New Forex Trading Strategy

Friday, October 30, 2009

Why You Should Use An Online Forex Trading System.

By John Eather

What is an online Forex trading system? First off, Forex, Foreign Exchange or FX are all used to when describing the trade of currencies throughout the world. It is the biggest market out there with trades exceeding 3 trillion dollars a day. This type of trading is on done on the hopes of making a profit. A trading system allows you to trade these currencies over the internet.

Unlike the stock market, you have access to trading 24 hours a day seven days a week. Because there is always someone to trade with, you have superior liquidity.

There are several do's and don'ts in Forex trading. What are they? Well, pay close attention. These tips could save you some trouble.

Trading based on prior market history is what trading robots do. Don't use them to do your trading for you. Everyone would use them if they earned you money.

Knowing that not every trade is going to be a winner is important. You are going to have some losses. Telling the future is not possible so, make sure the odds are in your favor with every trade you make.

You have a brain so use it. Don't let a piece of technology tell you when to buy or sell. You may see green or red lights but use your head to think the trades through.

About your broker, they are salespersons, the more you trade, the more money they make.. In Forex trading this is known as the spread. Don't believe that they don't earn a commission. The spread and commission are one in the same.

I was sitting in front of a computer for hours on end is not living. It is also not going to help you. In fact, it could harm you. You will eventually burn out on it or start doubting your decisions. So, spend on average about 20 minutes a day performing your trades. Take the rest of the day and do something you love to do like spending time with friends or family. Things like that.

Don't wait for someone to tell you that the economy is okay before you start trading. This has nothing to do with currency trading or your earning potential with Forex. Becoming a successful trader by following certain rules, you learn that you control the risks you take. When you are in control, the earning potential is there regardless of the market. - 23305

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Stop Loss Rules Explained

By Ahmad Hassam

When adjusting your stops due to an increase in trade size, always move the stops closer to your current position. An increase in trade size is usually caused by adding on or scaling in to a winning position. This lowers the risk in relation to your larger trade size.

Many traders want to know about moving stops based on different time frames. As a rule, always set your stops on the same time frame as you entered your trade. For example, if you had used a daily chart to enter your trade, use the daily chart to set your initial stop.

For day traders there is a risk when holding a trade overnight. In day trading, you are supposed to close your position at the end of the day. Sometimes an opportunity arises and you decide to continue the trade overnight. There is always a possibility of unforeseen event occurring during the night.

In stock trading, unexpected event may create a gap open. This may adversely affect your account value. Suppose you are trading a 15 minute time frame. Therefore your stop loss and position size are based on the 15 minute time frame.

5 minutes before the close of the day, your trade is profitable and you see much more profits if you hold the position overnight based on your 15 minute chart. How do you decide to take the decision to let the trade continue overnight?

When deciding whether to let the trade continue overnight, consider the following 5 rules. 1) The 15 minute chart must indicate a solid trend in place. 2) You should place a new stop loss based on your daily chart. 3) The trade must currently be profitable. 4) Your risk should be no more than 2% of your trading account based on your new adjusted stop from the daily chart. Reduce your trade size. 5) When the market opens the next day, be sure to monitor your trade.

The better your stop strategy is, the more profitable you will be. So it is crucial from the profit point of view to refine your strategy. The most common thing that can happen in case of a poorly placed stop loss is that you will get stopped out on a correction. After being stopped out, the market will race back in the direction you were initially betting on.

Dont forget, repeated stops will add to your commission fees and spreads making your trading cost higher. Now you should keep this in your mind that there are no perfect stops. There is also no way to time the market perfectly. Your goal should be to get the probabilities in your favor by choosing a risk/reward ratio of at least ". This risk to reward ratio will also tell you about the placement of your initial stop loss. - 23305

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The Penny Stock Broker Is Your Side Kick

By Malcolm Torren

One of the most fragile and information-sensitive investments are penny stocks. They are less liquid compared to other investments. The stocks are prone to fraudulent activities both online and offline. Stock prices are difficult to price accurately thus lure in scheming opportunists. Also, there is lack of information in companies that sell their penny shares. With all these potential risks mentioned, you need a best friend in the business. The penny stock broker can help you with your investments.

Brokerage firms act as the middle ground between stock buyers and sellers. If a company sells the stocks, someone has to buy it. The penny stock broker will facilitate and the transaction is completed. But in practice, this is not as easy as it is described here. It's much more complex and requires special stock market intelligence. This is like an advanced buy-and-sell procedure where investors win and lose everyday.

- What can these brokerage firms do for you? Movies about big corporations usually have scenes of a major stock exchange. It would seem like everything in the trading floor is messed up. On the contrary, it is very well in order. If a small cap company sells shares at a low start and someone buys them, the brokerage is behind the dealings. The penny stock broker is like the gatekeeper of your stocks. They guard your investment safely from market manipulations.

- What about leverage? The greatest advantage of working with a penny stock broker is that they are the most exposed entities in the business. They understand the loops inside and out. They can give you sound advice on what stocks to buy, when to buy them, and how. Of course they would also advice you what stocks to sell, when, and how to sell them. Whether you win of you lose, they will always be your ally.

- What if you lose, will they lose too? No. A penny stock broker is not the investor. They are the middle men and technically speaking, they don't have any interest that contradicts yours. Therefore they don't have anything to lose or profit. What they are providing is service. They do you a favor of facilitating your investments hoping that you will profit and they will get a commission.

- Can they make money out of your loss? If your stocks fell and you didn't make any money, they get the commission elsewhere. The penny stock broker survives and sustains their service by handling many clients. So they're basically a service oriented firm with a list of clientele. You are one of them.

- Will it be fair if you lose while they still earn? Honestly, yes it is. But most of these brokerage firms advice you to spread your investments to as many share to many companies as long as you can still afford it. So that way, if you lose from one investment, you might gain from the other. That's another way to make a good bargain. And you may have another broker to assist you with your other investments.

A tip for you, though: many ambiguous claims of cheap stocks pretend that he or she is a legit penny stock broker. Shares are lowered to the most affordable rate because of the fact that penny stocks are priced inaccurately. If this happens, check on their track record if there's any document available. Report any activities of this kind to the SEC. - 23305

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Important Ivybot Review

By Terry Simms Ivybot

Finding one that will work for you will require some research because there are a lot programs out there that promise things that do not deliver.

What Ivybot has done, is taken the older Forex trading software and just made it better. One thing that Ivybot has done is given you the ability to trade four different currency pairs with four different robots.

Based on the features alone, Ivybot looks like a winning piece of software. It looks like there are some really smart people behind the creation of this software. Because if you just look at the feature list alone, you'll be really amazed by what they have been able to put into the system.

Just a few years ago it wasn't possible for regular people like me and you to get software like Ivybot that could trade on the markets for us automatically. I can remember driving miles to a friend's house because he was so good at trading the Forex markets just to see if I could learn some secrets from him.

These new software programs are being used by some of the most experienced traders, and have caught on with some of the new and inexperienced traders as well. So as you can see technology has come a long way in the past few years creating more successful opportunities for people trading the Forex.

There are a few tips and tricks that I've learned from very successful Forex traders that you won't find in any manual or e-book. These tips and strategies are what could turn a small return on investment to a huge ROI based solely on embracing these strategies.

So many people have so many different strategies and that is why you see some make money and some not. Some people who don't make money, have a problem with emotion trading which can cost you dearly. By using the software to get in and out of trades it has virtually taken the emotion out of trading.

A great benefit to using automated Forex software like Ivybot is the fact that it basically can limit any losses that you may have. When you're trading manually, if you don't know what you're doing, all of your funds could be lost from your account overnight.

A buddy of mine that's a Forex trader said it better than I can say it. He said that being able to use automated trading software like Ivybot allowed him to make profitable trades without having to learn every single technical aspect of Forex trading.

If you are an experienced trader then you know that there are a lot of trades that you will get into that may drop a bit upfront but rally late to make a profit. If you are trading yourself it is very easy to make a judgment call to get out of a trade to early costing you a lot of money.

You see because of the time difference for all of the foreign exchange markets, you will be able to trade 24 hours a day and at 6 days a week. One thing you will be able to do is make money while you sleep but you will also need to make sure that you keep the program properly maintained.

In most trading platforms it will require quite a bit of money to get started, however with Ivybot you can get started with as little as $250. From observing people who are successful trading, when the profits come in its best that you add more money to your account. This will allow you to fund bigger trades that yield bigger profits. The objective to creating software that can get your started with minimal money is to attract new traders to use it.

There are a lot of experienced traders who will take on programs like Ivybot and fail miserably trading. This is because most people who know a lot already about trading the software tend to take to much control of their trades. The best thing to do is to let the software do its job and leave your experience out of the picture.

So taking a look back at this article if you are looking to trade the Forex market, using Ivybot is a great way to go. This program will allow your trading to become more consistent. - 23305

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Learn about Sugar Commodity Trading, Follow Sugar Commodity Markets

By Marianna Gomes

Traders looking at sugar commodity trading as a way to gain exposure to commodities as an asset class have some great opportunities, particularly with global agricultural prices looking set for long term increases. In the early 1970's sugar prices surged over 60 cents a pound and by over 40 cents a pound in the early 1980's at the tail end of the 1970's commodity bull market. Following the adverse impact of the global economic crisis in 2008, commodities in general and sugar commodity prices in particular are advancing strongly again, with sugar prices are at their highest for 28 years.

There are numerous cases of serious sugar shortages as desperate consumers across Asia queue for small quantities of this key commodity. To think that while in 2007 India was a major exporter of sugar, with a surplus of five million tons, but from 2009 the country is a net importer. So what has caused this serious imbalance between world sugar demand and supply? After the shock of the global economic crisis, the US dollar is falling against other currencies and hopes of a strong rebound are causing real asset prices to be driven higher. Add in the weak monsoon season in India and very unhelpful weather for sugar plantations in Brazil, impacting adversely on sugar yields, and the result is raw sugar prices heading for a high of 25 cents a pound.

As part of our sugar commodity trading analysis, let's see where sugar comes from, in what forms and at the new dynamic that promises to make a profound change to future world sugar commodity markets. Sugar is produced in over 100 countries worldwide, with between 75-80% made from sugarcane, mainly in tropical and sub-tropical areas in the southern hemisphere. A key factor in successful crop yields is rainfall, with an annual minimum of around 600 mm. Apart from adverse weather conditions, another factor that can cause sugar prices on world commodity exchanges to rise is crop infestation by pests.

The top producing nations are Brazil, which is also the largest exporter in the world, India, China, the EU, USA and Australia. One key factor which distorts world sugar markets is the subsidy regime in the US and Europe, which supports producers by giving them prices higher than the world price. Sugar is used in a range of fruit and vegetable formulations, in bread fermentation, and increasingly as source material for ethanol fuel.

Moving on from 2007 when there was already very little room between supply and demand, the situation will almost certainly deteriorate with an expected demand surge in emerging BRIC nations particularly China and India. In fact India as the largest consumer in the world is now using significantly more sugar for ethanol as an alternative fuel. Meanwhile, starting from a very low base of 7kg annual per capita consumption is China, and as the world's third largest consumer and producer, is still some way behind the annual USA per capita demand of 45kg.

You will help your sugar commodity trading strategy by getting to know about the Brazilian market, the largest world producer. This country's strategy is to avoid a sugar glut by taking any surplus sugarcane crop to produce ethanol for biodiesel for export and domestic consumption. More sugar is being channelled for ethanol as crude oil prices rise, along with sugar demand surges in China. There are major challenges for sugar producers going forward, given the likely high crude oil prices in future coupled with growing demand, seeing sugar prices remaining high.

With your chosen commodity trading system and advice from your professional financial adviser, you can trade from almost anywhere in the world with good internet access. #11 Raw sugar futures is the most heavily traded sugar futures contract in the world, available on the ICE US Futures platform as is the #16 Sugar futures contract. Alternatively, you can trade raw sugar futures on LIFFE CONNECT, the trading platform of LIFFE, part of the NYSE Euronext Group. Also look at soft commodity indexes using an ETF which may not involve taking a leveraged position. With the growth in bio ethanol demand and sugar consumption in the BRIC economies, prospects for sugar prices and sugar commodity trading look very exciting in the years ahead. - 23305

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