Day Trading - 100% Losses Guaranteed

Day Trading - 100% Losses Guaranteed

Forex day trading is simply one of the best ways to lose your money and the logic it is based on is absurd and common sense should tell anyone why it doesn't work. Yet year after year day traders trade and lose using day trading methods. Lets look at why.

Before we look at why day trading doesn't work lets first look at all the systems that supposedly make money on the net. They don't make money in real trading though it's all simulated made up track records using past data.

If you see a day trading system which claims that it makes money simply look for the following in the small print at the bottom:

"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".

The above disclaimer simply means nothing in terms of future profitability. Why?

Because if you want to make up a track record using past history - anyone can do that.

If we all knew prices in advance we would all buy the bottom and sell the top and never lose any money - in fact we would all be multi millionaires. Shame it's not that easy though!

We have to trade without knowing what will happen and that really is a lot harder

Day trading is a good story and marketing companies know this so why not write some hyped up copy to appeal to greedy traders, make up a great track record and then sell it to the unsuspecting trader?

That's what happens and time and time again the novice trader falls for it - He thinks he is going to make his fortune by handing over a few hundred bucks and then he gets his lesson in reality his equity is lost.

So let's look at why day trading is a loser's game

The reason day trading doesn't work is that the logic it is based upon is absurd - think about this:

We have millions of traders, all with different motivations and forex trading systems and day trading is supposed to allow you to gauge what this vast diverse mass of emotional beings will do so you can enter trades on a tick chart?

Its common sense this cant be done and that's why over the longer term day traders lose.

All volatility in daily time frames is random, support and resistance levels cannot be used and you cannot get a trading edge so you will lose.

If you can't get the odds in your favor you will lose period

Avoid forex day trading unless you want to lose your money and lose it quickly.

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Formulating a Trading Plan

Formulating a Trading Plan

To formulate a trading plan, you should first go through all your charts to get an overview of the markets. An excellent way to do this is to review the chart section and the charts of each stock on our bulletin. During that time, you should be looking for stocks that are trending higher and stocks that are setting up nice base/consolidation patterns to breakout of. For pullback entries, look for some "against the grain" moves; those intermediate trends that go against the longer term trend. This can alert you to stocks that might be nearing a support level and may soon bounce and resume the primary trend.

Try to select the stocks that appear to have the greatest potential to move in the desired direction and place your order entry about 30 minutes into the trading day. Do not trade with stop or limit orders in the first 30 minutes. Doing so will result in many whipsaws due to the opening volatility. Let the markets or stocks settle down and determine direction before rushing your entries.

How will you know which stocks have the greatest potential? Our bulletin is chock full of the potential movers you are looking for. Of course we realize each individual can't trade every stock on the bulletin but there are many choices depending on each individuals trading style. There are breakout plays, there are pullback plays, there are good day trading stocks on the bulletin as well as swing trading stocks. There are even stocks that would be great long term buy and hold investments.

Whatever your style is, the bulletin is a great place to start when looking for stocks to trade as you formulate your trading plan. For example, I use the bulletin not only for stocks to swing trade, but also use it for stocks I want to day trade. I select those stocks that have the strongest chart patterns and greatest potential to make a quick move.

Besides the good chart patterns, I'm looking for momentum stocks that may be news driven or perhaps stocks in a hot group where momentum is taking the whole group higher. I will also look at stocks that have the most consistent daily price ranges, a range sufficient enough for me to take my piece of the action out of the market and profit.

Beware that we are not looking for stocks that have too steep a rise. When a stock has gone up in a parabolic curve, this too steep of a rise often signals that the end of a move is near. Prices that break out too fast and go straight up rarely give us a 2nd chance to get in. If we missed it, we missed it and there is no sense in chasing.

If prices have been going up steadily, and suddenly that angle steepens and goes parabolic, the stock is giving us a warning that the move may soon be over. When shorting stocks in down markets, you can allow a steeper angle, because often a stock will move down a lot faster than it moved up. The most conservative entries are those in nicely trending stocks that are making a retracement (pullback from the highs to a support level on decreased volume) These are the best entries as far as risk/reward.

It is important to note that trading must be done by formulating a plan the night before. Do your homework every day once the new bulletin is updated to the website. The only way to know when an important breakout or beginning/continuation of a trend might occur is to perform your daily analysis. We do most of the work for you if you use the bulletin, but ultimately, the decision to buy and sell will be yours based on your style of trading/investing.

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Forex Scalping- A Key Market Factor You Must Know

Forex Scalping- A Key Market Factor You Must Know

Forex scalping requires a completely different mindset to other forms of day trading. Those who engage in Forex scalping normally make a number of trades a day taking somewhere between 5 to 10 pips from the market each time in many cases. Of course, the more trades that are made, the higher probability the scalper will have losses.

Hence the need to exercise discipline and not shoot at everything that moves. Look for only high probability trades. This however is easier said than done. That is why the following piece of information is critical in understanding market behavior from a Forex scalping point of view.

A Crucial Piece Of Information

The crucial piece of information we are referring to is this:

Somewhere between 60 - 80% of the time, the market is in consolidation.

This means that most of the time, the market is not making significant moves. It tends to range in a consolidation channel for hours at times before another significant move takes price to another level.

This market behavior pattern is ideal for Forex scalping once the trader fully understands it.

Develop Recognition Skills

Whenever the trader opens a chart, key support and resistance levels need to be identified. Previous highs and lows should jump out at the trader and be quickly recognized and identified.

To this end it helps to draw horizontal lines on the charting software to mark the top of a channel and the bottom of a channel on whichever time frame the trader is using.

The Key Forex Scalping Principle

The main principle that governs Forex scalping is the same principle that applies to all forms of day trading:

Sell The Rallies - Buy The Dips

Hence, when Forex scalping, the trader will look for ranges or consolidation channels where price is obviously moving (often within a 20, 30 or 40 pip range) and set an entry order to go long when price hits the bottom of the range, or an entry order to go short when price hits the top of the range.

There is always the possibility price will breakout at that point in which case it will be a losing trade. That's why it is important to maintain tight stops, perhaps no more than around 15 pips to keep the profit/loss ratio within reason.

Be Selective

To make Forex scalping trades higher probability it is important to select trades that have a number of elements going for them.

It is often not enough to just jump in on any range you see and enter an order to go long or short at the top or bottom of the range.

You want to look for ranges where the top or bottom coincides with other indicators. For example, the 200 EMA (Exponential Moving Average) is a very powerful indicator on the 4 hour, 1 hour, and 15 minute time frames. Seeing it is one of the most popular indicators of all time used by traders in the global market place, it pays to take notice of where price is in relation to the 200 EMA.

So if you see a trading range where the top or bottom also coincides with the 200 EMA on one of the higher time frames, zero in using the 5 minute chart, draw your horizontal lines to mark the range or consolidation channel, and choose a suitable order entry point. The 200 EMA provides a strong level of support or resistance, depending on which direction you are trading.

Likewise, if the top or bottom of the range is also lining up with a pivot level, or a Fibonacci retracement or extension level, you have added reasons to believe price is going to respect that level, at least for a while. You can then enter an order at the price point with reasonable certainty that you can grab 5 to 10 pips from the market, depending on the height or depth of the trading range.

Why Forex Scalping Methods Should Be Part Of Your Overall Strategy

This characteristic of market behavior, the fact price spends most of its time in trading ranges, makes Forex scalping a very profitable method once the trader has acquired experience and developed understanding and recognition skills.

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A Simple Tip to Warn of the Big Moves

Currency Trading Tips - A Simple Tip to Warn of the Big Moves

If you want to enjoy currency trading success, you need to catch and follow trends and spot turning points and this tool will help you - it's an obvious tip in many respects but most traders simply don't use it, so here it is.

It's to look at other markets that impact on the currency you are trading and for the purposes of illustration let's look at the US Dollar.

The dollar is a net importer of energy and high energy costs hurt it and the main one we are referring to here, is crude oil. In recent history when crude has hit high levels (and we have had recent tests of $100 a barrel) it has hurt the dollar and the retreat from this level has seen the dollar stabilize and rise.

Tops in the oil market recently have warned of dollar rallies.

Another major factor is interest rates.

Recently the dollar has been hurt by the perceived view that interest rates will be cut and you can get an idea of how much by looking at interest rate futures. When the interest rate futures rally too hard to fast and then fall, you can often see the dollar rally.

Why? Because traders get ahead of themselves - the recent rally in dollar euro was preceded by 100% consensus that interest rates will be cut by 50 bps (probably true) but gave 50 - 50 that rates would be cut by 75 bps (unlikely) the level of interest rate cuts factored into the market was overdone and prices in interest rate futures fell and the dollar rallied.

Tops in oil and interest rate futures can be used to warn of dollar rallies.

Another important variable is the stock market. Weak stocks hurt the dollar and strong stock markets support it - so watch it in fact if you want another tip:

If you are trading long term trends and only want to look at the prices of currencies once a day, do it just after the stock market closes. This closing price is always significant and while currencies trade 24 hours they are effectively thinly traded until Tokyo opens and the US stock market close sets the tone for the next day

Other currencies are also affected by outside influences:

The Canadian Dollar - Is a net exporter of oil and high prices of oil and other commodities are supportive of the currency

The Australian Dollar - Australia is a big producer of gold and when gold prices are high it supports the currency.

By looking at other markets that are important to a currency, you can often spot whether trends are going to continue or reverse. While it's obvious that currencies don't move in isolation, many traders do not bother to look at other markets for clues - if you do, you can get a trading edge.

A trading edge is what forex trading is all about and if you research this tip further, you will find it very useful as part of your forex trading strategy for bigger profits.

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Swing Trading For Beginners

Swing Trading For Beginners

The swing trader is not looking to turn a profit in a day. He will hold a stock anywhere from three days to three or four weeks.

This trading technique is most suitable for people who do not have the time to dedicate to sitting in front of a computer to monitor the markets when they are open. Many traders who are novices find swing trading to be the style that they are best suited for.

Swing traders tend to pick stocks that are traded on the big three exchanges which are the NYSE, AMEX and NASDAQ. The reason that they stick with stocks traded on these markets is because they are the most actively traded markets so these stocks have the greatest chance of going very high or low in a given day. This means that the swing traders won’t have to hold onto stocks too long before making a profit.

Swing traders prefer to trade when the market is not in full bull market or in full bear market. Swing traders are poised to make the most profits when the market is relatively static. The swing traders will make money with short-term movements in the market.

As a swing trader, you will not make a lot of money with one trade. The profits will be aggregated from making multiple trades over a period of time. Swing traders will only buy and sell once the stock has reached its baseline, so that they could make their trade at the best possible moment to get the most bang for their buck.

A swing trader will attempt to earn a 10-15% gain on his investment, which makes it a viable strategy for beginners, but would also have enough profit potential to interest intermediate traders too. To make the most gains, swing traders try to sell their stocks as close to the upper or lower margins without jeopardizing their chance at missing the large gains. If a swing trader waits too long he runs the risk of the market turning around and he’ll wind up losing money instead of gaining.

With practice, a swing trader can learn to read the market indicators and avoid this from happening often.

The great thing about swing trading is that beginners find out pretty quickly whether their decisions to buy or sell have paid off, which can be an enormous incentive to continue. Swing trading isn’t as quick as day trading to see a return on your investment, but it also doesn’t require the attention to market conditions and details that is necessary for day trading to be successful.

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Successful Currency Trading - 10 X Conventional Investment Wisdoms Which Will See You Lose!

Successful Currency Trading - 10 X Conventional Investment Wisdoms Which Will See You Lose!

95% of traders lose money and that's a fact and it's also a fact that most of the so called conventional ideas about making money are dead wrong and cause traders to lose. Let's look at some conventional wisdom and why it's dead wrong...

1. Buy Low sell High is a Good Way to Trade

Not in forex trading it isn't - the best way to trade and catch the big moves is to buy breakouts to new market highs or lows. It's a fact that most major trends start from these.

Also if you try and buy bottoms and sell tops you are making the next mistake.

2. Predicting Forex Prices Works

No it doesn't. If you predict you're hoping or guessing and that won't get you far in life or forex trading.

Traders are obsessed with predicting exact tops and bottoms but its not possible so don't try and that leads to my next point...

3. The Markets Move to Science

This idea is loved by many traders but there is no science to market movement.

Why?

Because if they did, we would all know the price in advance and there would be no market.

Traders follow such "legends" as Gann Elliot and Fibonacci and think they know the code and lose. Markets are an odds game, nothing more than that so stop trying to be perfect and make some money.

4. Day Trading and Scalping Reduces Risk

Know it doesn't, it creates it and guarantees you will lose, as all short term moves are random in daily time frames - pretty obvious really - but many novice traders fall for this one.

5. Get a Forex Robot

Most of these are junk and have back tested simulations as track records and the market gives them a lesson in manners in the real world.

Don't fall for the hype check the track record which is normally a made up simulation.

6. Follow an expert

Traders never learn - the so called experts are in most cases not really experts at all - but even those that offer good advice the trader can't follow, because he cant go through a period of losses, without throwing the towel in because its not his track record and confidence and discipline crumbles.

7. Forex Trading is Easy

Most traders just think it's easy and of course its not - that's why 95% of traders fail. Sure the rewards are high - but it requires effort to make them.

8. Risk 2% Per Trade

This is just plain dumb.

If you don't risk much you wont make much and most traders in retail forex are trading small amounts so on $1,000 2% is $20.00, that wont make you much!

9. Diversify

Spread your risk is a commonly accepted wisdom but all it does is dilute profits and if you have a small account it's a total waste of time.

10. Technology can Help You Win

No it can't - think about it and remember 30 years ago 95% of traders lost and ratio is still the same today, despite all the advances in computers, software and communications.

So always remember forex should be simple and trying to be clever will just see you lose.

Forex trading offers an opportunity for the trader who accepts that he has to do it on his own and create his own rules and follow them with discipline. Anyone can learn forex and anyone can win and really its not the market that beats the trader, it's the trader who beats himself.

Start Trading Like the Pros With Forex Trader Software

An increasing number of forex traders are using automated software to do a lot of the gritty work for them. The number of traders who use forex trading software with their campaigns has jumped 7% in the last three years to show that the forex market is going increasingly automated. Why do they do it? In a word, it's more accurate. It's more accurate in a few ways.

The most obvious of these ways is the fact that forex trader software comes with signal generation. This more or less analyzes the market's trends and changes, past and present, to piece together what will happen next in any given set of forex pairs. You can then trade these forex pairs accordingly and ahead of the curve. The best of these programs are incredibly accurate, many of the top traders swear by them. In fact, many of the former and current top traders and experts are typically the co-publishers behind these programs. They are programmed using precise mathematical algorithms to eliminate human error and instead rely strictly on cold, calculated numbers to give you the most precise predictions.

To fully take advantage of "tips" or predictions, you've got to be able to react at a seconds notice. As this is near impossible, another benefit of forex trader software is that it can be completely automated. In other words, you just steer the program in the direction you want it to go, and it's off. You can focus your attention to other things from your day job to spending more time with your family. This is especially handy when you consider the fact that the forex market keeps much longer hours than the traditional stock exchange. It practically never closes, save for a few twilight hours over the weekend. When you approach things this way, there is no substitute from using forex trader software if you truly want to be successful in this market.

The best reason to get your hands on an automated Forex trading software is that it can make much more money for you because it works on sound mathematical

models and doesn't make stupid mistakes which every person does.
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