fellow traders.
  • Choose the system before you choose the broker. Different Expert Advisors trade on different currency pairs and different brokers offer different spreads. Once you know exactly what and how your system will be trading, you can then shop around for the best broker.
  • Choose a reputable broker who offers the MetaTrader4 trading platform free. There a literally hundreds of brokers now offering MT4, but some are more reputable than others. Only choose a regulated broker. User forums often contain discussions on broker performance.
  • Learn how to use MetaTrader 4. Make an effort to fully familiarize yourself with the trading platform so that you can set up your Expert Advisor up correctly and not make silly parameter errors. When in doubt, read the manual.
  • Know the difference between fixed and variable spreads. Some brokers offer fixed spreads and are usually market makers. Other types of brokers, like ECN brokers, offer variable spreads. Make sure you understand the effect this has on how your particular system trades as it can have a significant impact on your returns.
  • Experiment with micro lots when breaking in a new system. Brokers offer a range of lot sizes – there are standard mini and micro lots. Make sure you know the difference before you trade and choose only a micro lot account if you have a small trading bank or are just starting out with a new system.
  • Open a demo account. Most if not all brokers will offer a demo account which you can practise with before risking real money. If you are trading a new system or are new to trading it is a good idea to experiment for a period on a demo account first.
  • Start trading with small risk. Ensure you understand the value of each pip for the currency pair(s) you trade in your new system. There are pip calculators available on the Internet that will provide this information quickly for you.
  • Never get greedy. Never raise your risk above the recommended levels for the system you are trading. The user forums are often a good source of commentary on risk levels for a particular system.

Conclusion: Choosing the right broker and the right type of account is just as important as choosing the right system. If you need more help in choosing the right system, check out the live results and detailed reviews for top selling systems on ForexRobotShop.com



Source by Gaye White

The Minimum Requisite Education For Successful Forex Trading

You can call it by any of these names—Foreign exchange, forex or just FX. They all describe the mode of trading of the world’s major currencies. Today, the forex market is considered the largest market in the world with the volume of trading that amounts to around USD 1.5 trillion every day. Add the volume of activities of all the domestic trading exchanges and even then the forex transaction on an average day is more than this combined value. The forex trading value is also one hundred times greater than the daily trading on the NYSE (New York Stock Exchange). The activities in this market are mostly speculative, with a small portion representing governments’ and banks’ fundamental currency conversion needs.

The forex market is fundamentally different in nature having an operation on the “interbank” market, instead of operating through a central exchange like those of the domestic stock markets. In nature forex market resembles an OTC or over the counter market, where trading takes place directly between the two parties whether over the telephone or on electronic networks all over the world. The main centers for trading are Sydney, Tokyo, London, Frankfurt and New York. Because of this worldwide network of trading centres, the forex market remains operative 24-hour all through the week.

In the earlier days, the forex trading was the monopoly of financial giants and a few selective big time traders. But the globalization and internet has thrown open the market to common traders with a sharp intuition for speculative trading. In addition to a sharp intuition and predicting abilities, a first time trader needs some basi training in the major terms of forex trading.

The basic forex terms:

Spot:

The forex market is described as the spot market as the trades are settled instantly, “on the spot”. In real life it amounts to two banking days.

Spread

You sell currencies in this market through a ‘bid’, and you buy them through ‘ask’. The spread is the difference between the price at which you sold the currency and the price you have bought them. Under normal market condition you will find a spread on majors amounting to 3 pips.

Pips

As said earlier you will often come across such scenario as a 3-pip spread on trading the majors. It is the basic unit for measuring a cross price quote changes. Consider this instance, where EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9878. The difference is USD 0.0003, which is equal to 3 “pips”.

Margin Trading

Foreign exchange is normally traded on margin which is considerably higher than any other stock exchanges. In forex market you will enjoy a margin up to 100 times.

Base Currency and Variable Currency

In forex market you are always trading on a combination of two currencies. For example, you will buy US dollars and sell Euro. It means you have to speculate on the assumption of comparative strength and weaknesses of the any two currencies.

Forex market is a perfect for those who do not dare to take risks. But you will be in a position of taking risks when you adequately educated in this field and your basic minimum education in this field should start with a clear perception about the above described forex trading terms.



Source by Berg Davidsen