Forex Moving Averages - 3 Ways to See the Forex Move

Moving averages are one of the most basic and widely used series of indicators by technical analysts of the Forex market.  Moving averages are used to confirm existing trends, identify new trends that are possibly emerging, and to attempt to identify trends that are coming to an end before a market correction.

This knowledge can help a trader make smart trades in order to take advantage of the Forex market.When talking about moving averages, there are three main types of moving averages that you’ll see used: Simple, Weighted, and Exponential.

Simple Moving Average

A simple moving average is one that gives equal weight to every price point over the specified period being studied.  The analyst can decide whether to use the high, low, or close prices, and then all the price points are added together and averaged out. After using the averages a line is formed.  Depending on the moving average you are using, you may have a line for the “high” averages and the “low” averages. Every new price point that gets added replaces the oldest point and the line adjusts accordingly.  This should provide you a “tunnel” for the highs and lows.  Whenever the price of a currency pair approaches or goes outside of these lines, this will provide you strong clues as to what the market will do next, and what actions you should go through with to take advantage.

Weighted Moving Average

A weighted moving average does the same basic thing as a simple moving average, but as its name suggests a weighted moving average gives more emphasis to the most recent data.   Basically the closer to present time the data takes place, the more the value of the data point.  This total is also added together, then divided by the sum of the weighted factors.  The major benefit of a weighted moving average is that it allows the user to smooth out a curve while keeping the “average” more closely related to the most current information.

Exponential Moving Average

An exponential moving average is a different way of weighing more current data.  An exponential moving average multiplies a percentage of the most current price by the previous period’s average price.   Basically the oldest pieces of data are never removed, the way they are with other types of moving averages.  Instead of replacing the oldest pieces of data with newer, the oldest pieces are given less and less value, creating an average that appears more like an exponential curve.

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder – Founder, ForexImpact.com

Pulling the Trigger

Recently I conducted a survey that had the question: “What is your single biggest question about trading?” There were numerous responses, but one that I kept seeing over and over again was…

When it comes time to place a trade, I just can’t seem to “pull the trigger”.

In my experience, people have trouble “pulling the trigger” for one reason and one reason only: fear. There are three main issues that generate this fear, and all three issues boil down to the trader’s belief about himself, his trading system, or the market. The first is a trader’s psychology. The second is the trader’s confidence in their trading system, and third is position sizing.

Let’s take a look at each one of these factors…

Psychology

Trader’s psychology is an area that I have conducted limited research in, so for that reason I have intentionally limited this topic. I did receive the following quesiton, though, and I felt it was worth address:

“Why I simply can’t follow my trading strategies religiously although I know that I will be able to make money consistently if I do”.

For those of you that have a profitable system but don’t follow it, you might want to research the psychology of trading. There are a few products on the market to help “fix your head”. For example, these products may help you to become ok with being wrong or realizing that you have control over very little. There are a few that I would recommend. These products help youto learn to have the right psychological mind set for trading.

One such product that I have used is “Trading Mind Software”. The exercises in this product have helped me to feel less anxious while a trade is open. This has helped my overall trading, because I’m mentally calmer throughout the trading day.

CLICK HERE if you would like to gain more information about “Trading Mind Software”.

I believe that there are also people out there that should not trade because psychologically they will never be able to handle it. This population is very small, however, and you shouldn’t automatically assume that you’re one of them just because you have difficulty “pulling the trigger”. More times than not the issue lies with the remaining two factors…

System Confidence

The second issue that stops otherwise good traders from pulling the trigger is their lack of confidence in the trading system they are using.

Even if you are the developer of the system, it can be a little unnerving the first time that you place a trade with real money using a new trading system. The best way to handle this fear or lack of confidence is twofold:

1. First, trade in a demo account. There are more than enough brokers out there that offer demo accounts, so you should be able to put your system through its paces without risking any real money. This does take time (especially if you are trading a trend following system), but if you think of your trading as a business then this is just the R&D portion of that business.The key is to have a starting date and a stopping date for your system tests. At the end of your testing pick the systems you want to trade and start small with real money.The testing period may be as short as 30 days for more actively trading systems or as long as a year for systems that trade less frequently, but the outcome should be the same: You gain confidence in the system because you see it making money. You also become familiar with placing trades, which should further build your confidence. Hopefully, you will also go through a draw down during testing so that when it happens with real money you will stick to your system knowing that it will come back.
2. The second way to combat your fear is to have an expectancy as to how your system trades. An expectancy for your trading system can come through the form of trading in a demo account or through back testing.The expectancy allows you to know the personality of the trading system. For example, you can expect to have winning trades 40% of the time or draw downs of 50%. This allows you to monitor and predict (expect) the system you are trading. Having an expectancy will keep you from being surprised by the results of your trading system, whether they be good or bad.

Position Sizing

The third reason that people struggle with pulling the trigger and trading every signal is position sizing. Most people over-trade their account. I’m not referring to the number of trades that are placed, but the percentage of the account that is being traded on any one trade.

Here’s a good rule of thumb that I use: If you feel anxious about the amount of money that you are risking on a trade, then you are risking too much money. Most trading systems are designed to make money when trading only 1% of the account. So, if you have $10,000 dollars in your account, then you can risk $100 dollars per trade.

Most people trade 10 times that amount and then wonder why they are so anxious about placing the trade. I wouldn’t want to place a trade either if I was going to lose 10% of my account if the trade went against me. But when you trade only 1% of your account, you don’t care if you lose it or not because there’s still more than enough capitol to get you back in the black.

If you are trading one full lot and you are anxious about your trades, do me a favor - trade one mini-lot per trade. This should cut your anxiety by 100%.

Remember, the name of the game is longevity. You want to be around long enough to place enough trades that you become profitable. If your system allows you to risk 10% of your account per trade and trade 1000 trades then great, but this is definitely not be the norm. (In fact, if you run across such a system I’d love to hear about it!

In summary, if you are having difficulty pulling the trigger; ask yourself these questions:

1. Do I believe and trust in the system I’m trading? If the answer is no, then get a new system or test your system until you have faith in it.
2. What percent of my account am I trading? If the answer is higher than 2% of your account, bring it down to 1%.
3. Am I mentally fit enough to trade? If you answered questions 1 and 2 positively, but still have trouble pulling the trigger; then you need to learn the psychology of trading.

Until next time…

Good trading,
Jason Fielder

Forex Day Trading - Why You Should Not Try This

Your staying at the beach house working in your office, calm and collected as you collect the profit from yet another successful day trade is debited to your account. Your kids rush in and you take a break and head outside to play in the sand. It’s a nice picture isn’t it?

If this sounds familiar, it’s because there are probably half a dozen commercials at all times of the day showing scenes like this to encourage people to get into day trading the Forex market, usually through signing up with a certain company or buying an expensive tutorial that is supposed to make beating the Forex market as easy as can be.

So in danger of making myself unpopular, here’s the stark truth of the matter: most traders should not try day trading. Day trading the Forex might be trendy, but it’s not nearly as easy or profitable as these advertisements would like you to believe. Day trading is an advanced form of currency trading, and often involves many shorter term trades.

In my opinion, most traders would be better served learning to trade on the longer term trends that the Forex market has to offer. Not only does this allow you more data and time to analyze the developing trends in the market, but there is a lot more money to be made by being on the right side of a huge market breakthrough than being right on even dozens of day trades.

If you’re good enough to make money day trading, why wouldn’t you learn to trade the parts of the Forex that offer bigger profits and less risk (although let me note, there is always major risk in trading Forex)? While some traders will undoubtedly want to day trade, for most traders the real chance at making a living at the Forex revolves around the long term trades.

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder: Founder, ForexImpact.com

Forex Trading Systems: The Key to Forex Profits

While there are many different opinions between various Forex traders about which methods and strategies are best, there is one singular point that every Forex trader will agree on: you need a great trading system to profit consistently. A great Forex trading system is the difference between profiting consistently from Forex trading and from finding yourself busted.

A great Forex trading system is one that first off will be successful at trading the market. If it doesn’t make money, it’s not any good. That’s obvious, but another part of that equation is how often the Forex trading system can be used. Is it only when the market is trending? Counter-trending? Breakout? Some combination of all of these? This can make a big difference.

The market does not breakout often, but the best opportunities to get massive profits are during the breakout market. So a Forex trading system that is designed to be able to trade effectively no matter what state the market was in is obviously going to be far superior to any system that only trades with one market movement or in any other limited situation.

Every successful Forex trader has a solid, tested, and proven Forex trading system. Same thing with any company that can consistently make money trading the Forex. This can’t be emphasized enough. Any company that can consistently make money trading the Forex, and teach others how to do so as well, must be using a time proven Forex trading system. 

If you are only going to take one piece of advice from this article, then make sure it’s this one: find a successful and time tested Forex trading system.

Find a Forex trading system that has been used and tested for at least a couple of years, if not longer. The longer a company has been profiting from the Forex, and the longer that system has been tested, the better the chances of you coming out of trading the Forex grinning ear to ear.

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder: Founder, ForexImpact.com

Forex Blogs - Seperating the Wheat from the Chaff

There are a lot of Forex blogs out on the web, and while some of them offer really good advice, others are mostly just fluff with an affiliate link. That doesn’t mean that you shouldn’t look for a good Forex blog online to help teach you the ropes of the market, but you do want to make sure that you’re following and absorbing the advice of a good Forex blog that is being posted to by an actual trader who knows how the Forex works.

There are several things you can look for when viewing a Forex blog that can help you determine whether or not that blog is one you should be listening to, or one that you should actually ignore completely.

You Should:

• Look for a blog that is posted to by someone who actually trades the Forex. Would you learn locksmithing from anyone other than a locksmith? Then why would you try to learn Forex from anyone other than an actual trader?
• Look for a blog that gives actual useful information. I’m not talking about a step by step guide to the person’s trading system, but each post should provide some information or advice that helps you learn more.
• Learn some about the Forex market yourself. There’s enough free information from reliable authority sites that you should be able to learn the basics, and that will help you spot a phony.

Using this advice as a guide should help you to be able to determine whether a Forex blog has any true worth to your ongoing Forex education or not. If not, drop it like a bad habit and don’t return. When you find a Forex blog that gives good solid information and really strives to help you learn about the market, then read all you can and you’ll be on your way to being a better trader.

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder: Founder, ForexImpact.com

Speaking Like a Pro: Learn Forex Jargon

One aspect of trading the Forex, or even talking to Forex traders, that can be really intimidating is that the Forex market has an awful lot of jargon. For those of us who have been trading for years, the jargon comes as second nature. If you’re just getting started, then it’s easy to see how intimidating that can be.

This article will set out to help you get started. There is a lot of Forex lingo, but at least now you’ll be able to jump into the game a little bit more after knowing these common Forex terms:

“The major currencies.”  There are eight major currencies, which are: the U.S. Dollar, Canadian Dollar, Australian Dollar, New Zealand Dollar, the Euro, Japanese Yen, the British Pound, and the Swiss Franc.

“Minor currencies.”  This is any currency that does not belong to the major eight. So even currencies of large economies like Brazil, Mexico, Russia, China, and India are all still considered minor currencies.

“Base currency.”  This is the first currency listed in a currency quote, and is always measured in a unit of 1.

“Cross currency.”  The second currency listed in a currency quote.

“The Aussie.”  A slang term for the Australian Dollar.

“The Kiwi.”  A slang term for the New Zealand Dollar.

“The Bid.”  Refers to the bid price, which is the price the market will currently purchase a specific currency pair for. The bid price will always be higher than the ask price.

“The Ask.”  Refers to the ask price, which is what you will sell a currency for. The ask price is the one used when selling.

“The Spread.”  The difference in value between the ask price and the bid price.  This miniscule difference is how some brokers make their money off Forex traders instead of charging a commission.

“Bull Market.”  A market distinguished by an overall rise in price.

“Bear Market.”  A market distinguished by an overall fall in price.

This is hardly the end all, be all, of Forex lingo, but this article should at least give you a good start into getting comfortable with the slang you’ll hear around the Forex markets.

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder: Founder, ForexImpact.com

Speaking Like a Pro: Learning More Forex Jargon

There’s far more Forex jargon than can be covered in just one article, but this article will also help to fill in the Forex jargon for beginners. No matter what the group (doctors, astronomers, basketball players, gamblers) each group has its own distinctive lingo. The Forex is no exception, so without any further delay:

“Lots.”  This is more than lingo, and not a word referring to a lot of something. Lots are the bulk amounts of currency required for trading in the Forex market, generally $100,000.

“Margin.”  This is the minimum amount of money needed to put up to place a trade with a broker. As long as you have this minimum amount in your account you can trade. When your account falls below that amount, all your positions are closed out.

“Margin Call.”  A margin call is made when, due to losses, your account falls below the allowed minimum for a broker account, then the broker makes a margin call, which will close out all your positions.

“Limit Order.” This is an order to execute a trade only if it hits a specific price or better.

“Carry Trade.”  Depending on what Forex traders you hang around with, you could hear this one a lot. A carry trade is a trade where you choose a currency pair in which you go interest positive, meaning that you are earning daily interest on your trade because of the difference in interest rates between the two nations.

“Counter-Trend.” Many people think this means trending downward, but that is NOT correct. A counter trend market is a market that is not trending either way, meaning all movements are basically staying within the same channeled area.

“GTC Order.”  Good Till Cancelled Order. This is an order placed for a currency pair that will remain in play until the trader shuts that position down.

“OCO Order.”  One Cancel Other. A type of trade using two orders that are set up by trigger values. When a currency pair hits a trigger, that trade goes into effect while the other is automatically cancelled.

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder: Founder, ForexImpact.com

How to Start Trading Forex

There are a lot of early steps that every Forex trader has to take before getting started in successfully trading the Forex markets. The first and most obvious step is to actually open a Forex account so you have access to the market. This is necessary so you can determine which Forex software and which online Forex platform you prefer, which are necessary to even open a “play money” or free trading account (always recommended for the beginner Forex trader).

The good news is that opening a Forex account is not difficult. In a way, there are only three basic steps to opening up an online Forex trading account:
1. Select an account type
2. Register your account
3. Activate your account

If these three steps don’t bring a lot of clarity, don’t worry, I’m about to go through them one by one to make this process as easy and painless as possible.

Select an Account Type
There are different types of Forex accounts and different ways of opening them. These accounts can be opened either in your name, or the name of your business. You will be given choices between standard accounts or micro/mini accounts. Occasionally you might even see the offer of a managed account. Figure out which account type fits your needs and select that one.

Depending on the Forex trading platform that you have chosen to do your trading with, the registration instructions will follow and guide you through step by step. As this is occurring, you will eventually be shown a page of the Broker’s policies, which brings us to step two:

Read the Broker’s Policies
I can’t stress this enough. Don’t just gloss over it, but pay particular attention to the fine print. You may sign a contract to a broker with policies you don’t want to follow. Different brokers have different rules, so it is particularly important to make sure you’re getting a deal you can live with.

Once you’ve read and agreed to the policies, you can register. Once that’s done, you can create a username and password for your account. Right there you’re activated. While it’s not necessary to practice first, I always strongly recommend using a practice account until you get used to the tools and start consistently making profits in practice. Then you’ll be able to trade the real money with confidence.

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder: Founder, ForexImpact.com

Forex Orders: Do You Want Your Pips Crispy, Fried, or Super-Sized?

There are many different kinds of “orders” that can be used when making a trade in the Forex market, and the sheer variety of them can be intimidating and confusing to someone just starting out. Even for the trader who has already gotten their feet wet a couple of times, it’s never a bad idea to go back over the options available and make sure that you have everything down.

There are several basic types of orders, but this article will concentrate on only six of them to keep things simple, and keeping orders as straight forward and simple as possible is one sure sign of an experienced trader.

Market Orders
Market orders are orders that are made by buying a currency pair for the market’s current quoted value. For example, if the EUR/USD=1.4312, you would immediately get 1.4312 USD for one Euro. With market orders, you make trades with a single click, and you’re in the market. There is little to no waiting.

Limit Orders
A limit order is made when you want to wait for a currency pair to hit a specific price. If you think you see a trend, but don’t like the current price, you can set an order to buy when your ideal price is hit. For example, if USD/JPY is at 120.25, but you prefer it starting at under 120, you can put in a limit order for 119.99.  If the currency falls to that, you buy in. If it doesn’t, you don’t get involved. A limit order can also be used for picking a point to at which to sell.

Stop-Loss Orders
A “Stop-Loss Order” is an order to sell at a specified exchange rate that is below the current market rate.  This can be referred to as a Forex trader’s “safety valve.” A stop loss order means if the trade turns against you and usually this is done to liquidate part, or even all, of an open position when the market conditions turn enough to cause the open position to lose value. In other words, this is put in place to minimize losses if things go really badly, so the trade is automatically closed before you can lose anymore. This order can also be used to get you into the market that the specified price or worse.

GTC (Good ‘Till Cancelled)
With a GTC order, the order is good until you cancel the order or the order is triggered by the market.

GFD (Good for the Day)
GFD orders last until the end of the trading day. What time that is depends on what time zone and nation you live in. This means you’re betting that by the end your order will be triggered, or if you’re not, that it’s time to move on anyway.

OCO (Order Cancels Other)
An OCO is an order where you set up for two possible orders based around two separate values that work as “triggers.” When the market hits one trigger, that order is put in and the other automatically cancelled.

Simple orders are usually the best. Keeping in mind your options here and sticking with the normal tried and true orders will help you to guarantee trading success.

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder: Founder, ForexImpact.com

Reviewing Forex Basics: Don’t Lose the Forest in the Trees

Every so often it’s a good idea just to go back and remember the basics of the Forex market and what the Foreign Exchange Markets are all about. For the seasoned trader this might be a basic review, but that’s never hurt anyone, while the newbie might get some good information out of this. If nothing else, this article will keep you thinking about the Forex and help keep your mind in the game.  This is one market where you definitely don’t want to get caught with your eye off of the ball.

What Is The Forex?
Forex is short for the Foreign Exchange market, and although “Forex” is the most common abbreviation, it can also be referred to as “FX,” “Spot FX,” or sometimes just plain old “foreign currency trading.”

The Forex market is the largest trading market in the world and the competition will never come close. On any given day, the combined trading volume is over $2 trillion, meaning in a single week more currency is traded in the Forex than is currently owed by the staggering debt run up by the U.S. government.

Trading Currency Pairs = Betting on an Economy
What can be confusing early on for someone trying to learn the Forex from either the stock or commodities market is understanding what you’re trading. In stocks and commodities, it’s easy. You’re buying or selling a part of a company, or corn, or oil. In the Forex you’re exchanging one currency for another because in a sense you are buying a small part of a nation’s economy. If you’re buying the Japanese Yen (JPY) against the U.S. Dollar (USD), it means you believe Japan’s economy, at least in the short term, will look better than the United States.

When Forex trading, you should definitely stick with the 8 “major currencies” traded. When you make a purchase, two of the currencies will be listed. If you’re buying Japanese Yen with US Dollars, the pair will look something like (USD/JPY). The first currency is the one you currently have and the second currency is the one you wish to purchase.

24/6 Trading
Remembering that the Forex market is open 24 hours a day for six days a week is very important, because you want to remember that using stops and trailing stops is critical because while you’re sleeping, there could be news that directly effects your trade and it would really stink to lose a 100-200 pip profit on your trade because of something that occurred at 3 a.m. your time.

Potential is your friend in this market. Knowing when you can make the most profitable trade is vital to your success. Technical analysis and testing is even a better friend in the Forex. Like the old saying goes: “The early bird gets the worm, but the second mouse gets the cheese.”

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder: Founder, ForexImpact.com

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