Forex Currency Trading – How to Harness Today’s Trading Technology

January 31, 2010 · Posted in Currencies · Comments Off 

Self control and discipline can be nurtured and strengthened over time and are extremely valuable qualities to develop. In this article we’ll talk about how these qualities relate to current and projected future developments in the Forex industry.

Manual Forex trading is a time-tested and market proven method for trading Forex. There is no doubt that manual Forex trading is here to stay. Many of the most skilled full-time Forex traders prefer this method. The key words here are skilled full-time traders.

You see, manual Forex trading can be time consuming. While the process of Forex technical analysis gets a bit easier and more efficient with practice in manual Forex trading it can never be completely eliminated. Manual Forex traders will always need to complete their technical and perhaps even fundamental analysis prior to executing their Forex trades.

As you know, fundamental Forex analysis has to do with looking at economic indicators within and between nations. Fundamental Forex indicators such as Consumer Price Index, Non-Farm Payroll, Gross National Product, Industrial Production, Producer Price Index, Retail Sales, Balance of Payments and Interest Rates are many of the most common fundamental Forex indicators traders seek to incorporate in their analysis.

Needless to say using both fundamental and technical analysis is quite complex and can be a very time consuming challenge. Except for “news” traders many Forex traders default to primarily using Forex technical analysis.

A prime example of “news” is the Non Farm Payroll announcement. This announcement normally takes place on the first Friday of each month at 8:30am Eastern Time. Forex traders who trade the news position themselves in the market to capture as many PIP’s as possible during the market corrections that take place just after a “news” release. Forex traders who trade the news rely quite a bit on fundamental indicators in making their trade decisions.

New Forex software programs that gather and interpret Forex fundamental indicators have been around for a while and they will continue to improve their accuracy with time.

Speaking of Forex software programs, one of the most rapidly developing forms of Forex software are “Expert Advisors”. Forex Expert Advisors (EA’s for short) are software programs that operate within your Forex trading platform. So far, the industry leading Forex trading platform for EA’s is the Metatrader 4 Trading Platform designed by ODL Securities.

There are several advantages to using an EA. Perhaps chief among these advantages is the fact that the “on-board” programming of the EA eliminates the need for the Forex trader to spend a lot of time doing technical analysis. Once an EA is properly initiated, it will automatically trade a specified Forex pair, or pairs, using a predetermined strategy or Forex trading approach.

This can be a huge time-saver.

With an EA the Forex technical analysis is handled by the Forex trading logic programmed into the EA. The EA functions off of a set of predetermined “rules” which guide its operation. The EA enters the Forex trade when the entry conditions are met and exits the Forex trade when the exit conditions are met. Each EA has a different set of predetermined rules. Each rule is typically controlled by one or more user adjustable “switches”. These switches are optimized at the time the EA is delivered to the user and can be saved as a switch settings profile. Once the default switch settings are saved, the user can make changes to the switch settings if they wish. It is important to remember that the best way to determine EA switch settings is through the back testing process.

Back testing is a process by which each switch or set of switches are methodically tested using actual past market data from your Forex trading platform. While back testing takes much less time than forward testing it is still a painstaking and time consuming process but the results can be very revealing and informative. This process will tell you such things as, for example, which time frame(s) and currency pair(s) are the most profitable to trade.

Back testing is absolutely necessary in order to optimize the settings for an EA and as such it is very valuable process but the process is not perfect. Data mismatches can occur during the back test process which can degrade the results somewhat. The source of these data mismatches is not known at this time but it is an industry wide problem and the solution to the mismatch problem is being vigorously pursued.

Even with its flaws the back test process remains of utmost importance when it comes to optimizing the performance of any EA.

The time saving nature of using an EA coupled with the stress reducing effect that it has on the Forex trader has boosted the popularity of this kind of Forex trade automation.

It is just this kind of Forex trade automation that is helping to fuel the explosive growth of the retail Forex market. It is no longer necessary to stay glued to your computer monitor and “baby sit” your Forex trades. Not only that but a properly designed EA can perform functions that even the most skilled and experienced Forex traders find difficult. For example, there are EA’s on the market today that can trade multiple currency pairs simultaneously. Other EA’s can trade multiple Forex hedge trades at the same time!

We are in the midst of a quiet revolution toward increased Forex trade automation. It is safe to say that the trend toward Forex trade atomization is likely to continue and strengthen over the next several years. Because the advantages of using an EA outweigh the disadvantages, the popularity of using EA’s is at an all time high and likely to set new records in the near future.

Even though EA’s are reducing the need for Forex technical analysis they are not reducing the importance of self-control and discipline. It is common for Forex traders who are new to EA trading to have an urge to “manual” trade using the EA. This is a mistake, first of all it defeats the purpose of the EA and second it can result in preventable loses.

With EA trading the EA is your Forex trading method. The EA trader is well advised to allow the EA to do its work without trying to manually over-ride it (Plan your trade – trade your plan).

If possible, examine the back testing and forward testing results of an EA before you purchase it. Always demo trade with a new EA to confirm its operation before using it in a live account.

EA trading is gaining in popularity by leaps and bounds. EA trading is part of a major trend toward increased automation in the world of Forex. This trend is expected to expand and strengthen in the years ahead.

Being skilled in Forex technical analysis is always an asset but EA trading relies more on the Forex trading logic of the EA than it does the technical skill of the trader.

Self control and discipline are equally important whether you are Forex manual trading or EA
trading. Combine the personal qualities self control and discipline with using a well designed EA and you are on your way to profiting in Forex – the world’s largest market.

Disclaimer – This article is for educational purposes only. It is not offered as investment or legal advice. The reader assumes all responsibility for any and all profits or losses incurred by his or her trading activities.

Author: David R Jaymes
Article Source: EzineArticles.com
Provided by: Programmable Multi-cooker

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Online Commodities and Forex Currency Day Trading for a Living

November 23, 2009 · Posted in Currency Trading · Comments Off 

There are many folks out there today that would love to become full time traders and day trade online for a living if possible. After all anyone with a brokerage account and a connection to the Internet can day trade stocks, options, futures, commodities or forex currencies online from the comfort of their home. For what it is worth, it is way easier said than done.

In order to become a successful day trader and make a living from day trading, a person must be prepared to put in the hard work, time and effort required to succeed as a day trader. A trader has to master all the skills reqired to be successful. The biggest skill to be mastered is in the form of emotions and it is probably the hardest of all to come and master. That is why it is always better to learn day trading from a mentor who has been trading for a while. A mentor is always the preferred route compared to just reading some books on trading or buying a black box system. The training received from a mentor can be expensive but invaluable at the same time. One must always look at the background of the trading mentor before choosing one.

It is always a smart idea to start trading with money a trader can afford to lose. Paper trading works well too, but lacks in the strong emotion building process required to be successful as a trader. A trader must always use risk capital to succeed at day trading for a living. Using money kept aside for immediate day to day expenses or money borrowed from a credit card is a recipe for disaster. Scared money never wins the trading game.

A day trader must keep a track of all the trades placed in a journal. This journal must be updated on a daily basis. This will help the day trader immensely as he will learn from his mistakes and always keep working on getting better. A day trader has to keep his expenses low to make money in the long run. To do so, he must wisely choose his trading software, broker and his Internet Service Provider. A day trader must also learn to read the market well and know when to take trades and when to stay out. Following other traders or gut instinct can have negative consequences on the day trader as well as his account. It is always better to trade well as per the rules set out and come back to fight another day than to lose it all in one day.

It is possible to make a living at day trading if all the rules are laid out in a trading plan by the trader and followed religiously by the trader.

Please visit the Invicta Trader Inc. website to learn more about the Watts Online Trading System from Ryan Watts of the Watts Trading Group and see how it can be used to profitably scalp, day or swing trade stocks, futures, forex or any other liquid market and any time frame. It is the only online trading system out there that we believe offers a lot to traders who want to succeed at online futures trading, currency trading or even forex trading for such a low price.

Article Source:http://www.articlesbase.com/day-trading-articles/online-commodities-and-forex-currency-day-trading-for-a-living-1494961.html

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Best Forex System Trading To Lower Your Trading Risks

November 2, 2009 · Posted in Currency Trading · Comments Off 

It is simple to understand why many are now turning towards trading in the money market.  The forex trading market being the largest in the world with trading volumes close to trillions, make it the most sought after trade. With the best forex system trading online software, individuals are now taking advantage of this trillion dollar industry and making millions for themselves.

After this industry has been automated, it has a new found popularity that is quite obvious with its growing appeal and status among small and big time traders. Trading with an automated system makes it easier to enter a trading market.

Most manual systems are unpredictable and are slow. They do not keep in touch with the ever changing and fast moving trading market. With an automated trading system, you can now trade from any part of the world and any time of the day. This is because the systems are connected to the trading markets 24 hours a day. This gives individuals the possibility of earning higher profits since they are now abreast of current market trends and conditions.

You can trade with individuals from anywhere in the world at any time without any issues. This is because since the market is always open, you can trade in different currency markets without being hassled by the time zone that traders work in.

Most trader do not enjoy trading with a manual system. This is because there is an element of doubt when it comes to payment time. Most traders are anxious if they will receive their payments or not after they conclude a trade. If you choose the best forex system trading software, you are assured that your payments are made on the spot. This is because trading itself is done on a real time basis. The automated system thus reduces risks that most manual trading systems cannot.

Choosing the right Best Forex System Trading software will help you reduce your losses to a larger extent unlike the manual trading system. For more information, visit http://www.bestonlineforexsystemtrading.com.

Article Source:http://www.articlesbase.com/currency-trading-articles/best-forex-system-trading-to-lower-your-trading-risks-1408549.html

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