Learn To Trade Forex Majors.
January 26, 2012 by Rick T
Filed under Featured, Forex for Beginners
Learn To Trade Forex Majors like the Euro During Active Hours
North American trading hours tend to be the most difficult to trade in due to the high level of volatility in the market. Breakout trading strategies tend to do relatively well in volatile environments, so if you plan to trade during these times, look to trade breakouts. Our past research shows that traders could be well-served restricting their trading to less-active trading hours, as general trader profitability tends to improve when markets are less volatile. But what if you can’t trade when it’s quiet? For traders who feel the need to be in the market during the more volatile times, here is some advice about how to learn to trade forex majors.
The chart above emphasizes that FXCM clients tend to do poorly in the 5 most popularly traded pairs during the North American daytime making it vital to learn to trade forex majors. If we compare these results with measures of volatility, we can see that this poor performance seems directly correlated to sharp price swings, as this time of day tends to be the most volatile.
Learn To Trade Forex.
Learn To Trade Forex
The chart below shows the average hourly moves in pips for the EUR/USD, the most popular currency pair to trade. You can see that traders’ best results coincide with the times of day that have lower volatility, such as the Asia trading session.
Our previous article showed that the highly popular Relative Strength Index trading strategy produced significantly better risk-adjusted returns if we limited it to trade exclusively during the least-volatile hours of the trading day, 2 PM to 6 AM Eastern Time (New York). When you learn to trade forex majors you should ask “What Strategy Should I Use to Trade the US Daytime”? As mentioned before, we advise traders to trade during the lower-volatility times of day due to the risks that volatility present, and the better results we see in the range trading strategies that FXCM clients tend to use. Some traders may prefer to trade during the volatile US daytime, however. So, if you’re going to do that, make sure that you use the appropriate strategy at the appropriate time. Do not try to range trade. Instead, do the opposite: trade breakouts.
Learn To Trade Forex. What is a Breakout?
A breakout is when a currency that has been trapped in a range or channel on the chart breaks through support or resistance, escaping the channel. When this happens, the movement in prices tends to be very powerful, and can create a trading opportunity. Here is an example where the EUR/USD Daily chart had a channel for two months. You can see that when this channel broke, the move was swift and powerful.
Learn to trade forex breakouts
Trading breakouts is almost the exact opposite of trading ranges. When price moves upwards through resistance, look to buy. When it moves downard through support, look to sell. In the above example, a range trader would have tried to sell at the top of the channel and would have likely lost money. A breakout trader would instead have looked to buy. Sample Strategy: Channel Breakout The Channel Breakout strategy is quite straightforward and has performed fairly well historically. the system draws a channel surrounding price action, with the top of the channel set at the highest high and the bottom set at the lowest low of the past twenty bars. In the chart below, you can see the top of the channel in light blue and the bottom of the channel in red. The green dotted line shows profitable trades made by the system, while the red dotted line shows losing trades made by the system.
We sell the currency pair if the price breaks below the channel bottom. If price quickly reverses, we will be taken out of the trade at a loss. Yet if price continues lower, we stand to see profits on the continued moves. Thus we can conceptualize this this trade system might work especially well during times of high volatility, when channels tend to be broken. Let’s test by looking at how well it has done on the Euro/US Dollar in the past several years:
Learn To Trade Forex Channel Breakout Strategy on EURUSD Pair from 2001-2011, 60min Chart 
Learn To Trade Forex Channel Breakouts
The channel breakout system did reasonably well overall, and especially well during times of strong market volatility in late 2009. Yet it has also had long stretches of under-performance and noteworthy losing streaks. Since we know that breakout strategies tend to work better during times of higher volatility, how can we instruct our system to trade only during those times? When Should I Look to Trade Breakouts? Every day, we publish Volatility Percentile figures on the DailyFX Technical Analysis page for reference. The Volatility Percentile is derived from FX options prices. The higher the number, the more volatile options traders expect the currency pair to be. We can use these volatility percentages to judge when it is best to use particular strategies. When volatility percentages are high, we look to trade breakout strategies. When they are low, we look to avoid them. 
When looking at the Channel Breakout strategy above, a quick optimization shows that the strategy improves noticeably when we apply filters. We simulate two cases below. In one case, the strategy is only allowed to trade when our Volatility Percentile is above 50%. In the other, it is only allowed to trade when it is above 75%. As you can see in the chart below, in both cases we see better overall results than the “base case” of letting the system trade at any time. 
With the 50 percentile filter, the strategy is allowed to trade about half the time. With the 75 percentile filter, the system can only trade about 25% of the time. Over time, the 50 percentile filter has been shown to prevent many of the losing trades in the system, while preventing only a few of the winning trades. This has produced the best historical returns on an overall final net-profit basis but has also shown significant losing streaks. With the 75 percentile filter, prevents even more trades – both good ones and bad ones. While the overall result over the past six years has not been quite as good as the 50 percentile one, there were few times of significant losses. Indeed, when we fully take risk into consideration, we prefer the 75th percentile filter, as it makes rather fewer losing trades and we are glad to fore-go some potential profits in order to lower our risk of potential loss. Game Plan: What Strategy Should I Use? When volatility is above 75%, trade using a breakout strategy.
Our data show that over the past 10 years many individual currency traders have generally been unsuccessful trading in times of high volatility. As we spoke about in our earlier article, we generally recommend trading European currencies during the “Off Hours” using a range trading strategy, as this approach tends to produce good results and best matches how most FXCM clients trade. Traders who feel the need to trade during times of high volatility should use a different strategy and look to trade breakouts rather than ranges. Breakout trading tends to show the best risk-adjusted returns if limited to the most volatile trading days.
We can use the DailyFX Volatility Percentageto easily gauge what FX options traders expect for volatility in the near future. When above 75%, breakouts are significantly more likely than normal, so look for opportunities. DailyFX Resources for Successful Breakout Trading The DailyFX Trading Instructors have years of experience trading the markets and helping thousands of new traders learn forex. Here are a few of their many tips that can help you breakout trade better: How to Trade a Breakout Strategy on the EUR/USD Exclusive for FXCM Clients: Sign Up for Live Classes FXCM Clients can take free interactive classes via the DailyFX PLUS Trading Course.
Model Strategy: Channel Breakout Trading on a 60 Minute Chart For our models, we used one of the most common and simple breakout trading strategies there is, creating channels on a 60 minute chart. Entry Rule:When price crosses above the highest price of the last 20 bars, buy at market on the open of the next bar. When price crosses below the lowest price of the last 20 bars, sell at market on the open of the next bar. Filter: Strategy can only enter new trades when the Volatility Percentage is above the specified level (such as the 50% or 75% examples used above). Exit Rule: Strategy will exit a trade and flip direction when the opposite signal is triggered. As was shown earlier, in the EUR/USD this strategy has shown the best risk-adjusted returns in the EUR/USD over the past 6 years when it was restricted to trade only when the Volatility Percentage was above 75%.
Forex Trading Risk
January 19, 2012 by Rick T
Filed under Featured, Forex for Beginners
Forex Trading Risk. Minimize Yours Through Forex Training
There are many ways to fail in trading and investments. Unforeseen market fluctuations, lack of experience, unpredictable political changes (as well as a faulty internet connection) can all reek havoc with a first time trader. But once equipped with proper Forex training you can begin to minimize this risk, and turn potential pitfalls into gains at every turn.
How To Handle Forex Trading Risk
You’ll soon see the benefits, too. Apart from the fact that the Forex market never sleeps, you’ll also be able to cash in on both rising and falling markets. It sounds like a fantasy, but since currencies trade in pairs, a good investor can make as much by selling a particular currency as buying it. But, remember, the forex trading risk is always in the back ground.When you buy (go ‘long’) you are in fact be able to sell (go ‘short) the other half of the pair. One value increases as the other goes down. It isn’t quite as simple or straightforward as it sounds, but that’s where training in Forex comes in. It will help you to spot the right currency to go long with and the right one to go short, anticipatory of the changes and entry/exit time.
Once fully trained, you’ll also benefit from the famously low transaction cost which Forex boasts for its investors. There is generally no brokerage commission cost with this kind of set-up. There is the added bonus that Forex is not directly correlated to the stock market – it deals purely with individual currencies and how they contrast. The foreign currency market has little to do with the stock market, and as long as the outlook is positive, a currency change can always be converted into successful buying or selling for the trader in question, regardless how the market appears to a casual observer.
Forex training will introduce you to the foundation of this market – its international conglomerate of traders and dealers. They consist mainly of multinational banks in touch directly with their dealers and holders through the internet and telephone. As such, there are no physical environments to act as the market floor, which usually tie any trading post (such as the New York Stock Exchange and its relationship with the equity markets) to the problems faced by non-digital, real-time organization. Forex succeeds precisely because of its 24/7 status, and has come to be known as an OTC (over-the-counter) market, much like NASDAQ. As an investor, you will soon discover the tactical benefits of this approach.
Forex Trading Risk. They Are Real!
As a Forex trader, you will also be struck by the fact that no one can corner or alienate certain aspects of the foreign exchange market. Because the business is so large, with so many participating members, there is very little chance of an individual – even a group of companies – holding sway over one portion of the marketplace for any sustained period. This is truly a trader’s market and the forex trading risk must be addressed. Once you begin your Forex training, you’ll get used to the countless benefits and wonder why you didn’t take the plunge before! However, it is important that you understand the forex trading risk!
Margaret Dorsey has over 35 years experience in the legal field and she has been an active member of the Forex Training community since 2005 and knows that forex trading risk can hurt new fx traders.. She enjoys helping individuals develop and hone their online trading education and skills. Her firm belief is anyone can be an accomplished self-starter and develop multiple streams of income.
Forex Trading For Beginners
January 18, 2012 by Rick T
Filed under Featured, Forex for Beginners
Forex Trading For Beginners (Forex mindset strategies)
Forex traders who are just often begin search quickly using. You want training or strategies that can help them “$500 in $5000″ or a “part-time income full time income”. Let’s face it; most of this is superficial talk.
Beginners have no idea what you are looking or how to Trade Forex. Still, they know that a scam if see it, and it is only their self-control, which turn them away from something bad or in a trap to lure. They want to learn a good trading strategy to find while they are open to new things, but self-government may be absent, to say it.
The problem for Forex Trading For Beginners is that they find someone they can trust and they probably cannot be trusted. Forex trading is all about confidence. As well as the powerful dollar tells Bill; “In God We Trust,” we must learn to follow something that we can be sure. The problem with trading Forex is that you find God in all that you see, because you are only a beginner. You must find a way, before you can find a way to learn trust. This takes time.
Good Forex courses will always try to earn your confidence before you to take your money. It will make no million wild promises and elicit you in something, before you are ready. Confidence to take as their teacher begins, an interest in their own learning experience you interest you.
Forex trading is also about collecting “Interest.” This trade means only on a loan but “Interest” person not “interest”. If you “” you are interested in Forex, look, learn, practice and ultimately start doing. “Interest” is run. As long as you keep the interest alive and only small amounts of your capital to invest, will continue your interest grow, and so will your money. Be very careful about who you give your interest at the beginning of training of Forex.
The most important currency for Forex Trading For Beginners, you have is your own time and attention. Spend it wisely! Read, read, read what has to do with Forex more about anything and everything.
Take time as a beginner in Forex trading. Let the people who earn your trust in the course of time to speak. What the best Forex consultants offer Forex Trading For Beginners you are and that’s what we offer you, if you have your wonderful journey into the world of Forex trading started. Good luck and happy trading!
Kishore M:Bloomberg & BBC interviews. Interview videos: http://www.ifxprofits.com/media.php
Like detailed with you & for Forex strategies instead of Forex share knowledge. Trained more than 100,000 Forex students around the world on Forex trading strategies & fx day trading strategy.
Profitable Forex trading strategies Forex Trading For Beginners see video here: http://www.ifxprofits.com
Forex Trading – The 80 – 20 Rule Gives You Bigger Profits
January 11, 2012 by Rick T
Filed under Featured, Forex for Beginners
Forex Trading – Why Learning the 80 – 20 Rule Can Give You Bigger Profits
Forex trading and the 80 – 20 rule is a simple rule which is used I many areas of life and if applied to Forex trading, can make your Forex trading strategy more profitable. Let’s take a look at it…
The 80 – 20 rule in business means, that 80% of your profits will probably come from just 20% of your clients. In Forex trading it means, that 80% of your profits will come from just 20% of your trades; this leads to an obvious conclusion:
You don’t need to trade a lot to win; you need to trade with the best odds of success.
Let me ask you a question about forex trading.
How many times per year do you think you need to trade to make triple digit profits?
The answer is not many, if you focus on the high odds trades! I know traders who trade less than once a month, and turn in huge triple digit gains.
They don’t focus on trading often, they simply trade the best set ups and if you do, t your trading profits will increase, your risk will decrease and you can spend less time on your trading.
You don’t get your reward for trading a lot in Forex trading; you get rewarded for being right with your trading signal and the size of your profit per trade.
If you focus on the big trends which last for weeks, months or even years, you can get in and hold them and make huge gains.
Think about it:
Most traders trade to much. They day trade or they try scalping small profits and don’t get very far – but if they focused on getting in on the big long term trends and holding them, they would make bigger profits with less effort.
So to win apply the 80 – 20 rule.
Cut back your forex trading frequency and increase your profit potential. It’s a simple, common sense rule that works and will lead you to currency trading success.
FREE! ESSENTIAL FOREX EDUCATION
CATCH THE BIG TRENDS NOW!
Get essential Forex education, courses, systems and some FREE Forex Trading PDF’S by visiting our website at: http://www.forextrendfollowing.com
Risk Reward Ratio
January 8, 2012 by Rick T
Filed under Forex for Beginners
Risk Reward Ratio Validation
In our Money Management webinars we mention that a significant aspect of the rules is to always trade with at least a 1:2 Risk Reward Ratio (RRR) in place. A key aspect of this is how is a trader to know that the currency pair at least has the potential to move far enough to make the RRR valid. Let’s take a look at the Daily chart of the EURNZD below…
Trade Rationale: At the time of this chart we can see that the bias on the pair is bearish as the pair is trading below the 200 SMA and the Strong/Weak analysis showed that the EUR was weak and the NZD was stronger. As such, we would look for technical opportunities to short the pair. Price action has been stalling just above support around 1.7080…the green line labeled Enter. Should price action take out that support level, 1.7080 or, better yet, CLOSE below that level, a trader could short the pair with a stop just above some of the recent consolidation…the red line labeled Stop. Since our stop would be around 1.7295 and our entry was at 1.7080, the risk we are taking on the trade is 215 pips…the distance between our entry and our stop. Now let’s bring our 1:2 RRR into play. Since we are risking 215 pips we need to have a realistic potential of gaining 430 pips on the trade…twice the amount we are risking.
As we look at the chart again, since there is virtually no support between our entry and our limit, we see that we have a potential gain of 590 pips…the distance between our entry and the next level of support on the Daily chart. As such this trade more than meets the 1:2 Risk Reward Ratio requirement. In fact, the RRR on this trade is 1:2.7. (However, keep in mind that even though the pair legitimately has the room to move around 590 pips, does not mean that it actually WILL move 590 pips. Nothing in trading is guaranteed.)
Written by Richard Krivo, Trading Instructor To contact Richard Krivo, e-mail rkrivo@fxcm.com. Follow him on Twitter at @RKrivoFX
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Trend Line Resistance Offers EURCAD Short Opportunity
January 6, 2012 by Rick T
Filed under Forex for Beginners
By Jeremy Wagner, Lead Trading Instructor 16 December 2011 19:50 GMT 
The EURCAD is approaching trend line resistance offering a selling opportunity near 1.3550.
On a recent TV interview I was asked why the Euro has been holding up despite their sovereign debt crisis. My response was that if you strip out the USD, the Euro has been in a down trend against the other currencies like AUD, NZD and even the CAD. With trend line resistance approaching on the EURCAD, this offers an opportunity to align our trade in the direction
of the trend. Therefore, this allows us to sell the Euro-Zone risk.
(Created using FXCM’s Marketscope 2.0 charts)
To learn more about the importance of trend lines, constructing trend lines, how to use them to identify entries, watch this video from Las Vegas: Using Trend Lines to Optimize Entries Additional Resources Support and Resistance Chart Reading 101 The Professional Trader’s Friend: Trends —Written by Jeremy Wagner, Lead Trading Instructor, DailyFX Education To contact Jeremy, email jwagner@dailyfx.com. Follow me on Twitter at @JWagnerFXTrader. To be added to Jeremy’s e-mail distribution list, send an email with the subject line “Distribution List” to jwagner@dailyfx.com.
DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.
16 December 2011 19:50 GMT
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Online FOREX Trading Course
January 6, 2012 by Rick T
Filed under Featured, Forex for Beginners
Online FOREX Trading Course – Learn FOREX Trading Properly and Prosper
An online FOREX trading course can be a great tool for those looking to participate in the FOREX market. FOREX has become very popular because most trades occur online whereas in the past much of the FOREX trading occurred over the phone. The internet has made it possible for everyone to use the FOREX market and not just large financial institutes.
There are a number of different online FOREX trading courses that can provide you all the information you need to become a FOREX trader. There are both free and paid courses and you will need to take several factors into account when choosing a FOREX trading course.
You need to see who the individual is offering the course. Are they an expert in the field or just writing who wanted to publish a book? What type of course are they offering? Many courses come in the form of a book while others may be a series of videos or lessons. If it is a free site try to find out why they are providing this information for free.
You need to be careful with free online FOEX trading courses as many times they will be pushing you to use one specific site or you may have to enroll in a specific program. Many times a book may push you to use a specific system or program. It is important you answer these questions as many times free information may not necessarily be honest.
So it is recommended that instead of using free online FOREX trading courses you use the courses that are available in the form of articles and advice. Many sites are dedicated to FOREX information and by just going though all they have to offer you will find yourself on a trading course.
The individuals who write these articles are experienced FOREX traders and they can provide some of the best information available. The best online courses are the ones that are not limiting, for good courses you should see what established companies have to offer.
Are you ready to become a Forex trader?
Sign up for John Eather’s Free eCourse on online forex trading course.
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Go to http://www.MoneyMakingFxTrader.com to get more details.
Using Engulfing Candlesticks in Your Trading
January 2, 2012 by Rick T
Filed under Forex for Beginners
Keep in mind, as is the case when interpreting candlesticks, a trader cannot make a decision regarding what a candle might be until that candle is closed. For example, the last candle on the right of the chart at this point looks like a bullish engulfing. However, when the 4 hour period closes and that candle closes along with it, based on price action between now and then, that candle may turn out not to engulf the previous candle at all. Always wait for a candle to close before making a trading decision based on it. One strategy that can be used when an engulfing candle is identified, is to only take a trade when the candle signals a potential change of direction when that change is in the direction of the trend. In other words, in a downtrend we would look for bearish engulfing candles and in an uptrend we would look for bullish engulfing candles. Should the trade be taken, the stop would be placed below the bullish engulfing candle in an uptrend and above the bearish engulfing candle in a downtrend. Lastly, take note of several engulfing candles on the chart where a move in the opposite direction did not take place after the engulfing candle closed…nothing is ever certain. For traders with a live trading account, click HERE for additional lessons on Candlesticks. Put in your live account username and password and scroll down to Candlestick Patterns. — Written by Richard Krivo, Trading Instructor To contact Richard Krivo, e-mail rkrivo@fxcm.com. Follow him on Twitter at @RKrivoFX
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A Basic Trend Trading Strategy
December 29, 2011 by Rick T
Filed under Forex for Beginners
By Richard Krivo, Trading Instructor 29 November 2011 23:31 GMT
A Basic Trend Trading Strategy
Once the trend of a pair has been determined, a very straightforward trading plan in a downtrend would be to sell at a break of support or sell at resistance. Take a look at the 4 hour chart of the EURUSD below… 
Since this currency pair is in a downtrend, the higher probability trades will be in the direction of that bearish trend so we would be looking only for opportunities to sell the pair. With that in mind, a trader could wait for price action to break or close below the support line and then a short position (sell) can be taken at that point with a stop above the resistance line.
On the other hand, if price action is hovering around the resistance line (as it is on the chart above) or if it simply “wicks” above the resistance line but does not close above it, then a short position can be taken at that point. The stop again would be placed just above the resistance line.
Also on the chart, notice how Slow Stochastics can provide insight as to timing an entry into the direction of the trend when price is at the resistance line and momentum shifts to the downside. Should the pair in question be in an uptrend, the above process would be reversed. We would buy at support or buy at a break or a close above the resistance line. —
Written by Richard Krivo, Trading Instructor To contact Richard Krivo, e-mail rkrivo@fxcm.com. Follow him on Twitter at @RKrivoFX
DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.
View the original article here
How Trailing Stops can assist with Trade Management
December 28, 2011 by Rick T
Filed under Forex for Beginners
Created with Trading Station 2/Marketscope As you can see from the above illustration, as the position continues moving in the trader’s favor the stop is continually adjusted higher; locking up additional gain as the stop is progressively moved higher. If the currency pair retraces beyond the stop value, the trade will be ‘activated,’ and the position closed. The hope of using the trailing stop is that the move will be strong enough to adjust the stop far beyond where I may have initially looked to take profits; allowing me to garner an additional gain. The trailing stop can be performed manually, by the trader adjusting the stop progressively higher as the trade moves in the money. Alternatively, the trailing stop can be automated on the Trading Station 2 Platform. When setting stops, the box for ‘trailing,’ allows the choice between a ‘Dynamic,’ or ‘Fixed,’ trailing stop. The Dynamic Trailing stop will adjust the requested stop value higher for each 1/10th of a pip movement in the trades’ direction. The Fixed Trailing stop will adjust when the pre-determined pip-move takes place. For instance, in the below graphic while opening a market order, I’ve added a ‘Fixed trailing stop,’ of 10 pips, set at 3500 on my short position. When my short position is 10 pips in the money, the stop of 3500 will be adjusted 10 pips in my favor (3490 would be the next level since this was a short position). 
Created with Trading Station 2/Marketscope Additional resources: DailyFX PLUS Online Video Course – Money Management Lesson 1 Clarifying the 5% Money Management Rule In-Trade Management To contact James Stanley, please email Instructor@DailyFX.Com. You can follow James on Twitter @JStanleyFX. To be added to James’ distribution list, please send an email with the subject line “Notification,” to Instructor@DailyFX.com.
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