EA Pyramid Ultimate v.2008

DOWNLOAD = EA Pyramid Ultimate v.2008

The Best Time of Day to Trade

Although a Forex trading day runs 24 hours a day, 5-1/2 days a week, each day is typically divided into the Asian session, the European session and the New York session.

Volatility generally increases dramatically with the opening of each market. Check out your price chart and you will likely notice changes often occur as a new session begins.

Depending on your currency, certain times will usually be quiet, while others will be volatile. Study your time charts and the most active times will be obvious.

Pay close attention to the data calendar as well, as volatility is also unpredictable during data releases.

Choosing the Best Choosing the Best - Part of a Solid Forex Strategy

One of the biggest mistakes traders make is looking at a Forex trading time frame which is too short. Virtually all online trading platforms have the ability to show you time frame charts with everything from "ticks" of several seconds, to 1 minute, 2 minute, 5 minute and so on up to monthly periods.

As shown in the Trading Platforms - Broker area, it is in your Broker's best interest if you trade more often, but not yours. These shorter time charts do nothing good for you, but rather tend to give you a false sense that you are following a trend.

As we all know, the safest Forex strategy is to determine the major trend, then jump aboard for a ride. Trading against the trend, something you could easily do if not using a suitable Forex trading time frame, places you at greater risk of your trade going against you.

Your Forex strategy should include using longer time periods when determining the trend. Don't even look at Forex trading time price charts with a period of less than 1 hour, unless you are a very well experienced trader.

When considering a trade, check 3 time frames... the 1 hour, 4 hour and daily for the currency pair. If each of these is trending in the same direction, it's a pretty solid piece of information.

As you can see by the picture below, a simple candlestick chart with a 50 period simple moving average to smooth the data will clearly indicate the underlying trend...

Price movements occur during the day to day business of Forex. Large central banks cause price fluctuations just by repatriating money from their country to others.

These random movements (which are not caused by the typical drivers such as data releases) may give the false illusion of trend changes on shorter time period charts. This same activity on a longer term chart simply appears as "part of the flow", as it should.

Use a longer Forex trading time frame and reduce the chances of false signals.

Choosing a Forex Online Trading System or Forex Trading Platform is a lot like Finding the Perfect New Car...

If there was a perfect Forex indicator, everybody and their brother would be scooping bucket-loads of cash from the market regularly. The fact they aren't tells us something very important. One of the reasons they aren't perfect is covered in the link Looking Back.

Technical indicators are commonly used for Forex analysis, but a strong reliance on any of them is going to give you false sense of security. I cover the usual ones in the links below, but be sure to read the part about the limitations of each.

With the decentralized nature of Forex, there is no way to get a "Volume" component for the typical technical indicators common to stock and options trading. Traders have no reliable way of knowing "how much" of any currency is being bought or sold at any point in time.
There are a few Forex indicators which have shown an ability to reflect "Market Sentiment". The importance of knowing this sentiment becomes clearer once we fully explore what the Pro's are using in their toolkits.
According to surveys, the "really big" players, the one's with the resources to move the market (ie. the Central Banks, multi-billion dollar funds, etc.) rely on technical indicators to provide them with less than 25% of the information they base their trading decisions upon! In other words, 75% of the inputs used for making trading decisions have no basis in technical analysis! See "The Big Guys" below for more on this.
Your "Common Sense" is one of the best signals at your disposal. You need to learn to trust your own brain. The link below helps explain why.
Finding the "Right" collection of indicators to suit
your trading will take some experimenting.
Most of the trading platforms on offer for the "Spec" trader these days have enough "built-in" technical indicators to choke a horse. My advice to you is to not "bet the farm" on any one of them.
Your winning trading system will consist of many bits of information. The ability to separate the useful from the useless and apply them as your perfect Forex indicator is something you'll have to experiment with. The only indicators that are worth anything, are the ones you trust.
Use your demo account trading experience to try various indicators and then decide which ones are right for you. As I mentioned above, the Pro's only put, on average, 25% of their faith into technical indicators.

Finding an Accurate Forex Indicator - The Truths and Myths Behind the Popular Ones

If there was a perfect Forex indicator, everybody and their brother would be scooping bucket-loads of cash from the market regularly. The fact they aren't tells us something very important. One of the reasons they aren't perfect is covered in the link Looking Back.

Technical indicators are commonly used for Forex analysis, but a strong reliance on any of them is going to give you false sense of security. I cover the usual ones in the links below, but be sure to read the part about the limitations of each.

With the decentralized nature of Forex, there is no way to get a "Volume" component for the typical technical indicators common to stock and options trading. Traders have no reliable way of knowing "how much" of any currency is being bought or sold at any point in time.

There are a few Forex indicators which have shown an ability to reflect "Market Sentiment". The importance of knowing this sentiment becomes clearer once we fully explore what the Pro's are using in their toolkits.

According to surveys, the "really big" players, the one's with the resources to move the market (ie. the Central Banks, multi-billion dollar funds, etc.) rely on technical indicators to provide them with less than 25% of the information they base their trading decisions upon! In other words, 75% of the inputs used for making trading decisions have no basis in technical analysis! See "The Big Guys" below for more on this.

Your "Common Sense" is one of the best signals at your disposal. You need to learn to trust your own brain. The link below helps explain why.

Finding the "Right" collection of indicators to suit
your trading will take some experimenting.

Most of the trading platforms on offer for the "Spec" trader these days have enough "built-in" technical indicators to choke a horse. My advice to you is to not "bet the farm" on any one of them.

Your winning trading system will consist of many bits of information. The ability to separate the useful from the useless and apply them as your perfect Forex indicator is something you'll have to experiment with. The only indicators that are worth anything, are the ones you trust.

Use your demo account trading experience to try various indicators and then decide which ones are right for you. As I mentioned above, the Pro's only put, on average, 25% of their faith into technical indicators.

Understanding Forex Risk

Forex risk is a subject that deserves careful consideration. Individuals who have found the key to trading Forex have probably lost all the funds in their trading account... more than twice.

You can make money trading Forex, but there are no guarantees you will make money.

It is generally accepted that a new Forex trader
will lose their trading funds five times before
they begin to show consistent profits.

There are a HUGE number of traps, any one of which is capable of swallowing your trading account whole! Do yourself a favor... pay very close attention to the risk statements which most brokerage firms have you sign. Not only is there a risk of you "trading away" all your capital, but there is also a danger the brokerage operation themselves may go under, taking your money with them.

There are ways to reduce your exposure to Forex risk... but you can never completely eliminate it. Do not, for even an instant, believe claims of guaranteed success from "system sellers" out there.

There are, however, many things you can do as part of your risk management to swing the "odds" of success in your favor.

You cannot buy a "system" that will
guarantee trading profits

To help minimize Forex risk, check out my collection of "Must Do's" here before you start trading with "real money."

Never Trade with Money You Can't Afford to Lose!

Here is something to think about...

When trading, prices either move up or down. They never stay the same. Your goal, as a trader, is to speculate which way the price is likely to move, trade in that direction and then exit your trade with a profit. Sounds simple enough!

Professional traders generally agree on the following - give 2 new traders an equal amount of money, have them trade a position in opposite directions, and they are likely to both lose money. Try this same tactic on 2 experienced traders, and they are likely to both make money!

A Conclusion? You have your work cut out for you to become a trader who takes profits from the market. Read and understand everything I offer you on this website... it will help you become a better trader, which in itself will help reduce your Forex risk.

Disclaimer

Forex trading is not appropriate for everyone. There is a substantial risk of loss associated with trading this market. There has been no system or method developed that can guarantee profits or ensure freedom from losses. Losses can and will occur. No representation or implication is being made that using the information on this website or any of the material available for download will generate profits or ensure freedom from losses. This material is for informational purposes only.

10 Forex Trading Essentials that can Improve Your Trading Immediately

Here is my list of 10 Forex trading essentials. Compare your trading style against this list and if you are struggling to make profits, try these suggestions...

1) Increase your time perspective - If you are not a well seasoned Forex trader, you shouldn't even look at a price chart of less than 60 minutes. The randomness of the "normal" transactions which occur in Forex will distort your judgment of the "true picture." Use longer time frames, such as 60 minute, 4 hour and daily charts when planning your trades.

2) Reduce your position size to 5% Maximum - Having more than 3 to 5 percent of your trading capital "on the table" is a major "no no". High leverage makes it sooooo easy to get in, way over your head. This combination snares many traders and can rapidly destroy your account. You need to have the ability to ride the volatility waves common in Forex.

3) Give your trade time to work - You can only use this option effectively if your position is sized safely... as per 2) above. Prices will fluctuate dramatically in Forex, and you need to be sure that a "loss really is a loss" before you close a trade that is moving against your plan. A 30 pip stop loss will often kick you out of a trade, just as it's about to turn in your direction. You need to allow for larger price swings... if you have determined the major price trend, be patient and let the odds work in your favor.

4) Reduce your dependence on technical indicators - Due to the fact that technical indicators get their data from past events, the reality is they have no ability to predict the future. Pro's that enjoy success using these indicators, often profit from the knowledge of how "the masses" are likely to react to this data, rather than the information itself. You need to determine the major trend (a simple moving average will show you this) and hop aboard. Use a longer time frame, as in 1). The largest players in Forex, rely about 25% on technical indicators when making their trading decisions.

5) Trade only one or two currency pairs - And stick to the majors... not the crosses. Currency prices are driven primarily by fundamental data. In order to anticipate what is likely "coming down the road", you need to follow some basic data for each of the countries involved. Trading too many currencies will make it difficult to keep up to date. There is equal opportunity to profit from each of the pairs, so wait until your experience level has matured and the information tends to "sink in" without as much effort on your part before you start to trade more currencies.

6) Average in and out of your trades - If your trading account is less than $10,000 have your broker enable mini-lots for your account. This will allow you to average in and out of your trades... a real "plus" as you will see on the Forex Strategy page. If this applies to you and your broker doesn't offer mini lots, find a new broker... this is an important "need to do".

7) Follow the data for your currency pair(s) - Know what data is pending for release. Volatility often increases dramatically when these releases occur. The safe strategy is to exit your positions prior to major releases... this is the way many of the larger accounts handle these situations. Data releases can often cause a change to the trend. Take them seriously.

8) Determine the trend and get aboard - As with any type of trading, the safest bet is to determine which way prices are trending, and then trade in that direction. You don't need anything fancy... a simple moving average on your candlestick chart is sufficient. Zoom your chart out to be sure you have the "big picture". Compare where the price is now, relative to where is has been for a significant amount of time (at least a month). Use caution if the current price is near upper or lower extremes, as there may be a trend change once that extreme is reached.

9) Know when to take a profit - A winning position can quickly turn into a loser if you set your sights too high. Don't be afraid to take your profit - or a part of your profit at 20 or 30 pips. The price waves in Forex make it ideally suited to averaging into and out of positions by using multiple entry and exit points for each position. The benefit of spreading out your position is that your overall risk is reduced. See the strategy pages for more on this one.

10) Stop listening to "Gurus" - Don't fall into the trap of believing everything, or even "most" things, you hear. The trading world is overflowing with gurus only too willing to offer their opinion on the future. It will only be an opinion, nothing more. They may seem to have convincing data, but trust your own brain. You need to weigh the economic data from "your" countries... that is what drives currency prices. The enormous size and nature of Forex ensure there is no "insider information". You have access to the same data as everyone else in the game. In time, your own instinct will guide you to your goals, and that is what you need to trust.


These 10 Forex trading essentials are a high-level peek at the pitfalls that catch many traders. Each of these are more completely explained throughout this website. Compare your trading style with these simple "fixes" and if you are not employing some or all of them, you are placing yourself at a higher risk level.