October 30, 2014

Traders: Millions By The Minute - A Trading Documentary That Is Well Worth Watching

It's quite rare to find a program about trading on one of the main TV channels, and the ones that are shown are generally dumbed down, but there was a documentary called Traders: Millions By The Minute that was shown on the BBC a few months ago that was surprisingly good.

I didn't talk about it at the time because only a small percentage of my readers are from the UK, but I have just discovered that is now available to watch on YouTube, which obviously means that everyone can now get a chance to watch it.

This documentary takes a close look at the financial trading industry and follows some of the individual traders who trade the markets every day, including people who work in the city and people such as myself who trade from home.

It is split into two parts. The first part is more focused on the city workers, and goes behind the scenes at a training company that teaches people how to trade the markets, whilst the second part focuses more on the people who trade the markets using their own money, some of which are extremely naive and almost certain to lose money in the long run.

Here are both parts of this excellent documentary if you would like to check it out for yourself:

Part 1:

Part 2:



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October 29, 2014

A Profitable Pennant Breakout On The AUD/USD Pair

If you have been following me on Twitter (@forexarticles1), you will know that I have been watching the AUD/USD very closely in recent weeks because it has been trading in a very narrow range and has been preparing to break out for quite a while now.

More specifically, if you zoom in on the 4 hour chart and draw a line connecting both the high and the low points, you will see that it formed a nice-looking pennant on this time frame.

So for me it was just a case of waiting for the price to break out of this pennant to herald the beginning of a new trend, and enter a trade in the same position as soon as this happened.

audusd_oct29.png

You can see that there was initially a couple of false breakouts, but it's the candles that actually close above (or below) this pennant that I was most interested in, and although I missed the first one as it occurred in the overnight session, I did manage to get in on the action the second time around after one of the 4 hour candles closed above this pennant at 0.8815.

A perfect pennant breakout would have seen the price break below this pennant in the direction of the underlying longer term trend, so I wasn't looking for a huge price move.

The obvious natural target was the EMA (200) on this 4-hour chart, and this is where I closed half of my position at 0.8860 for a profit of around 45 points. I have since moved my stop loss to break-even and am currently targeting 0.8900 and a profit of 85 points with the second half of the trade, so we will have to wait and see if this comes to fruition (UPDATE: thankfully it has just hit this price target this afternoon).

Either way, this was a good example of a profitable breakout trade and demonstrates that you don't necessarily need to use lots of technical indicators. Sometimes sitting on the sidelines and waiting patiently for a breakout to occur using nothing more than price action and trendlines can be just as profitable.

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October 26, 2014

Is Forex A Suitable Business For Everybody?

I have a guest post for you today from Luke Peters that basically discusses whether or not forex trading is suitable for everybody, so hopefully you will find it useful.

Foreign exchange exists in a niche of its own. If you wish to enter, then you must learn it, adapt to it and be involved very deeply in its development. It cannot be learnt, unlearnt and re-learnt. It is a skill for life, pretty much like riding a bike. You may still possess the right balance, you know how the gears work and you can take the weight of the bike, but practice is that fine line of difference between you falling in a ditch and riding safely on the highway. Practice does make perfect and that is exactly what is needed in forex trading. Anyone who lacks practice can get minced when trading the forex markets. How suitable is it for anyone? That again depends on how well equipped the person is with regards to the following requirements:

1. Knowledge is power

Knowledge helps in every circumstance. It is with great care and precision that a person receives the knowledge to do things and when it is associated with their livelihood, they tend to be extra vigilant. Similarly when it is their livelihood, people tend to learn everything they can about the subject. In that case, you might argue that someone with a penchant for finance and mathematics would rule the forex market, but that is not necessarily the case. Someone with a fine understanding of international relations will realise how nations are responding to one another's statements and how it affects their respective economies, and on that basis can make an estimate on how the forex market will perform.

This can give you a very rough idea of where you stand. There is no doubt that a financial or economic background can be best suited for forex, but it can also be said that despite having no education or knowledge of these subjects, rough estimations on global scenarios can still be made. Do however note that you can never be too knowledgeable or educated about the forex market. You will always have something new to learn.

2. Experience is strength

A lot can be said about how the forex market treats first-timers and how more often than not, only the most intelligent and lucky ones will walk away with more than they started with. But experience plays a big part. One must realise that like any other market, a relatively newly developed system such as forex will take its own time to adapt to the people's requirement. Right now, it entirely depends on how good a trader is and how experienced he is in these matters. As and when he faces new challenges, his experience grows and sooner or later he starts finding patterns and sticks by them in order to reap profits.

That is why forex trading can be rightly called a fruit that leaves a bitter taste in many people's mouths. Not everyone has the patience or the stamina to go back to the place where they lost out a lot. Hence, you can learn from a forex tutorial until you feel good about yourself and start generating consistent returns. Or else it's time to hang up your boots and not enter the trading ring again.

3. Mind and soul are cleansed

This comes down to how well your heart and mind can respond to the market, and there are a few pre-requisites to have before entering the market. First on that list would be patience. You have to learn to cannot control yourself for a few hours, sitting in front of your computer looking at numbers that may not make sense, and accepting that there may be days where you don't make a single cent. If you lack such patience, then the forex market is not the place to be. It is this patience that separates an expert from a rookie.

Greed can also be the root cause of all failures in the forex market. Your greed can make you lose much more than you would under normal circumstances. This has primarily got to do with the way in which you respond to your first winning trades. If your greed takes over, it is quite certain that you will invest the full amount of winnings back into the market in the hope of earning bigger and better returns. It's important to note that not everyone can earn supernormal profits in this market. It is just not possible for many people, but greed will encourage many people to attempt to do so. So forex trading is not the place to be for greedy traders.

Fear can be the greatest obstacle in this market. It has got to do with the fact that as and when people start experiencing losses, they tend to let go of opportunities as they are afraid of making the wrong decision. They wait too long and at times take harsh and brash decisions fearing they have lost their opportunity and this in turn can lead to another problem. Thus, fear can be the obstruction in the path of a trader that either makes or breaks him. One must learn not to be afraid and to take the risk that is necessary for any form of business, because at the end of the day the greater the risk, the greater the reward.

4. It's just business, nothing personal

Another simple way of looking at forex is to think of it as a business with its ups and downs. If you can do that, then half the battle is won. When things can too personal or important for a person, then the line between business and oneself is broken and separate entities no longer exist.

By now, you must already have decided whether or not you are cut out to be a forex trader. Having considered each of the above points, you will know that forex trading is not for everyone, but it can still be mastered by anyone if they are disciplined and have the right mindset.

forex-trading-image.jpg

photo by alan

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October 20, 2014

2 Sources Of Trading Signals Now Available On IG.com

I have several different trading accounts, but it was whilst logging into my IG.com account earlier today that I noticed a cool new feature.

I'm not sure if these have been available before now somewhere on this site, but alongside all of the forex pairs, stocks, commodities and indices that you have in your watchlist is a little icon on the right-hand side that you can click on in order to get the latest signals for each of these markets.

This icon is grey if the latest signal was published earlier in the day, but it turns yellow if there has been a recent signal for a particular market so that you can trade these signals in real-time if you so wish.

These signals are provided by Autochartist.com and PIA First, and tend to be based on technical patterns, candlestick patterns, and price breakouts based on support and resistance levels.

Of course there is a bit of a conflict of interest because IG want to take your money off you, but are providing you with two sources of trading signals (free of charge) at the same time, which should tell you something.

Nevertheless from what I have seen so far, these signals are pretty reliable, and if nothing else they will at least give you some trading ideas, and alert you to some set-ups that you might want to consider trading yourself.

I certainly wouldn't recommend trading all of the signals provided because some will be better than others, but there will be some set-ups that will have a very high probability of success. Therefore it may be worth keeping an eye on these signals in the future if you have an account with IG.com.


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October 15, 2014

Average Daily Trading Range Of The Major Forex Pairs In October 2014

At this time of the month I always like to look at the average daily trading range of all the major currency pairs, as well as some of the other popular markets.

So you will find listed below the average trading range of all of these markets right now in October 2014 (based on the ATR indicator), alongside the September figures in brackets for the sake of comparison:

GBP/USD - 103 (84)
GBP/JPY - 129 (105)
EUR/USD - 86 (61)
EUR/GBP - 41 (46)
EUR/CHF - 21 (19)
USD/JPY - 73 (53)
USD/CAD - 75 (61)
USD/CHF - 63 (45)
AUD/USD - 90 (63)

FTSE 100 - 89 (50)
DOW JONES - 189 (100)
NASDAQ - 56 (31)
S & P 500 - 25 (14)

BRENT CRUDE - 197 (141)
CRUDE OIL - 211 (151)

You will immediately notice that volatility has shot up pretty much across the board. Apart from the EUR/GBP pair, every single market is trading in a much larger trading range this month, which will inevitably please many day traders.

The major world indices and the oil markets are the ones that have really increased in volatility, rising by around 80-90% in some cases. So there are no shortage of markets to trade right now if you are looking to profit from large intraday price swings.

A few months ago we were all moaning about how quiet all of the markets were, particularly the major forex pairs, but there are no excuses right now because all of the markets are extremely volatile at the moment.

Of course just because we are seeing some big price moves on a daily basis, it doesn't necessarily mean that it is easy to make money. However it does make things a little easier because you can extend your price targets, and you should hopefully find that you won't get stopped out all the time, which can happen when the markets are quiet.


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October 9, 2014

Can You Really Start With $100 And Make A Living At Forex Trading?

This is a guest article from Jack Maverick. I hope you find it useful.

Can You Really Start With $100 And Make A Living At Forex Trading?

I say, “YES!” You can start with as little as $100, and within 3 months be making a pretty decent income, about $90 a day…within 6 months be making approximately $7,500 per week (how’s THAT for a 3-month increase in income?)…and in less than one year (about 10 or 11 months), have made OVER $1 MILLION DOLLARS. If you’re a bit skeptical, fine, just stay with me here a minute and I’ll show you exactly how that can happen for you.

Here’s how: All you have to do to accomplish that goal is manage to grab about 5 or 10 pips a day. That’s it – you don’t have to shoot the moon – all you have to do is average netting a 5-10 pip profit every day. To do that, I use a very simple, but time-tested 15-minute trading strategy that nearly always offers me that opportunity. I watch Eur/Usd, Gbp/Usd, and Aud/Usd using this forex trading strategy, and there are usually several opportunities per day to put it into play, to make a quick profit, and get out and be done for the day.

The problem most people have – or create for themselves, actually – is trying to overreach, to make a killing in one day. Although that’s always fun, it’s simply not necessary – you can become a millionaire in less than a year, starting from virtually nothing, just by taking very small daily profits. The challenge is simply practicing the necessary self-discipline to be satisfied with doing that. It’s not easy, because in the very beginning – if you start from that $100 level anyway – your profits are going to look very small, virtually meaningless. But you have to realize and believe that they aren’t meaningless, they’re just the necessary first steps toward creating a fortune for yourself in a ridiculously short period of time. You have to tell yourself over and over, “This is how I become a millionaire. What I’m doing today to make $10, if I just keep doing it, this exact same thing will be making me $20,000 a day 7 or 8 months from now.”

You can get all the details of my 15-minute trading strategy, absolutely free, right here – My blog. But for now let me just show you a chart of the strategy in action. Here’s a 15-minute chart of Gbp/Usd from today (October 7, 2014), and here’s how I played it – I bought at 1.6079, at the close of the candlestick that’s marked with 3 up arrows directly above it, a little right of center on the chart. Just 2 candlesticks later – 30 minutes – price was up to 1.6092, and I’d made my money for the day. Simple as that. (I actually trade as follows – I take off half my position when I hit that initial 10 pip profit target, leaving the other half to run in case there is a nice continuing move, with a stop 1 pip above breakeven – so I actually made more money.)

oct09chart.png

That’s it – 10 pips, trading just 5 micro lots, is $5, which, as you’ll see from the long profit chart that follows below, is all you need to make to start out with. You, of course, increase your lot size as your account grows (e.g., as you move up to having about $150-$200 in equity, gradually increase your trading size to 10 micro lots). The basic calculation on lot size is always just figure out, “How many lots do I need to trade so that a 10-pip profit will equal a 5% profit on my equity for the day?”

So let’s see how this small stair-stepping account growth works out. You’ll have to scroll down a fairly long way to get to your million dollars at trading day 189, but it’s well worth the trip. :)

There are approximately 20 trading days in a month, about 220 trading days in a year. You can see from the chart below that you hit that magic million dollar level on day 189, which is about 11 months from now. Is that all right with you, if you’re a millionaire by September of next year? But the really nice part is that although, as I said, in the beginning you’re talking very small absolute dollar amounts, within just 3 months (day 60) you’re making roughly the equivalent of $500 a week, and just three months after that (day 120) you’re up to making $7,500 a week! And you started with just $100! If you’re unemployed at the moment, that should look really good to you. I don’t know of any other home business that someone can start with just a $100 investment and within 6 months be earning at the rate of a $300,000 a year income, and in less than a year actually bank over $1 million.

So, scroll through and have a look. The third column figure is your profit goal for that trading day, which is always just a 5% increase in your equity; the first column is your account equity balance at the beginning of that trading day; the second column is your equity balance at the end of that trading day, with your profit for the day added in. And again, keep in mind that there are approximately 20 trading days in a month, so you can check as you go along to see how much you’re making per day at the beginning and end of each month (it increases at an exponential rate, you’ll see).

oct09table.png

…….

oct09table3.png
…and so on until…

oct09table2.png

Okay, now, is it really that easy? Not quite, no. In fact, you’ll have a losing day now and then, which will slow you down a bit (however, you’ll also have some days where you make more than your goal for the day, which will speed you up). In reality, it will probably take you closer to 18 months to achieve millionaire status. Gosh, that’s just terrible, isn’t it? – having to wait a whole year and a half to become a millionaire. :)

But the bottom line is this: Can you start with next to nothing and become a millionaire through forex trading? – YES, you can. And all it really takes is the discipline to be willing to settle for small, daily profits, rather than giving in to the temptation to try to make a fortune in one day. Make it your mantra, to repeat to yourself all day long – “10 pips a day is one million dollars”.

Go, begin your journey now. The sooner you begin, the sooner you’ll have that million dollars. Here again is the link to my 15-minute trading strategy – My 15 minute strategy

And let me give you one more very helpful thing to boost you along on your million dollar journey. Get this very unique trading strategy that literally WINS EVERY TRADE. You can’t use it to get to a million in less than a year, because it won’t make you 5% a day (you’ll actually have to do the work for that part). But it WILL bank an additional 10-30% or so a month into your trading account with virtually no risk at all. It’s just like having an automatic second stream of income pouring into your account every day. Get it here now by clicking this link – The Forex Mortal Lock Profit

Go get filthy rich – it’s lots of fun.

Jack Maverick

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