Is It Wise To Trade The Economic Data Releases?

If you trade the forex markets you will know that there are important market-moving economic data releases almost every day.

There will often be US-related data releases between 8.30 and 10.00 (US time) which can have a major effect on the dollar pairs and if you trade other currencies, then you also need to pay attention to specific news from that country. For example, you need to keep an eye out for UK-related news if trading one of the pound pairs.

When trading forex you always need to be aware of what news releases are scheduled for each day, but is it possible to actually make consistent profits trading off the back of the news itself?

Well in my opinion it is not possible to make sustainable profits trading these economic data releases simply because any subsequent movements after the announcements are often highly volatile and highly unpredictable.

They are basically open to interpretation, and any subsequent movements are based on traders' initial reactions to the news, which in itself can be unpredictable.

Sometimes you will find that straight after a news announcement, the market will move strongly in one direction or the other. This can either continue, or completely retrace and head in the opposite direction, making it impossible to trade.

This is because there is often a knee-jerk reaction to the news, and then a subsequent move a few minutes later once traders have fully digested the figures.

You will sometimes find that seemingly good news for the dollar, for example, will see a surprise sell-off and vice versa. It's all about trader's perception of the news and is basically too unpredictable to trade with any confidence so my advice would be to stay away from the economic data releases, because there are plenty of easier ways to profit from the forex markets.

This site (forexfactory) provide forex economic news all of time, i usually look at this site to monitored every forex economic news.


Source :
1. Forex Factory
2. Is It Wise To Trade The Economic Data Releases?

How To Earn Serious Money With Forex

The currency trading (Forex) market is the biggest and the fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover.

Markets are places to trade goods. The same goes with Forex. The Forex goods (or
merchandise) are the currencies of various countries. You buy Euro, paying with
US dollars, or you sell Japanese Yens for Canadian dollars. That's all.

How does one profit in Forex?

Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.

The nice thing about the Forex market, is that regular daily fluctuations, say -
around 1%, are multiplied by 100! (in general Forex companies offer trading
ratios from 1:50 to 1:200). If, for example, the exchange rate of "your" pair of
currencies increased by 0.6% in the last 4 hours, your profit will be 60% on
your investment! Such can happen in one business day, or in a few hours, even
minutes.

You can implement your choice (the pair of currencies, the volume amount) under
any direction to which the market is moving, and yet make profit. It does not
matter whether the exchange rate is going up or down: you can always decide to
buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don't
have to physically possess certain currencies in order to perform "buy" or
"sell" with them.

How do I trade Forex?

You select the pair of currencies with which you wish to make a Forex deal. You determine the volume (the amount of the deal). You deposit the "margin" (collateral needed to facilitate the deal. Usually - only a very small portion of the whole deal, say: 1% or 1:100).

Before you finally activate the deal, you can still "freeze" it for a few
seconds. That enables you to either change the terms, or accept it as is, or
altogether regret the whole idea. The "freeze" feature is a unique service.

When your Forex deal is running (you hold an "open position"), you can monitor
its status and check scenarios online, whenever you wish. You may change some
terms in the deal, or close it (and cash the profit, if any, or minimize the
loss, if any). Moreover, some companies let you determine a "take-profit" rate,
with which the deal will close automatically for you, when and if such rate
occurs in the market. Meaning: you do not have to stay near your computer when
you hold open positions.


Source : By Various Sources

How to Avoid Fail as A Forex Trader?

"Define first the level of risk you dare assume. Start with a small position, and then build it up if it works" – George Soros

"Give me a stock clerk with a goal and I’ll give you a man who will make history. Give me a man with no goals and I’ll give you a stock clerk" – J.C. Penny

"If you go to work on your goals, your goals will go to work on you. If you go to work on your plan, your plan will go to work on you. Whatever good things we build end up building us." – Jim Rohn


It is a sad fact that 90% of forex traders fail, and many very quickly give up. Why? When we went through a phase of losing trades we treated it as a temporary setback and went back to the drawing board. We analysed the reasons of our failure and we sought the guidance of Top forex traders, Mentors and Coaches to put us back on the path of success and profitability.

In our opinion the high rate of failure for a new forex trader can be related to the six major obstacles that a forex trader faces, which are summarised as follows :

1. Poor Skills
2. Lack of adequate capital
3. Setting unrealistic targets and goals
4. Lack of Patience
5. Lack of discipline
6. High risk aversion.
   

If we look at the list, it becomes apparent that the failure is as a result of forex trading without having in place a proper forex trading System and a forex trading Plan– One that includes mind training, quality Forex education and strategies and sound money management rules.

So what are the Characteristics of a Successful forex trader? All we have to do is to reframe the liabilities listed above.

1. Adequate forex trading knowledge and understanding. You should seek services of good quality mentors and a forex trading coach.
2. Adequate capitalisation – Don’t be fooled that you can earn thousands every week from a starting capital of $500.
3. Realistic Goals – don’t expect 100% profit each month, it simply is not possible.
4. Have patience – don’t trade if you don’t have to. You should wait for a set-up according to your forex trading plan and system.
5. Have Discipline to follow your rules.
6. Understanding and Managing Risk.
7. And lastly the most important is having a forex trading System and a forex trading Plan.
   

If you look at the advice from the world’s most successful people or forex traders today, you will notice that they follow the guidelines as identified above.

High Probability Forex Trading

High probability forex trading is all about taking positions where the odds of you making a profit are massively in your favour. So whether you are a short-term or long-term trader you always want to be looking for positions where you are more likely to win than lose.

This sounds obvious but most traders don't take probabilities into account when trading, which is a shame because it's quite easy to do, and could result in them being far more selective about their trading, and therefore more profitable.

All you need to do is to rate each potential trade out of 10 regarding the probability of the trade being a winning one, before you enter a position. So for example if you are thinking about entering a short position, and the technical indicators heavily back you up, for example MACD and TRIX have crossed down, RSI and Stochastics are in overbought territory, and EMA's have turned downwards, then you may rate your chances of winning as good and may give this set-up an 8, 9 or even 10 out of 10.

Therefore this trade would clearly be worth entering because the odds of you winning are high. If however, the technical indicators are conflicting with each other, for example, then you may only rate this trade as a 5 or 6 out of 10, which means it probably wouldn't be worth trading.

So next time you trade the forex markets, you may like to try giving each of your potential trades a rating out of 10, based on the probability of it being a winning one, and only trade those coming in at 8 or higher. This way your win ratio will probably be a lot higher and your profits should hopefully increase because you are not trading those borderline trades that you shouldn't have traded in the first place.


Source :
High Probability Forex Trading

Short-Term Forex Trading

Forex traders trade over a number of different time frames, but today I'm going to discuss short-term trading and look at whether or not you can really make consistent profits trading over such a short time frame.

It's a very difficult way to make consistent profits. This is because when you screen down to the 1 and 5-minute charts, for example, you're basically just looking at noise. Sure there will be times when the price lends itself beautifully to technical analysis, but there will also be times when it's just drifting, seemingly at random.

Also, if you're constantly scalping all day you are likely to get a lot of small wins, but also a lot of times when your stop loss is hit, often immediately if trading short term charts.

Over time this can be quite stressful and not a particularly enjoyable method of trading. Yes there are traders who trade this way and make very good profits, but I myself prefer to look at 30-minutes, 1-hour, 4-hour and daily charts to find high probability trades which can play out over a few days.

After all you can often make just as many pips from one or two good longer term trades a week, than lots of smaller positions, and it's unquestionably a lot less stressful. You don't even need to be at your computer all day either because you can just set your stop loss and limit orders and just walk away.

So overall my own opinion from my trading is that short-term trading is a difficult and stressful way of trading, but that's not to say that's it can't be profitable, it most definitely can, but it's just not for me.

Successful Forex Trading Is All About Probabilities

When you first start to trade forex, it's very easy to test out a technical indicator or two and then apply it to your first few trades, or even just trade based on your gut feelings, but if you are serious about becoming a long-term successful trader then you need a well-thought out strategy.

A good forex trading strategy is one where the probabilities are in your favour for every single trade you make.

For example, I don't believe in entering a position where one single technical indicator provides a good signal, but instead rely on several indicators to all indicate either a buy signal or a sell signal in order to enter a trade with confidence.

I also use different time frames as well to show the overall trend. For example, if I'm analyzing a 5-minute chart and all my indicators indicate a buy signal, then I will check the 30-minute chart as well to make sure that we're not in an overbought position or that we are in a strong downwards trend.

So always try and create a trading system that will provide you with high probability trading positions as this is the key to making long-term profits from forex trading.

Slow Stochastics Key to Dollars Forex Indicator

Correlate Multiple Indicators for Maximum Profit

Slow Stochastics for the technical trader can be most effectively used in conjunction with another oscillator such as the RSI (Relative Strength Index). These two indicator by themselves do not become the "holy grail" for the budding forex trader. However, they can be used to observe momentum shifts within charting patterns.

Trading Tip:
Multiple indicators correlating within multiple time frames leads to the perfect moment to enter the trade. Time frame overlays with correlating indicators are the sign posts for entry into your forex trade.

The original stochastic indicator, developed by Dr. George Lane, is plotted as two lines, %K line, a fast line, and %D line, a slow line.

The %K is far more sensitive than the %D line. The % D line is the moving average of the %K line. And the %D line triggers the trading signals. "Trigger lines" are drawn are typically drawn at the 80% and 20% levels. A signal may be generated when these lines cross.

The 80% value is often used as an overbought warning signal and the 20% value as an oversold signal.

Signals are generated in three main ways:
1.When the 80% or 20% lines are crossed.
2.Crossovers between the %D and the %K lines.
3.Divergence between the stochastic and the underlying price.

A Simple Way To Increase Your Forex Trading Profits

Many people spend years looking for a trading system that will make them consistent profits but the fact is that most people ultimately fail to do so. However the truth is that even the most basic of trading systems can be made into a money-making machine if you follow this one simple strategy.

Successful forex trading is all about probabilities, and finding high probability set-ups is the key to making winning trades on a consistent basis. Indeed this is why technical analysis is so popular because it's basically a tool that enables you to find instances where several key indicators correspond to give a clear buy or sell signal.

So how do you increase your overall profits?

Well assuming you are currently using some kind of trading system, take a few minutes to look through some of the positions you've taken in recent weeks. You should find some trades that you took that turned out to be winners and you remember being extremely confident about when you opened the trade. You should also find some losing trades which you didn't really have any confidence in before placing the trade.

Now to increase your profits you should only be trading these high probability set-ups that you are extremely confident in, based on past performance and experience. Therefore before each trade what you want to do is to give each potential trade a ranking out of 10 based on how confident you are that a position will turn out to be a winning one.

It's unlikely that you will ever give a trade a 10 rating because no-one can be 100% sure about a trade, but you should get plenty of 8s and 9s. Now you should concentrate on only trading these high ranking positions, ie 8 and above, and ignore the rest.

This simple strategy can potentially have a dramatic effect on your overall profitability and can even turn an unprofitable trading system into a profitable one so it's well worth doing if you want to increase your success rate.

Related Post :
Is there Any Forex Trading System Holy Grail?

Source :
Here's A Simple Way To Increase Your Forex Trading Profits

Is there Any Forex Trading System Holy Grail?

Many people spend a large part of their lives searching for the perfect forex trading system because after all if you can consistently make winning calls then your bank could potentially grow exponentially using leverage. However does this holy grail actually exist?

If you visit any forex forum you will often find many questions from newbies asking about the perfect forex trading system and how to consistently make money from forex trading. The response from others is nearly always the same - there is no such thing as the perfect trading system. It's a sad fact but unfortunately it's completely true.

Similarly on the same forums you will often find traders starting a new thread just to boast about their new trading system which they claim to be their most profitable yet. Unfortunately with almost all of these systems, they may be profitable initially, but over a period of time they nearly always lose money overall.

The fact is that there is no holy grail trading system that will consistently make winning calls, however you can of course make consistent profits from forex trading without having the perfect system. The key is to devise a system where the probability of making a profit is always in your favor for every trade you make.

So for example you could devise a system using a number of technical indicators and only trade long or short when they are all in agreement with each other, so statistically you are more likely to make a profit than a loss. Similarly you could use 3 time frames, and look for a trend in the same direction on the 2 longer time frames, and look to enter a high probability position on the shorter time frame. For instance if the 1 hour chart and 4 hour chart are trending upwards, you could look to go long on any oversold positions on the 15 minute chart.

These are all examples of how you can trade positions where the probabilities are on your side, which is the cornerstone of so many successful trading systems. You don't necessarily need to make winning calls 70-100% of the time either. Even a trading system that boasts a 30 or 40% success rate can be profitable over time if a good stop loss policy is used and winning positions are allowed to run.

So stop wasting your time buying the latest and greatest trading system and going to forex forums in the hope that you'll find the perfect trading system, because it doesn't exist. Instead focus on developing your own forex system based on probability trading that will generate steady profits for years to come.


Source :
The Perfect Forex Trading System - Does It Exist?