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ForEx Strategies

ForEx Strategies

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Published by Nick Mills
http://wealth-masterminds.venicompanies.com
http://wealth-masterminds.venicompanies.com

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Published by: Nick Mills on Dec 15, 2011
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04/25/2013

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Wealth Masterminds Societyhttp://wealth-masterminds.venicompanies.com Wealth Masterminds Societyhttp://wealth-masterminds.venicompanies.com 
Forex, A Trending Market
Forex Trading
Wealth Masterminds Society - $1 Teaches You Some Of Warren Buffet's Secrets In Investing! Join Today! First of all, what is Forex? It is a short version of FOReign EXchange. It is also called FX and 4X, butregardless of the name you use, it is the largest financial market in the world. From 1997 to the end of 2000, daily Forex trading has skyrocketed from $5 billion to over $1.5 trillion..
Let’s look at some reas
ons why Forex trading is rapidly gaining popularity over other markets.Trading hours: The Forex market is traded 24 hours per day from about 7pm EST on Sunday until about3pm EST on Friday. The stock market is only traded Monday thru Friday with limited hours.Liquidity: Forex markets trade over $1.5 trillion each day while the stock market only around $200billion. There are only 7 major currencies traded on the Forex while there are more than 40,000 stocksfrom which to choose.Commissions: No commissions are charged on the Forex while the stock markets charge highcommissions and transaction fees.Leverage: Forex Market offers great leverage power. Brokers usually offer from 100:1 to 400:1leverage. This means a trader using 100:1 leverage you control $100,000 with only $1,000 margin.Stock market investors pay full price for stock when purchased unless they have a margin account andthe leverage with margin is usually only 2:1.Low Minimum Investment: The minimum initial investment to open a Forex trading account is as low as$300. Most stock brokers require several thousand dollars as a minimum to open an account.This is the perfect market. Foreign Exchange trading has long been recognized as a superior investmentopportunity by major banks, multinational corporations and other institutions. Now the internet haspropelled Forex trading among private individuals tremendously. Trade from home, the office, orvirtually anywhere in the world. Trade virtually anytime day or night. Work part time or full time.It is obvious that the Forex Market offers a substantial opportunity to those willing to invest energy,focus, and a little money.It is difficult for a new Forex trader to become successful in the Forex market without understanding thebasics and how it works. This knowledge can be obtained in a free Forex training program.
 
Wealth Masterminds Societyhttp://wealth-masterminds.venicompanies.com Wealth Masterminds Societyhttp://wealth-masterminds.venicompanies.com The Forex market is widely known by its high liquidity and high volume of transactions occurring duringmost of its long trading week. These characteristics highly contribute to make the Forex market a verytrendy market with few trend-less periods during the whole trading period.But what does this mean to the Forex trader? Mainly this trendy characteristic of the currency marketsmeans that there will be plenty of opportunities for the trader to find profitable trades during the day.As you start analyzing forex charts you will realize that the market often display's some very familiarpatterns of price movement, this is; trends; and you will notice that once a pattern is established, itbecomes the most probable course of future price action until the market changes. Giving you a goodforecast of what comes next with the currency prices.There are two types of markets which will become very important for you to identify and understand;these are: trending and, the less frequent, trend-less markets. Each market type has two specificpatterns which you will also notice over time.A Trending market is defined as a steady, elongated price movements with less than a 45 degree anglewith occasional pauses, profit taking, or resting periods.In a Trending market, you will notice two main and quite evident patterns:Uptrends - A pattern of higher highs and higher lows.Downtrends - A pattern of lower lows and lower highs.There is also the less frequent kind of market, this is a Trend-less market with erratic price movementswhich are often steep (greater than 45 -degree angle) and cannot sustain and therefore must reverse.Although the movements can move many points in a short period of time, they are constantly andrapidly oscillating with the consequence that they often result in very little net price movement overtime.In a Trend-less market, you will find these main patterns:Choppy - An erratic pattern of higher highs and lower lows.Sideways - A narrow pattern of lower highs and higher lows.While up-trend and down-trend periods will offer excellent trading results most of the time, choppymarkets often create stop outs, this is they activate your stops by constantly overshooting your
 
Wealth Masterminds Societyhttp://wealth-masterminds.venicompanies.com Wealth Masterminds Societyhttp://wealth-masterminds.venicompanies.com projected resistance level but without never really crossing too far from this level; while sidewaysmarkets produce for little in either direction making them hard to trade and to make any profit duringthese periods.As always in Forex, your main trading objective is to get into profitable trades most of the time and atrending market is the perfect situation to find this profitable trades by riding the trends until you makeyour target profit objective of the day.
The presented article covers one of the most important (in author’s opinion) aspects of trading in
general and FOREX trading in particular
 –
managing of orders and positions. This includes choosing entrypoints, making decisions about exit points, stop-loss and take-profit of the trader. I hope this article willhelp new traders, who just began to work with FOREX, and also to experienced traders who traderegularly and regularly make or loose their money to the market.When I started to trade FOREX and made my first big losses and profits I began to notice when veryimportant thing about the whole trading process. While the right time to enter a position was rarely a
problem for myself (nearly 80% of all my open positions had gone into the “green” prof 
it zone), theproblem was hidden in the determining the right exit point for that position. Not only was it importantto cut my risk on the potential losses with stop-loss orders, but to limit my greediness and take profitwhen I can take it and make it as high as I can. There are many known guidelines and ways to enter aright position at a right time
 –
like major economic news releases, global world events, technicalindicators combinations, etc. But while the entering into a position is optional and trade can decide tomiss as many good/bad entry point moments as they wish, this is untrue if we talk about exiting aposition. Margin trading makes it impossible to wait too long with an open position. More than that,every opeChoosing the good exit points
for positions could be an easy task if only the FOREX market wasn’t so
chaotic and volatile. In my opinion (backed by my trading experience) exit orders for every positionshould be toggled constantly with time and as the new market data (technical and fundamental) appear.
Let’s say, you took a short position on EUR/USD at 1.2563, at the time you are taking this position the
support/resistance level is 1.2500/1.2620. You set your stop-loss order to 1.2625 and your take-profitorder to 1.2505. So now, this position can be considered as an intraday or 2-3 days term position. This
means that you must close it before it’s “term” is over, or it will become a very unpredictable position
(because market will differ greatly from what it was at the time you have entered this position). Afterthe position is taken and initial exit orders are set, you need to follow the market events and technicalindicators to adjust your exit orders. The most important rule is to tighten the loss/profit limit as timegoes by. Usually if I take a middle term position (2-4 days) I try to lower the stop and target order by 10-25 pips every day. I also monitor global events, trying to lower my stop-losses when very importantnews can hurt my position. If the profit is already quite high, I try to move my st

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