Should new Forex traders take Forex trading courses or join a Forex training program? Definitely yes; by now you have probably heard that only 5% of traders achieve consistent profitable results when trading the Forex market. The main reason for this is the lack of education. Don’t get me wrong here, taking a Forex training program or a Forex trading course won’t guarantee profitable results, nothing can, but choosing the right Forex training program or Forex trading course will definitely put the odds in your favor.

Before spending any amount of money on any Forex trading course or Forex training program there are some important aspects you need to take in consideration. There are many training programs available, but not every one of them suits the needs of every trader.

The first thing you should be looking in a Forex training program is the content of the material. Unfortunately, most courses or training programs focus or spend most of the time on basic concepts. Though these basic concepts are important, spending most of the course on them won’t help the trader to make consistent results.

The following subjects are what I consider the most important aspects of trading and every training program or trading course should address:

Forex trading basics.
Review basic concepts such as: margin, type of orders, a little background, bid/ask, rollover, etc. You need to make sure you understand every single concept to perfection.

Main drawbacks of Forex traders.
Being aware of the common mistakes made by Forex traders and knowing how to handle them will prevent new traders from making those mistakes.

Technical and fundamental analysis.
These are the two main approaches adopted by Forex traders. Knowing how to properly apply each concept will definitely put the odds in your favor.

The three pillars of Forex trading. I consider that these three subjects have the most impact on every trader trading account.

Forex trading system development.
Having the right system is a must if you want to have consistent profitable results. Having a system that doesn’t fit you will cause a series of problems that will make your trading account vanish away (second guessing the system, not following your system, etc.)

Money management.
This is considered by many successful traders to be the most important single aspect of trading. Money management helps to increase your profits geometrically and at the same time limit your losses (i.e. a good risk reward ratio of about 2:1 will make you money in a Forex trading system that is right only 38% of the time.)

Trading psychology.
Being aware and knowing hot to handle the psychological barriers that affect every trader decision will put the odds in your favor.

Other important aspects every training program should include are: Developing habits for success (such as discipline patience, taking responsibility of every action, commitment, etc.,) understanding and taking our trading as a business, risk and trade management.

Another important aspect you should take into consideration when choosing a Forex training program is the mechanics of it, getting to know how the training program works.

A good course will have the following:

A live conference room, where you can apply everything learned under live market conditions.

One-on-one feedback, every trader has different needs and requires special attention. For instance a trader wanting to improve the system and requires individual feedback from the instructor about it.

Online trading course, a course that could be accessible through internet. A plus is a course where you are able to access the course at the convenient time for you, so you don’t have to change your lifestyle.

A forum, where members can talk just about everything related to the Forex market and the Forex training program.

Trading the Forex market is no easy task. It requires a lot of hard work. Making the right decision will definitely put the odds in your favor. Take your time when doing your diligence because it is a big and important step in a trader’s trading career.
Author: Raul Lopez

Fibonacci forex trading is the basis of many forex trading systems used by a great number of professional forex brokers around the globe, and many billions of dollars are profitable traded every year based on these trading techniques.

Fibonacci was an Italian mathematician and he is best remembered by his world famous Fibonacci sequence, the definition of this sequence is that it’s formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13 …But in the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc.

These ratios are mathematical proportions prevalent in many places and structures in nature, as well as in many man made creations.

Forex trading can greatly benefit form this mathematical proportions due to the fact that the oscillations observed in forex charts, where prices are visibly changing in an oscillatory pattern, follow Fibonacci ratios very closely as indicators of resistance and support levels; maybe not to the last cent, but so close as to be really amazing.

Fibonacci price points, or levels, for any forex currency pair can be calculated in advance so that the trader will know when to enter or exit the market if the prediction given by the Fibonacci forex day trading system he uses fulfills its predictions.

Many people tries to make this analysis overly complicated scaring away many new forex traders that are just beginning to understand how the forex market works and how to make a profit in it. But this is not how it has to be. I can’t say it’s a simple concept but it is quite understandable for any trader once he or she has grasped the basics and has had some practice trading using Fibonacci levels along with other secondary indicators that will help to improve the accuracy of the entry and exit point for every particular trade.
Author: Adrian Pablo

So you want to become a trader? Do you know what type of trader you want to be? Scalp trader, day trader, swing trader or position trader? Once you break it down by timeframes and trading styles it’s only by experimentation that you will truly find what fits your personality and comfort level which will make you the most efficient trader you can be. Let’s start with the floor trader.

Floor Trader

Now if you are really serious, you can pursue a career as a floor trader. For the most part, floor traders work for “ticks” to make their living, trading by buying the bid and selling off the offer and making hundreds and even thousand of trades a day to earn their pay. Their style of trading is called scalping. Just because someone is a floor trader does not mean they have to trade all day long making all those trades as a scalper. There are some floor traders who choose to trade the first half-hour after the opening bell and come back a half-hour before the closing bell; that is where you will find the most liquidity in the market you are trading. Some floor traders actually buy or sell and hold a position throughout the trading day, know as intra-day swing trading, and some will even hold a position over night looking for a multiple-day swing trade.

The key factor is floor traders find what they are comfortable with and what works for them, an idea that applies to all of us. If floor trading is an option you are thinking about, you have to live in a city that has an exchange. Bring your checkbook; some of these seats cost more than $1 million to give you the privilege to become a floor trader. You can also lease a seat, but depending on the exchange, the lease can run up to $4,000 a month or more, so to say you need to be active is an understatement.

Trading off the Floor

Trading off the floor is the most logical option for most traders because of the cost needed to either rent or buy an exchange seat and the large capital needed to get started. Trading off the floor requires a fraction of the capital needed to get started as a floor trader. If you want to trade electronically, there are a number of brokerage houses to choose from that offer low commissions and low margin requirements. The biggest factor is you can live for the most part anywhere in the world and trade from any computer with a realiable Internet connection.

Day Trading

Day traders go home at the end of the trading day flat with no open positions, but day trading styles vary. With the efficiency of the electronic trading platforms, you can actually scalp from a computer just like a floor trader scalps in the pits. Other styles of day trading include trading the intra-day trends, trading off gap areas and range-bound trading of support and resistance levels. All day trading styles end the trading day with no positions. If you like the idea of a longer-term trade, you can swing trade holding onto a position over night, looking for a move lasting several days or weeks.

Finding your style

Once you are ready to trade, the big question is what type of trader do you intend to be. What time frame charts will you look at to help you decide when to trade? Will you only look at five-minute charts or multiple time frame charts to help you in making a trading descion. Are you thinking about using overlapping patterns, incorporating different time frames or scalping off the one-minute chart? These are questions you’ll need to answer. But these answers come from real-time live trading experiences, and you must begin the process of finding what will work for you and more important, what you will be most comfortable with.

Some traders find that too much activity causes stress and creates loss of focus; for others the feeling of being right or wrong within seconds or minutes fits their personality. Still, other traders might like less activity and trade less frequently while risking more on fewer trades. Finding what works for you is the key, and what you find that works for you might not work for others. So do not try to copy someone else’s success story.

Regardless if you are just starting out as a new trader or an experienced trader looking to improve your results, there are clues from your own past that can help determine how active of a trader you may want to be and what style fits you best. A key exercise I suggest you go through is to make a list of all your accomplishments and failures. Go through each accomplishment and failure individually and see if you notice personality traits that helped achieve successes and if traits you were lacking could have helped you achieve the success you were looking for in the list of the failures.

Examples of what you are looking for are:

1. Did you have a burning desire? 2. Did you create goals? 3. Did you have a well thought out plan? 4. Did you have a positive attitude? 5. Did you have great confidence? 6. Were you decisive? 7. Did you have patience? 8. Did you have discipline? 9. Did you take on risk? 10. Were you persistent?

For those who have read my past articles, the September 2003 article titled “Are You Trading In The Zone?” consists of most of these components. The key is knowing yourself. Knowing your limits and your abilities. Knowing when you need to push yourself harder and knowing when to lighten up on the pedal to ease the pressure off yourself. Raising your own level of self-awareness.

You may ask yourself “What does this have to do with trying to figure out what time frame and what trading style fits me?” Clearly the more you know about yourself, the less time it will take you to find your comfort level and most efficient style of trading to help you meet your trading goals. By getting more in tune with yourself, you will have a better idea what time frame you should be trading and what trading style fits you best. If you lack patience, as an example, a smaller time frame might work best for you.

Regardless of the time frame you trade, you should start at a larger time frame and work your way down to the lower time frames. Every day after the market closes, I take a look at the monthly charts and work down to the weekly, daily, then to the 60-, 15- and finally five-minute charts. For most day traders, the five-minute chart is common to trade off of. However even if the five-minute chart becomes your primary time frame to trade from, it is a good idea to see what is happening on the higher time frame charts.

What are the key levels on the monthly chart? What are the next significant retracement levels that you would never see, if all you were only looking at was a 60-minute chart or a five-minute chart. Dropping it down to a weekly chart, you get a closer look at more recent key levels. The process continues down to the five-minute chart. By looking at all key time frames, you will have a better understanding and awareness of multiple time frame patterns. Even if you find that your best combination of time frames to trade from is a 60-minute with a five-minute, it’s still best to look at the larger frame charts. Becoming aware of all time frames and their patterns is a key factor in understanding the whole picture. Understanding the whole picture will help you make better trading decisions.

Now you are ready for the experimenting process to see what is the best time frame for you to trade. Now is the time to see if you are more of a trend trader or a trader who gets in and out quickly. This is a very important stage, and it is important you keep a detailed diary of your personal feelings when trading. You may find that you thought you wanted to trade more frequently than what is best for you in the long run. You may find it’s best to trade only a few times a day versus 10 times a day. There is no right or wrong answer to finding what fits your comfort zone and trading zone the best. Take your time through this process, as this is one of the most important exercises you will do for yourself to put you in the direction to achieve your trading goals. Learn what fits your comfort level, learn what time frame is best for you and pay close attention to the components of Trading In The Zone to achieve your success as a trader. Remember, this is a process and it will take time to find what time frame and trading style fit you the best. Take your time and listen to yourself through this process.
Author: Steve Rifkin

Why should you consider foreign exchange, or forex trading? One compelling reason is that it is a huge business, trading nearly two trillion U.S. dollars on a daily basis. The potential to make money is out there for the well-informed trader. The forex market is the largest in the world. It is larger than the U.S. stock market, and has a daily trading volume larger than all the world’s stock markets combined. The following list provides a few reasons why forex trading is a smart move.

It’s Easy

If the idea of trading on the stock market is intimidating, you’re not alone. There is no way that anyone, including professional brokers, can know enough about all the stock options. Therefore, many traders specialize or focus on particular areas of the stock market, and many individuals are left to rely on the opinions of the professionals, who may or may not be good at their craft.

Trading on the forex market, in contrast, is much simpler. The primary currencies traded are the U.S. dollar, the Japanese yen, and the British pound. There is less to keep track of, so conducting research and analysis can be much easier.

You Can Do it from Home

If you’re interested in getting involved in forex trading, all you need is a computer and a bit of time. Granted, conducting some research is wise if you want to make the best choices. But once you have an idea of your strategy, you can conduct transactions online for minimal fees and without having to pay a professional to do it for you (although this is an option). There are a number of online options for trading foreign exchange, so you’ll need to conduct some research to determine the best choice for you. If you know others who trade this way, ask for their preferences. Conducting a simple Google search on forex trading will yield many results, so review and choose carefully.

The Investment is Minimal

To get involved in currency trading, you do not need to invest a lot of cash upfront. Many trading options are available for a small investment, some as low as a few hundred dollars. This allows new traders in particular to get involved, learn the process, and risk very little. To trade in the forex market, you need to determine your risk limit, and not invest above that amount. Because the initial investment can be low, many people can get involved that may not be able to invest in other options, such as traditional stocks. Forex trading is a good way to enter the trading market.

You Can Make Money

While trading on the forex market takes some research, skill, and a bit of luck, it is possible to make money. The potential for huge payoffs is at times exaggerated, but there are traders making large amounts of money in this market. The key is to learn what you are doing and make smart choices. This can include determining how much you are able and willing to risk, taking risks when necessary, and learning as much as you can about the market. Trading on the forex market also offers you more leverage than in other markets. You can use smaller amounts of money to your advantage, and the trading process is simpler than in other markets.

It’s Flexible

Trading on the Foreign Exchange market is a twenty-four hour process, which means that you don’t need to wait for the opening and closing of the exchange to know where you stand. You can make trades at any time of the day, which gives you much more control than if you are operating in the traditional stock market. This also allows traders to respond to breaking news immediately. The advantages of real-time trading are advantageous in that traders have a much better understanding of their investments. Conversely, in the traditional stock market, after-hours activities, for example, can affect stock values, but the affects are not immediately available.

If you’re interested in trading on the forex market, do your research. Many trading companies provide free information online. The more you know, the better you decisions you’ll be able to make. Many of these same companies offer free trial periods as well, which you can use to get your feet wet and determine if currency trading is for you.
Author: Mike Singh

It is useful to have a map and be able to see where the price is relative to previous market action. This way we can see how is the sentiment of traders and investors at any given moment, it also gives us a general idea of where the market is heading during the day. This information can help us decide which way to trade.

Pivot points, a technique developed by floor traders, help us see where the price is relative to previous market action.

As a definition, a pivot point is a turning point or condition. The same applies to the Forex market, the pivot point is a level in which the sentiment of the market changes from “bull” to “bear” or vice versa. If the market breaks this level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand, if the market breaks this level down, then the sentiment is bear, and it is expected to continue its way down. Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible.

Pivot points work best on highly liquid markets, like the spot currency market, but they can also be used in other markets as well.

Pivot Points

In a few words, pivot point is a level in which the sentiment of traders and investors changes from bull to bear or vice versa.

Why PP work? They work simply because many individual traders and investors use and trust them, as well as bank and institutional traders. It is known to every trader that the pivot point is an important measure of strength and weakness of any market.

Calculating pivot points There are several ways to arrive to the Pivot point. The method we found to have the most accurate results is calculated by taking the average of the high, low and close of a previous period (or session).

Pivot point (PP) = (High + Low + Close) / 3

Take for instance the following EUR/USD information from the previous session:

Open: 1.2386
High: 1.2474
Low: 1.2376
Close: 1.2458

The PP would be,
PP = (1.2474 + 1.2376 + 1.2458) / 3 = 1.2439

What does this number tell us? It simply tells us that if the market is trading above 1.2439, Bulls are winning the battle pushing the prices higher. And if the market is trading below this 1.2439 the bears are winning the battle pulling prices lower. On both cases this condition is likely to sustain until the next session.

Since the Forex market is a 24hr market (no close or open from day to day) there is a eternal battle on deciding at white time we should take the open, close, high and low from each session. From our point of view, the times that produce more accurate predictions is taking the open at 00:00 GMT and the close at 23:59 GMT.

Besides the calculation of the PP, there are other support and resistance levels that are calculated taking the PP as a reference.

Support 1 (S1) = (PP * 2) – H
Resistance 1 (R1) = (PP * 2) – L
Support 2 (S2) = PP – (R1 – S1)
Resistance 2 (R2) = PP + (R1 – S1)

Where , H is the High of the previous period and L is the low of the previous period

Continuing with the example above, PP = 1.2439

S1 = (1.2439 * 2) – 1.2474 = 1.2404
R1 = (1.2439 * 2) – 1.2376 = 1.2502
R2 = 1.2439 + (1.2636 – 1.2537) = 1.2537
S2 = 1.2439 – (1.2636 – 1.2537) = 1.2537

These levels are supposed to mark support and resistance levels for the current session.

On the example above, the PP was calculated using information of the previous session (previous day.) This way we could see possible intraday resistance and support levels. But it can also be calculated using the previous weekly or monthly data to determine such levels. By doing so we are able to see the sentiment over longer periods of time. Also we can see possible levels that might offer support and resistance throughout the week or month. Calculating the Pivot point in a weekly or monthly basis is mostly used by long term traders, but it can also be used by short time traders, it gives us a good idea about the longer term trend.

S1, S2, R1 AND R2…? An Objective Alternative

As already stated, the pivot point zone is a well-known technique and it works simply because many traders and investors use and trust it. But what about the other support and resistance zones (S1, S2, R1 and R2,) to forecast a support or resistance level with some mathematical formula is somehow subjective. It is hard to rely on them blindly just because the formula popped out that level. For this reason, we have created an alternative way to map our time frame, simpler but more objective and effective.

We calculate the pivot point as showed before. But our support and resistance levels are drawn in a different way. We take the previous session high and low, and draw those levels on today’s chart. The same is done with the session before the previous session. So, we will have our PP and four more important levels drawn in our chart.

LOPS1, low of the previous session.
HOPS1, high of the previous session.
LOPS2, low of the session before the previous session.
HOPS2, high of the session before the previous session.
PP, pivot point.

These levels will tell us the strength of the market at any given moment. If the market is trading above the PP, then the market is considered in a possible uptrend. If the market is trading above HOPS1 or HOPS2, then the market is in an uptrend, and we only take long positions. If the market is trading below the PP then the market is considered in a possible downtrend. If the market is trading below LOPS1 or LOPS2, then the market is in a downtrend, and we should only consider short trades.

The psychology behind this approach is simple. We know that for some reason the market stopped there from going higher/lower the previous session, or the session before that. We don’t know the reason, and we don’t need to know it. We only know the fact: the market reversed at that level. We also know that traders and investors have memories, they do remember that the price stopped there before, and the odds are that the market reverses from there again (maybe because the same reason, and maybe not) or at least find some support or resistance at these levels.

What is important about his approach is that support and resistance levels are measured objectively; they aren’t just a level derived from a mathematical formula, the price reversed there before so these levels have a higher probability of being effective.

Our mapping method works on both market conditions, when trending and on sideways conditions. In a trending market, it helps us determine the strength of the trend and trade off important levels. On sideways markets it shows us possible reversal levels.

How we use our mapping method?
We at StraightForex use the mapping method in three different ways: as a trend identification (measure of the strength of the trend), a trading system using important levels with price behavior as a trading signal and to set the risk reward ratio (RR) of any given trade based on where the is the market relative to the previous session.
Author: Raul Lopez