Online Forex Trading – to Be a Success Don’t Pay Attention to the News!
Can studying the news help you make profits in online FOREX trading? The answer for most traders is a no.
In fact, paying attention to the news in online FOREX Trading will lose money. Why? Read on and let’s find out.
How and why prices move
In online FOREX trading (and any financial market for that matter) prices move based upon the following equation
Supply & demand fundamentals + Trader psychology = Market price
Which is most important? In today’s markets definitely the latter Why?
Quite simply, markets discount fundamentals quickly and with the internet its done in seconds.
In all corners of the globe the internet delivers information quickly and it’s immediately discounted in the market price.
This means traders make opinions on what will happen in the FUTURE and it is their psychology that is the key to future price direction.
Sure, the papers and news wires are great at telling you why things DID happened and their normally wrong about WHAT will happen.
Traders get deluded by the experts in online FOREX trading and fail to see their wrong most of the time.
Will Rogers once said:
“I only believe what I read in the papers”
Now, he was joking, but most traders take news services as gospel.
Reuters and Bloomberg stories agree with them, so they must be right, is the view of most online FOREX traders. Don’t think so, in fact we know so, based upon the facts and the so called experts past performance.
It’s easy to be wise in hindsight, but looking into the future is much more difficult!
They write stories for a living they DONT trade, traders that are interested in making profits should not be following news stories or media hype.
It’s a fact: Most important market tops and bottoms and formed when the news is most bullish or bearish. When the trends change of course, news wires have an explanation but that does not help you trade!
In the 1987 crash they were bullish in the tech stock boom they were bullish and these are just tow examples of media experts being wrong and there are many others.
Understand the past and look to the future
This is the key to successful online FOREX trading. Quite simply the fundamentals are digested in seconds and reflected in the price.
Its trader psychology that’s important as they look at the future and how they determine the supply and demand situation is reflected in price changes.
Human psychology has remained constant over time and thats why many price patterns are so reliable and point to important market tops and bottoms when the market is either very bullish or bearish.
Of course, prices then go the other way! confounding the so called media experts.
Technical analysis of markets
The only way you can win in online FOREX Trading is to use a technical analysis system that focuses on price.
Why use a technical system in online FOREX trading?
There are two main reasons
1. You will not be distracted by media stories and news hype and will keep your emotions in check.
2. If you are involved in online FOREX trading you can look at charts and see long term trends that last for months or years and many of them (in fact most of them!) run against what the papers and the so called experts say!
To be a success in online FOREX trading all you need to do is focus on these trends and forget the news and media, media experts don’t get paid to trade, they get paid to write stories.
Focus on the reality of the price, not the media hype and you can make big profits in online Forex trading.
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August 20th, 2009 at 10:31 pm
1. Open a demo account.
2. Practise on it for a month or two.
3. Get thoroughly acquainted with the platform, system and methods.
4. Try different demo acounts with forex companies online.
5. After you've trained with your demo account, move on to a real account for live trading.
6. Choose a good broker (eg InterbankFX) supporting the Meta Trader platform. Ask for one that offers a good leverage. It's your key to profiting from the forex markets.
August 20th, 2009 at 10:33 pm
The good thing about forex trading is that you can learn it risk free. Yes, risk free! All you need to do is open a demo account with any forex broker. You can do that in five minutes on the internet and start with forex trading. On the demo account, you will be provided with real time data that you can use to make buy/sell decisions but you will be using fake or virtual money. Since you are not using your real money, you are not going to lose even a single cent.
If you want to play tennis you need to practice. Same with forex trading, with a practice of a few weeks you will be confidant enough to start live trading.
The sites you can refer for forex trading tips, recommendations, news and updates are:
August 21st, 2009 at 5:38 am
Danny B gave you a good advice. Besides that you can read review on that broker to know what traders have been experiencing with them. You can check for reviews on the following places:
http://www.forexpeacearmy.com/public/review/www.etoro.com
http://www.forextopten.com/forex-broker.html
August 21st, 2009 at 6:11 am
Oanda allows you to trade a number of what they call "exotic" currencies including the USD/CNY. The last time I checked though the spread was fairly high.
Good luck.
Paul Upp
August 22nd, 2009 at 6:24 am
Wouldn't it be great to have one broker that does it all?
But a stock broker doesn't have a license to trade commodities, and vice versa.
And wouldn't it be great if you could afford the best in the business, the most advanced technologically, on the cutting edge of online trading?
TerraNova is such a broker. Now you can have your cake and eat it too, and trade anything you wish from one broker, albeit, not from one account. Obviously, the laws cannot be broken. Their subsidiary, or is it parent company, Townsend Electronics, is the one that electronified and digitized the NASDAQ, and I believe they're getting ready to do the American Stock Exchange next.
You'll be amazed at their trading software. I've been using RealTick for over a year, and still haven't learned how to use all of the features.
It's all really incredible. I am just a Day Trader in index futures, and have no association with any of these companies, and have nothing to gain by applauding them; they simply deserve the applause, and you should take the opportunity to check them out.
August 22nd, 2009 at 12:16 pm
August 22nd, 2009 at 10:50 pm
Ultimately, you can check with the Securities and Exchange Commission: http://sec.gov/
I use FXDD and they're for real.
If you already have a futures broker, you can also trade Currency Futures. I also trade the Forex, but I get better fills on the futures.
Actually, I trade the Forex through PermiereTrade software, and most of their customers (over 1,000 on the Message Board) trade through FXDD. But I can choose any broker.
If you don't already have charting software and a data feed, this may well be what you should be concentrating on. Of the legitimate brokers, they're all pretty much the same, if the spreads are comparable. You shouldn't pay over 2 or 3 pip spread on the majors, definately something to ask about.
On the futures, you pay a commission, rather than a spread difference, and they are in points, rather than pips. The currency futures are just like any other commodity. I use a very professional charting and trading platform called RealTick, through TerraNovaOnline; state-of-the-art stuff, technically oriented. TerraNova is the home of the Day Trader. I can trade currency futures for $11 roundtrip, which is not possible on the Forex. I pay $200/month for RealTick, but I think you can get their Investor package for free, which is RealTick just sized down to one screen. I use five 21" monitors. But Investor would be a good starting point. Check out their free trial offer.
http://terranovaonline.com/
Here is PremiereTrade's website:
http://www.premieretradeai.com/index.php
The great thing about PremiereTrade is their Message Boards and their Live Trader Commentary, and the ability to speak with their traders at any time. Keeping you informed is their business, and this is real unusual. They do not tell you when to trade, the software does that, but you are always informed; a definate plus.
Other Forex sites:
http://www.dailyfx.com/
http://www.forexnews.com/
Here's a good Forex educational site:
http://www.babypips.com/forex-school/market-hours.html
And here's another legitimate broker, this one international:
http://www.gftforex.com/land/index.asp?aid=500
August 23rd, 2009 at 1:09 am
THIS IS THE MAIL I RECEIVED A FEW DAYS BACK, TRY IT, ALL THE BEST
Dear Kalra,
Thank you for your recent request for information on FOREX.com. I'm pleased to provide more details on opening an account and looking forward to servicing your Forex needs.
Getting started couldn't be easier.
Complete Application
You can apply online or click here to download an account application. Many clients find the online application the most convenient method of setting up their account.
Once your account is processed, you simply need to fund and you can get started trading right away.
There are several options for funding your account:
Credit Card – the fastest and most convenient way
Wire Transfer
Bank or Cashier's Check
Personal or Business Check
Should you have any additional questions, please do not hesitate to contact me at (646) 649-8810 or jdash@forex.com. I'm looking forward to having you trade with FOREX.com.
Sincerely,
John Dash