Forex Day Trading - The Major Critical Mistake That Make Day Traders Lose!

If you are considering forex day trading then you need to read this article first. Why? Because, day traders have been making the simple critical error for a number of years its obvious yet traders still make it and its this.

Day trading does not work anymore.

We all have the same information at the same time and all moves in short term time frames are random. We will look at this more in a moment but let's first give you the reality check on all those trading systems that claim big gains.

They all make big claims but there not real gains there in hindsight on paper and you will always see a disclaimer. Tell me would you trust any system with this on it:

"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".

I wouldn't but thousands do - this disclaimer allows you to make up anything you want and say hey it's just a simulation!

What good is that? - We need to make money going forward and don't have the luxury of knowing the closing prices.

Also why on earth would you trust someone saying how great their system is when they haven't had the courage to trade it for themselves. Of course if it worked then you wouldn't, even need to sell it judging by the track records the vendor would be rich beyond their wildest dreams - yet they offer you these riches for $100 or so bucks UMM.

You cannot tell where short term prices are going and that's a fact and that's why you never see a day trader make real gains - Your going to lose so don't try. If you want to trade short term use a forex swing trading system.

Moves are short term a few days to around a week, you get plenty of action and it can be very profitable. You will find lots of swing traders who make money and no day traders.

To win you need to get the odds on your side and that means trading a longer term time frame. If you have not discovered swing trading check it out.

Day traders tend to be lazy or arrogant or think currency trading is easy - well its not that's why 95% of traders lose all their money ( 100% in the case of day traders!) and of course you wouldn't expect it to be with the rewards on offer

Fact is you need to get the right forex education and get the odds on your side and you can't do that in a random trading environment.

Forex day trading will see you lose because you can't get the odds on your side, so try swing trading and you can get the odds on your side and enjoy forex trading success.

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Forex Broker Myths - 3 Common Myths, Believe Them and Lose

I earn a living in providing forex education but for 12 years, I was a forex broker and can tell you the three forex broker myths enclosed, will damage your chances of winning at forex trading so here they are...

1. Forex brokers Hunt Stops

No they don't they don't need to.

Consider this most forex brokers are market makers - this means that they win when you lose. They know over time that an average of 95% of traders will blow their money and that's great odds if you're the dealer.

They don't need to try and get the forex trader to lose; he can do that all on his own.

The story about hunting stops is put about by day traders most of the time. The problem is there not going to win anyway, because their stops are within random volatility and their bound to lose over time - so they pick someone to blame their broker!

It's not true

I have never ever seen a day trader win and I traded in excess of 9,000 clients, it's a mugs game. Instead of blaming their broker, the forex day trader should look at a more logical way of trading.

2. Demo Accounts are Great Way to Learn

Learn what exactly?

Maybe how the mechanics of orders work - but there of no use whatsoever in helping you trade, because the most important part of the trading experience is absent - Money! It's trading money that creates pressure and you can't get that from a demo account. Try trading real money and it's a lot harder.

So when a broker tells you they can help you trade successfully with a demo account, don't believe them. 95% of traders who make money with demo accounts, burn their money in real time trading.

3. A Broker Can Give You Advice

Never ever take advice from a broker and have a broker assisted account and the reason is obvious:

If brokers could assist you in making money, they would do it for themselves and wouldn't need a salary! They would all be traders instead. Trading success comes from how you trade - your responsible for profits and your currency trading success - don't let anyone tell you any different.

What Makes a Good Broker?

Very simple these 3 points

1. Tight pip spreads

These should be as low as possible why pay more when you don't need to? Pay too much and that is subtracted from your profit and added to your loss hurting your bottom line profits.

2. Security

There is no point in having great services and fees and your broker goes bust! Check how long they have been in business, security of funds etc

3. Trading platform and support

Should be easy to use reliable and you should have 24 hour support.

The above is what a good forex broker should provide and if you want to be successful, avoid the forex broker myths enclosed and choose one based upon the above points.

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Forex Trading - Anyone Can Learn the Skills to Win, But 95 Percent of Traders Lose, Why?

It's a fact anyone can learn the skills needed to win at forex trading - but they don't and the reason why is, they neglect the major factor they need to learn to achieve forex success. Understand this factor and how important it is and you can win.

This is a simple equation for forex market success:

Correct Knowledge = Understanding = Confidence = Discipline = Forex Success

What's obvious about the above?

That your forex trading system or the system you use is not important, providing it's logical and based on trading the odds - but your understanding, confidence and the way you apply it is. You can have a good forex trading strategy and fail here's why:

How do most forex traders learn to trade?

They day trade, or they trade mechanical systems sold by vendors, with simulated track records and we have two problems here that are the route cause of trader losses:

1. Day trading is not the correct knowledge to learn - it doesn't work!

It's based on ridiculous assumptions i.e. you can predict what millions of traders will do in a day!

2. If you use a mechanical system you cannot follow it unless you understand how and why it works (ok most the forex trading systems sold on the net are junk) but even if you do find a successful one, you still have to follow it with discipline through periods of losses. You won't follow it, if you don't understand it or have confidence in it!

Learning the correct forex knowledge and getting a robust forex strategy together is easy - the hard part is applying it. Understand this - success rests with you, not your broker, friends, vendors or anyone else - YOU.

Many forex traders hate taking responsibility and cry like babies when they lose, its everyone's fault but theirs - but it isn't.

If they lose it's their fault.

Successful forex trading involves you getting and applying the right knowledge and applying it is the hard part. All forex trading systems lose, for sometimes weeks on end (and that includes the best) so you have to accept responsibility and have the confidence and discipline to follow your plan.

Why Its Forex Trading is so Hard and The Rewards so High?

You are trading against the market and it is always right and only you can be wrong. Your success is down to your market timing and how accurate you're trading signals are and that's it. Sure, the market will prove you wrong and sure the market will make you look stupid - but that's trading.

So if you understand the above, then your forex education is all about:

Getting a logical method that puts the odds on your side, having confidence in it and trading it with discipline, through good times and bad times.

It's easy to learn currency trading - but it's harder to get discipline however, if you accept this and want success, forex trading can reward you with a fantastic and sometimes even life changing income. Currency trading success is in your hands - are you up for the challenge?

If the answer is yes - welcome to the exciting and lucrative world of global FX trading.

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Forex Education - How a Group Of Traders Made Millions After Just 14 Days Training!

If you want to learn the right forex education then you need to study the story enclosed in this article. We are going to look at a group of traders who had no experience but with just 14 days training went on to make over $100 million in 4 years.

The story takes us back 25 years as legendary trader Richard Dennis set out to prove a point:

The Experiment

That anyone regardless of their educational background, age, sex or profession could learn to trade so he gathered together a diverse group he nicknamed "the turtles"

The diverse group consisted of an female auditor, an actor, a couple of professional card players and a security guard - so a diverse group.

The only thing they had in common was they had never traded before.

Dennis set them to work and in 14 days had them trained and they were given accounts to trade and the result was hundreds of millions in profit.

Dennis had proved his point - Anyone can become a trader if taught the right knowledge.

The Paradox

You maybe thinking - if anyone can learn to trade then why do 95% of traders lose their money?

You can learn the answer to this from the turtle experiment.

Dennis knew that teaching a method is easy but the problem is the trader must have the right mindset to apply the method - If you don't have the discipline to apply your method you don't have one.

He taught them a simple method - but also everything about it, terms of the logic behind it and why it works. This meant they could have confidence in what they were doing and the discipline to apply it.

Discipline the Key to Forex Success

A forex trading system is easy to learn, executing trading signals through is strong of losses is hard even for experienced traders. If you think it's easy try it and see.

The turtle experiment shows that trading success is open to all - regardless of educational background, age or sex. We all have a chance to succeed, what we make of that chance depends on our forex education and mindset.

More Info

You can read more about the experiment in Jack Schwagers excellent book Market Wizards and from one of the most successful "turtles" Curtis Faith in "The way of the turtle" where he outlines everything about the experiment and its application including the rules and the challenges the turtles faced.

Finally

The story of the turtles inspired me to trade over 20 years ago and I hope it inspires you as well.

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Mechanical Forex Trading Systems - A FREE One That's Made Massive Profits!

Of course, you can buy one of the numerous mechanical trading systems advertised by vendors (all with simulated track records) or you can use this one - that's FREE and made users millions. How it works is outlined in this article and it's a great way to make forex profits.

This system is simple so simple in fact that you will have no problem understanding how and why it works - don't confuse the fact that it's simple with its profit making ability. Some of the world's top traders have used it and made a killing.

The system was developed back in the seventies, to trade commodity markets by a trading legend - Richard Donchian, who is considered the father of modern trend following.

It was originally devised to take advantage of the four week cycle in commodity markets that also exists in currency markets.

It's called the four week rule and here is the rule:

Liquidate short positions and open long position when a price exceeds the highs of the previous 4 calendar weeks. Liquidate long positions and open short position when a price falls below the lows of the previous 4 calendar weeks.

How simple is that?

VERY - but back test it and you will see it works well on trending markets and currencies trend well. Its problem emerges when markets don't trend, so add this filter:

Eenter positions on the 4 week rule and exit the position on a shorter time frame. Time frames that are frequently used are 1 or 2 weeks. You then simply re enter on the 4 week rule.

That's it!

It works try it - but most forex traders won't use it - Why?

Because it's to Simple

Traders dismiss it straight away - but trading legends such as Richard Dennis have used it so you should consider it - if it's good enough for one of the greatest traders of all time - then its good enough for you.

It's not trendy

Today we have neural networks, Fibonacci systems, artificial intelligence and there more trendy and buzzy than this simple system. Traders like to think they can beat the markets, with trendy systems - but they can't.

It's Not Fussy about Market Timing

True - it doesn't buy market tops or bottoms and most traders are obsessed with prediction and of course prediction doesn't work - it's another word for hoping or guessing. This forex mechanical trading system works on the reality of price change and trades the truth - most traders hate doing this, despite the fact it's the only way to make money.

It's Takes Discipline to Follow

Most traders lack discipline and when a forex trading system is so mechanical and so un fussy about timing they can't do it and throw in the towel.

This mechanical forex trading system works and is based on breakout methodology which is a proven way to make money - if you use it, you will find that you have a free system that will beat 99% of the junk systems sold on the net, with worthless simulated back tested track records.

If you use this forex mechanical trading system you will get a head start on your way to long term profits.

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Forex Price Movement - Use This Simple Equation to Understand it and Win Big

Forex price movement - how and why exactly do prices move? Simple enough you might think but most traders have no idea about how and why prices really move if they did 95% of forex traders wouldn't lose! Let's look at a simple equation for market movement.

Here it is but its simplicity is deceptive...

Supply and Demand Fundamentals/ News + Investor Perception = Market Price

Now here are some mistakes traders make by not fully understanding the above - If you believe any of the following, you can say goodbye to your equity.

- You can day trade and win

- Markets move to a scientific theory

- Market tops and bottoms can be predicted in advance

- Buy low sell high is a good way to trade

- You rely on trading expert news stories

- You try and trade the fundamentals

ALL the above will see you lose - let's look at why:

Firstly, trading is an odds game, as humans are illogical and millions make the price.

Their all governed by emotions - you cannot hope to predict what they will do and furthermore - you can't do so in short time frames and that's why day traders lose.

Trading the fundamentals is not possible because they are unimportant - its how their perceived that determines the course of events and the price.

So how do you win?

As a forex trader forget about predicting its simply hoping or guessing there is no scientific theory of market movement - if there were, we would all know the price in advance and there would be no market. Forget vendors who tell you they can predict if they could they would be rich and wouldn't need your money!

Trading is an odds game but that doesn't mean you can't win you can.

The easiest way to trade is to use forex charts and simply follow forex price action, trading the reality of price change - no hoping or guessing, just trading the facts.

Fundamental news is discounted instantly in the price and you will see that on the charts - but you will see something more, how investors perceive the fundamentals and that's the beauty of forex charts.

You see the whole picture as it is, no hoping or guessing just the reality, as it is.

Now human psychology may not be wholly predictable - but human nature is constant and this will show in repetitive high odds chart patterns which occur again and again.

If you spot and act upon them you can make money.

So when looking at forex price movement remember, it is not the fundamentals that are important or the news - but how investors as a whole perceive the news.

If you understand the above, you will see why simply following charts and acting on the reality of price change can make you money.

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Forex Trading - Do You Have What it Takes? Answer These 10 Questions and See if You do!

So you want to win at forex trading? Well try answering the 10 questions below correctly - if you get them all right congratulations! You are on the way to entering the elite 5% who make big consistent gains.

1. Day trading is a great way to make money.

The correct answer is no. All short term volatility is random and you cannot win long term. That's why you never see a day trading record with a real time track record, it's always simulated. The same goes for forex scalping - it's a loser's game.

2. Trading is a gift and not something everyone can learn

The correct answer is no. Anyone can learn forex trading if they have the right mindset. This was proved by legendary trader Richard Dennis who taught 14 people to trade with no experience in 14 days and they went on to make millions.

3. A Simple trading system is better than a complicated one.

The correct answer is yes. As a general rule all the best forex trading systems are simple. There easier to understand, apply and tend to be robust. Make a system to complicated and it will have too many elements to break.

4. You can trade the news an expert opinion and make money

No you can't! This is rubbish, news is instantly discounted by the market and by itself does not determine price - people do. The events are unimportant its how people perceive them that are important.

5. You don't need to work hard - effort has no bearing on profitability

The correct answer is yes. You don't get paid for effort you get paid for being right with your trading signal and that's it. You can take 10 hours deciding or 10 minutes it makes no difference to your success.

6. Human nature is constant so you can use a scientific theory and predict

The correct answer is no. Human nature is constant - but you cannot predict it with a scientific theory. If you could we would all know the answer in advance and there would be no market? Forget predicting, you will end up with results that are as accurate as your horoscope!

7. Buying new highs is better than buying low

The correct answer is yes. Most new trends start from new market highs (breakouts) if you try and buy low you will miss most major moves.

8. Your Risk per trade is your anticipated gain minus your stop

No it isn't. This is one of the biggest misconceptions of trading, it's simply an opinion.

9. I can follow an expert and make money they know best

They may but the best answer is no. It doesn't matter if they have made money, you have to have the discipline to follow them and that's unlikely, if you don't have full confidence and understand their method. Keep in mind, if you don't have confidence in a method, you won't have the discipline to follow it. A good method doesn't guarantee success, you need the discipline to follow it - if you don't you have no method!

10. You Should Always be in the market in case you miss a move

The correct answer is no. You should only trade when the odds are in your favor and not trade for the sake of trading or hoping that you will be in the right place at the right time.

Got them all right? Then here is your bonus question!

Answer this question with no thinking and no pause:

My trading edge is (defined)

A trading edge is something you have confidence in, that can allow you to enter the minority of winning traders. Don't know what it is?

Sorry it's back to your forex education until you do - if you can't define it you don't have one.

Got all 11 right? Great your all set to enjoy currency trading success!

NEW! 2 X FREE ESSENTIAL TRADER PDFS PROFESSIONAL FOREX TRADING COURSE For free 2 x trading Pdf's with 90 of pages of essential info and more on Currency Trading Basics visit our website at: http://www.learncurrencytradingonline.com

Participants In The Forex Market

There are four classes of participants in the forex market. Those classes are outlined below.

Governments and central banks. The largest and most influential participants in the forex market are governments and central banks. Central banks are typically either a part of the government or are a quasi-governmental institution -- meaning they are partially private, while still subject to a greater degree of scrutiny and regulation than fully private entities. The Federal Reserve, the central bank of the United States, is one such example of a quasi-governmental institution, as it sets policy on its own, but its head is appointed by the President of the United States.

Governments and central banks are the starting point of money; they are responsible for printing currency, and are in charge of regulating its supply. Their ability to control the supply of money gives them immense influence over the value of currency.

Banks. Banks constitute the next most influential group of participants in the forex market. These financial institutions lend money and also act as "market makers" -- the intermediary that links buyers and sellers in a foreign exchange transaction. Local banks, such as the neighborhood bank that many individuals may go to, operate in the forex market on a very small level, but larger banks often trade a significant amount on a daily basis. Their trading volume gives them influence over the value of currency.

Hedgers. Hedgers are participants who use the forex market to reduce the risk they are exposed to because of fluctuations in exchange rates. For instance, a company that imports raw materials to make goods may find that its costs rise if its native currency (meaning the currency it uses to import raw materials) falls in value. To hedge against this risk -- meaning to protect itself -- the company may enter a foreign exchange trade that allows it to profit from its falling currency. Exchange rate risk is an increasingly important factor in our interconnected world, especially for multinational corporations. As a result, hedgers can exert influence over the value of currencies.

Speculators. The latest class of forex market participants are speculators -- those who exchange currencies solely with the intent of profiting from exchange rate movements, in much the same way that stock market traders profit from fluctuations in stock prices. Hedge funds, large investment firms known for their aggressive strategies, are the largest group of speculators. With the advent of the Internet and online trading, though, opportunities for individual speculators have increased as well. These individuals trade online in much the same way that individual stock traders do.

Collectively, these four classes of participants constitute all the players in the forex market. Their varying objectives and the roles they play ultimately determine the value of the currencies that all people use.

Simon Parth has been an active forex trader since 2002. He is the co-founder of InformedTrades.com, a community dedicated to creating a comprehensive free online school for traders.

Automated Forex Trading - Can It Work For You?

Trading the foreign exchange (Forex) market, it's a dream and reality for so many people. It can be a difficult nut to crack as well. Many, like me in my early days, are simply to scared to take the plunge while others just don't want to risk their hard earned money. I can relate to both of those reasons and they are both completely justified. However, there are ways to keep costs low and risk minimal and that is by using automated forex trading software.

What is Automated Forex Trading?

First off, there is no real way to trade Forex on complete auto pilot. It is always going to involve some work on your part and this is probably a good idea. After all, you wouldn't hand over your hard earned money to a plumber before your toilet was fixed. You can however automate the most difficult process in the whole act of Forex trading and that is deciding when to buy and sell.

There are several software packages out there that will do all of the analyzing for you and tell you exactly when to buy and when to sell.

Which Software Can Help To Automate My Forex Trading?

There are some different software packages that will automate your buy/sell process when trading. More recently there has been a software released to take care of this process. It has proved to be a very good way to generate signals for trading on virtual auto pilot.

Of course, if software isn't your cup of tea it is also possible to somewhat automate your trading by using a broker. You can pay the broker to give you buy and sell signals. However this can be a very expensive and is an ongoing cost. A broker will usually want to be paid monthly and once paid you will be stuck with whichever signals they send you.

Is It Dangerous To Use Software To Trade Forex Automatically?

I would not recommend using software that does the whole trading process automatically. The reason for this is that you have no control over when you are trading and when you aren't. This can be dangerous and can cause you to lose money quickly. The best option to take it to use some Forex automated buy/sell signal software like Forex Killer. Software like this will tell you when to buy and sell, but won;t do it for you. This is a much safer option

You can learn more about automating your Forex trading with software by clicking here. For more information about Forex Killer and how it can generate all your buy/sell signals automatically check out a complete Forex Killer Review

Automated Forex Trading Software - Is It Dangerous?

Have you ever heard the expression 'Guns don't kill people, I kill people'? What this is really saying is that guns themselves aren't dangerous but people are. A gun is just an object, but in the wrong hands it becomes a dangerous weapon. This may sound drastic but it is a good analogy for automated Forex trading software. The software itself is beneficial, but in the hands of someone who is unwise, it can be trouble.

What do I mean by that? To answer that question it's best to get an understanding of what the auto pilot trading software actually does...

What Does Automated Forex Software Do?

Some software creators will try to tell you that the best approach is to have software that does EVERYTHING for you. This approach isn't very good because you are oblivious to trades you might be making. While most trades will be profitable you have little control over what your money is doing and when.

A better system to automate your trading efforts is to grab some software that will tell you when to buy and sell. The automated part comes into play in that you don't have to do any analyzing. All of the processing is done for you and you will simply be given signals of when to buy and when to sell. From here all you have to do is contact your broker and organize the trade. Easy money :) . There are examples of this type of software at the end of this article.

The Disadvantages Of Using The Software

There are no real disadvantages if software of this nature is used properly. Automating your trading of the forex market can be a great way to cut down your time and increase your profits. However, it can be dangerous to blindly follow instructions of a machine. Use your own judgment and only ever invest in a trade you feel comfortable with. If you don't invest and your automated system was right on the money, don't worry too much because there will be a new trade right around the corner.

Always remember, no matter what market you are trading you cannot get emotion involved. This brings even the best traders unstuck whether or not they are using some auto pilot forex market software.

The Benefits of Using Forex Trading Software

There are no 2 ways about it, the benefits far outweigh the risks here. Perhaps the largest benefit is that you can spend less time analyzing market trends and more time spending the money you make. It can be an exact science to find the hottest times to buy and sell. Why bother with all that when you can have some tried and true software tell you when to trade currency pairs.

Another huge benefit with this type of system as opposed to a fully automatic one is that you can participate in what are known as dummy trades. That is you can see what would happen IF you were in. This is great because you can test the system first before investing actual money.

For automatic forex trading software you really can't beat Forex Killer. It is a new system achieving great results for many people all over the world. To find out more you can read a full Forex Killer Review