Category: Forex Strategy
There are so many online Forex tutorials these days that it is often difficult to know if you’ve made the right choice. Anyone interested in becoming a successful currency trader must invest his time and sometimes money to learn all there is to know about the Forex markets and how to go about making the best trades.
Many brokers offer their own tutorials on the subject but there are several drawbacks to depending on these types of courses. Brokers are out to make money and by providing potential traders the basic tools for trading, a novice trader will be inclined to open an account with the broker at the end of the course. Whether intentional or not, a broker’s instructional track is usually not altogether objective and is skewed in the direction the broker wants the trader to take.
In addition, most of the educational material offered by a broker is usually limited in scope. Mostly it boils down to a few videos or textual classes with explanations that can be easily found anywhere on the Internet.
FX Academy, which was launched recently, is a different type of Forex course. Because it was developed and is maintained by DailyForex.com, an independent news and broker review service, it is a totally objective and not beholden to any one broker.
Fx Academy is the first totally interactive Forex curriculum. Its 28 lessons spans topics from the very basics of Forex to the more intricate tools used in Forex technical analysis.
The lessons at FX Academy were conceived by Forex specialists who have years of experience in Forex markets. FX Academy was built with the beginner trader in mind and traders can move along at their own pace in the relaxed, atmosphere of their own home. The first few lessons cover the basic concepts with which every Forex trader should be familiar. The courses advance in order of their complexity and that’s what makes FX Academy suitable both beginning and advanced traders.
Video, Quiz and More Reading
Each lesson comes complete with a delightful animated video, a quiz consisting of about 5 questions each and additional reading suggestions to help the student get a broader picture of the topic being discussed. Some lessons come with trader simulators to make the covered material come alive. In addition, FX Academy has developed its own unique Forex Strategy Simulations, a valuable tool that can assist students in defining their personal trading strategies for the future.
The quiz at the end of each lesson tests the student on what he/she has learned and an award system assigns points to the student for completing each lesson and passing the quiz. These points accumulate and can be used toward certification at the completion of the course.
There’s something more to FX Academy than just a bunch of great features. The people behind the scenes are always available to help the student when needed and they can be accessed through Chat, email or phone. FX Academy is also on Facebook and Twitter so it makes it easy to connect.
FX Academy is a total educational experience. And let’s not forgot that FX Academy is completely free. You don’t have to sign up with a broker, there are no hidden charges and the vast amount of information offered is unprecedented in the industry. So if you are looking to start learning about Forex or if you are already involved in trading Forex but need additional instruction to increase your profits, have a look at FX Academy.com.
What is the best forex trading method in existence
It’s a silly question really – ‘what is the best trading method?’ – because to each trader and each situation, the answer is going to have a number of different options. There is not simply a single method which constitutes the best trading method, because the fact is there are several out there each as successful as each other in different ways. The secret is sticking to your trading method and planning for the worst. These two points constitute the best trading method around, because they are going to make you a successful trader in the long run.
Many traders disregard the benefits to be gained from planning for the worst, with the mistaken belief that the best trading methods derive from focussing on the best. Planning for the worst will cover your winning trades and your losing trades. Here’s how.
Why it’s good to plan for the worst
Why plan for the worst? A lot of traders have the potential to do great things with their skill, but are hindered by one major error which renders even the best trading method pointless: planning for the best.
The fact is, we all want the best outcome. You’d be daft not to. But here’s the clincher: If the best outcome falls into place, then providing you’re sticking to your foreign currency trading system then there is nothing you need to do. Why would you make plans based on an eventuality which, if it comes about, would require you to do nothing?
Your best option is to plan for the worst. Nobody wants the worst to happen – and this is what makes planning for the worst so difficult. By planning for the worst, it is almost like allowing yourself to believe that it might happen. But the best trading methods out there always plan for the worst, because it will benefit you as follows:
- If the best outcome occurs, you’re a winner
- If the worst outcome occurs, you’re prepared and able to deal with it
But isn’t the best trading method all about numbers, figures and facts?
This fact is absolutely true – but the best trading method is useless if you can’t follow it. If you focus on the winning points and neglect the losing points, it’s those which are going to rise out of the darkness and snap you up when you least expect it – when in reality, you should have expected it, should have anticipated it and should have been equipped and prepared to deal with it.
The wins come from the consistent application of a solid trading system. The success comes from your ability to follow such system. These two points combined make the best trading method any trader could possess.
I have always had a preference for price action analysis over Forex indicators. However, I use indicators occasionally to confirm my bias obtained from price action analysis. The mistakes most beginners make are assuming that there is a magic Forex indicator that can replace the “leg work” of price action analysis. They assume that the formula will make trading easier. The reason beginners fall into this trap is because of the fancy marketers who promote get- rich-quick, pie-in-the-sky, over-hyped, super Forex indicators. Do not fall for the illusion of Forex indicators.
An indicator is a visual representation of a mathematical formula based on change in price and volume of a security. There are hundreds if not thousands of Forex indicators out there, claiming to be the Holy Grail. Hey! Newsflash! It does not exist. If it does, it will not be for sale on the market. Remember derivatives in high school calculus? A derivative represents change of one variable with respect to another. Indicators are a derivative of price action with respect to time. Therefore, price action must happen before the indicator can reflect it. In other words, you cannot measure change until it happens. But, as traders, we profit from the change, so trading change that has happened is totally useless to us. This means that every trade based on indicators will get you into the trade too late majority of the time. You will be trading sub-optimally. It is better to use as a confirmation of price action, as supposed to using as it as a predictor.
My recommendation is to start with one or two moving averages. Otherwise, the illusion of Forex indicators will have you more confused than ever. There are so many variations, but a good place to start is the 50 exponential and the 200 exponential moving averages. When the 50 is beneath the 200 EMA, the trend should be bearish, and when the 50 EMA is above the EMA, the trend should be bullish. Notice I say “should”. These are not arbitrary numbers. Majority of the market analysts use these numbers as an overall picture of price action. If you follow my trend analysis method (discussed thoroughly in the course), you will be ahead the pack and you will see how much Forex indicators tend to lag true price action analysis.
One of the most profitable Forex System Trading is the one which exploits Price Action to determine optimal entry and exit levels. Understanding this fundamental concept allows trader to use more advanced strategies which lead to quantify the potential profit targets and exits with proper risk management elements which defines optimal entries and exits with respect to key market levels.
The Price Action method is an extremely profitable and viable Forex trading strategy. The reason why Forex System Trading based on Price Action it is much more powerful and accurate is due to the fact that Price is “Current” and leading indicator. The market moves in a certain way because of human’s emotions like Fear and Greed impacting market direction. This could be measured in equation which is direct relation of lacking of one force over another.
Understanding market structure should be first and foremost, without it, you will often be lost, and trade fundamentally incorrect. There is NO indicator that can replace this essential principle. Anything an indicator tells you is derived from price, so you MUST have an understanding of price itself.
When you are analysing the trade setups as they develop in current period of time, the Price Action will provide you with high probability Forex System Trading setups that can help you time your entries into the market much better and more accurately than most lagging indicator methods can. If you keep trying to interpret several indicators’ representation of past price movement your move will be always delayed and chances on profitable setups decreased. The principle of Price Action and successful Forex System Trading is to enter the market as close to a turning point or trend renewal point as possible.
There are obviously some other complementary methods to Price Action trading Forex. The very best set ups are when several levels converge together. We call these areas confluence zones or confluence areas. This increases the likelihood that our entries and exits are likely to be correct.
Before executing a trade, profit targets and exits should be clearly quantified. Failing to do so will wreak havoc on your trading results. Most novices tend to focus on getting into a trade, but have no idea what to do afterwards. Answer this question. If you had 5 miles left in your gas tank and you didn’t know where the nearest gas station was, would you risk driving around in circles looking for the gas station? Or would you pull over and use a GPS? Well, trading should be the same. Know where you want to go before you enter your trade. Your analysis is your GPS, so make sure you have full tank and let the journey begins…
Forex Trader's personality influences the interpretation of the Forex market, making it a key aspect of success or failure. This personality needs to be a refection of trader methodology; otherwise it is very common to fall into mental state in which it’s virtually impossible to follow the strategy plan. Vital element which formulates successful trading plan is to develop skills to quickly eliminate hazardous trades and look for best quality setups with the highest probability of winning. With enough practice it shouldn’t take you more than couple of minutes per trade.
If you followed Forex Price Volatility strategy, in order to determine the entry, you need to create a ZONE and mark trenches for position building all the way with increments in position size in contra-direction of the predefined move with reference to ZONE’s (scaling in).
Very good setup is when there are levels on the top of levels in close proximity. In such circumstances a multiply ZONES could be created with increment position sizes within ZONE’s levels.
It’s important to define as many evidence that is possible about best quality trade and combine all of confluence elements together. Next step is to define a risk out of the trade through the process I’ve described in Chapter 4 of my book.
Before putting on a trade, the risk and profit potential needs to be CLEARLY defined. Before making decision to get into a trade the first factor you should have in mind is your PROFIT potential and EXIT point. Most of the novices are planning the trade from the where to get in stand point. Don't do that same mistake. Plan your exit and profit targets before you make decision to enter.
Once you’ve entered a trade, manage it as planned! For more information about position building and management tactics please refer to chapter about scaling out on fractals in “Speaking Language of Forex Market”. Bear these rules in mind and don’t change your tactics in the middle of a trade if you don’t want to contribute to the market fresh capital supply. Read on Scribd...