Your Advantage Trading Resource Guide...
Welcome to the Advantage Trading Resource website, featuring 24 hour FX trading, 24-hour day trading, and 24-hour webtrading covering the U.S. and International Futures markets, forex currencies & other futures markets...
Top Traits of a Successful Forex Trader
Forex trading on the internet is the quickest way to use your investment capital to its maximum. The foreign exchange markets can offer certain advantages to the smaller and larger traders, thus making the foreign exchange currency trading more preferable than other financial markets such as stocks, options and all of the traditional futures markets. Here are some of the top reasons why you will want to use do forex trading on the internet, in order to become a more successful forex market trader.
1. Forex is the world's largest market, trading at a volume of two billion or so, giving forex futures traders virtually unlimited flexibility and liquidity. That's over three times larger than the equity market and over five times larger than futures.
2. Forex trading can fit into anyone's schedule because it is available on the internet 25 hours a day, 7 days a week. There is no waiting for markets to open; they are always open day in and day out. This flexible schedule makes the forex market extremely attractive to those professional and potential traders and investors.
3. Forex trading on the internet encompasses buying one currency while simultaneously selling another currency; therefore you have an equal opportunity to make a profit no matter what direction the currencies are heading. Another great advantage to consider is that there are currently only fourteen pairs of currencies to trade. Compare those fourteen currencies to the thousands of stocks, options and futures when you're considering the pros and cons of delving into the trading game.
4. Investors and traders are flocking to the forex internet trading as a way to gain a higher leverage to their investments. Some brokers even offer margin ratios of 200/1 in open forex trading accounts. There are also those mini-forex accounts that can be opened for a minimum of $200, offering a margin of 0.5%, where $50 in trading capital will control a ten thousand unit currency position.
The forex prices are often predictable, allowing the currency prices to create trends that can be followed to allow the technically trained forex trader to able to spot, and even take advantage of, the many entry and exit points. One of the best parts about forex trading on the internet is that there is no charges for commissions, any exchange fees or any other hidden fees.
The forex market is a real easy market to train traders about how to trade forex successfully and do forex futures market research since so many traders from various nations of the world actively trade the forex currency markets and other futures markets. The only FX transaction fees come from forex brokers, who only earn a surprisingly small percentage of what the bid/ask price is.
Plus, there is no need to calculate any commodity broker commissions or trade fees when completing a trade and your transactions are made and confirmed electronically in a matter of seconds. Also because this is all done electronically, with no people involved, there is not much to slow your futures trading down.
For the newbie's in the forex trading game, you will need to know the forex terminology. Here is a list of some basic terms and concepts you will need to know in forex trading:
Spot Market - The market for buying and selling currencies that are usually for settlement within 2 business days, also known as the value date. For example: USD/CAD = 1 day.
Exchange Rate - This is when the value of one currency is expressed in the terms of another. For instance, the EUR/USD has an exchange rate of 1.3200, and then 1 Euro is worth 1.3200 USD.
Currency Pair - All currencies must be sold in pairs. There are two currency's that make up an exchange rate, so when one currency is bought, the other is simultaneously sold and vise versa.
Base Currency - This is the first currency in a pair.
Counter Currency - This is the second currency used in a pair. The counter currency can also be known as the "terms" currency.
Broker - This is a firm that will match a buyer to a seller for a small fee or commission.
Sell Quote - This quote is normally displayed on the left side and represents the price that you can sell the base currency for. The sell quote is also referred to as the "bid" price. For instance: EUR/USD quotes 1.3200/03, and then you can sell one Euro for 1.3203 USD.
Buy Quote - This quote is normally displayed on the right side and represents the price that you can buy the base currency for. The buy quote is also referred to as the "ask" or "offer" price. For instance, EUR/USD quotes 1.3200/03, and then you can buy one Euro for 1.3203 USD.
No Nonsense Forex Trading Strategies
When considering forex trading as a profit making venture, it is important to work out winning strategies beforehand if at all possible. Making decisions regarding your forex trading and developing a strategy can be seen as your foundation. With your strategy you will optimize your risk with respect to the expected reward, or put the odds in your favor. Trading strategies should be disciplined and limit risk, while placing you at the most favorable advantage in the market. One strategy is the simple moving away average, which is based on a technical study over twelve periods, with each period fifteen minutes in length. This is a good example of a trading decision that is arrived at through strategy.
A simple algorithm is used in this strategy. When currency price crosses above the twelfth period, simply move away it is a signal to stop and reverse. In this way a long position will be liquidated and a short position will be established, both using market orders. This system will keep trades always in the market, with either a short position or a long position after the first signal.
Another strategy is of support and resistance levels. This is another technical analysis strategy and derives support and resistance. The idea is that the market tends to trade above support levels and trade below resistance levels. If either a support or a resistance level is broken, then the market will follow through is the direction given. These levels can be determined by analysis of the chart and assessment of where the chart has encountered unbroken support or resistance in times past.
One more fx trading strategy which many traders view as exotic is called the balloon strategy. A balloon option is an option that balloons, or increases in size when triggers are reached. For example, if an investor believes that the dollar will gain strength against the Euro in the near future and is currently trading at 100, the investor will see 110 as being strong resistance, but the investor also believes it will be broken. So, rather than buying straight dollars at 100 for the next six months the investor will purchase at "at the money" balloon call with a 110 trigger and multiple of two. The investor will then own a 100 call in USD110mm. But if the dollar and Euro ever trade at or above 110, the 110 call will double to USD 20mm.
The double bottom is another strategy worth looking at. The double bottom is significant to the short term trader as double bottoms indicate a possible major change in sentiment and trend. The pattern is used on all times frames, and many powerful intra day and long term bull markets are conceived from this setup. Double bottoms reflect strong support levels.
When forex prices fail to break support in the down trending markets on more than one occasion we see powerful changes of trend. These reversal signals are meaningful. The most common entry point where a trader will open on a double bottom trade is on a move through the high of the two troughs. This high will represent secondary resistance, and when penetrated confirms a price reversal. The stops are placed around the lows of he patters because a move below lows negates the pattern premise.
Another good potential strategy is the ichimoku chart. These charts are following indicators, which identify support and resistance levels and create trading signals in a way that is similar to moving averages. A big difference however between the two is that the Ichimoku chart lines shift forward in time, creating wider support and resistance zones and decreasing the risk of trading false breakouts. They are calculated using information about trending characteristics and existence of price directional trends, direction, plus support and resistance levels.
The four main lines are:
- Turning Line = (Highest High + Lowest Low) / 2, for the past nine days
- Standard Line = (Highest High + Lowest Low) / 2, for the past twenty-six days
- Leading Span 1 = (Standard Line + Turning Line) / 2, plotted twenty-six days ahead of today
- Leading Span 2 = (Highest High + Lowest Low) / 2, for the past fifty days, plotted twenty-six days ahead of today's date.
- Whichever strategy you choose to use, devote as much study as possible to increase your chances of gain and profit.