Forex Manual Blog

Venu Modalavalasa asked:


Today in the forex market, there are many automated forex trading system software’s available. All those automated trading pilots announce that anyone can use them to make thousands of dollars everyday. But how far all these are true?

I believe that an automated forex trading system can make some profits but not thousands of dollars everyday. You can make consistent profits by forex trading systems if and only if you know, “how to use it” and “when to use it”.

Everyone thinks that by using automated forex trading system software all the time round the clock can make huge profits and can become a millionaire in a night. But it is not the fact. If you do not know how to use it and when to use it then you will be finally left out with empty hands. Forex is a very dangerous market. You should be very careful while taking any decision. So any decision to use automated forex trading system should be taken with care!

I think you might know about the terms technical analysis on forex market and fundamental analysis on forex market! Any automated forex trading system software can do the technical analysis because technical analysis is nothing but finding the trends, when will that trend repeats. Since automated forex trading system software is built up with software consisting of mathematical algorithms it can do the technical analysis using the mathematical algorithms with which it is built up. But it can not do the fundamental analysis for you.

Fundamental analysis is nothing but analyzing the economic strength of a country with which the currency you trade. The economic strength of any country can be down either directly or indirectly. May be directly because of internal issues of that country or may be because of external issues with relation to other countries, indirectly. The issues relating to fundamental analysis can never be anticipated by any automated forex trading system software. So, fundamental analysis is totally different to technical analysis. Fundamental analysis is something like the other side of a coin. So fundamental analysis is always important whether you trade the forex manually or you trade the forex with any automated forex trading system software.

I think now you would have come to understand when to use automated forex trading system software! Before you use any automated forex trading system software, you always need to have fundamental analysis. If your fundamental analysis is positive, then you can keep your automated forex trading system software all the time and round the clock to work for you to make profits. If your fundamental analysis is negative you should never use automated forex trading system software.

Now let’s come to “How to use an automated forex trading system software”? I do not mean how to make an automated forex trading system software “On” and “Off”! Its the strategy how you deal with automated forex trading system software! You need to have a specific strategy how to make your automated forex trading software work for you to make profits. A specific strategy is always needed when you trade with forex trading systems.

I summarize that, no forex trading system software can make you millionaire in a day by making thousands of dollars per day. Using automated forex trading systems make you earn consistent profits but you need to know how to use it with your strategy and when to use it with your fundamental analysis!

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STAELENS

Sam Beatson asked:


Creating a forex trading system that works is a task some people assign to a divine entity who magically manifests itself as a marketer selling the latest “holy grail” forex trading system. When it comes to an automatic 20 pip forex trading system, the search is likely to be long and arduous, because of the old adage “if he’s doing it, why isn’t everyone doing it”.

In fact, I don’t believe there can be an automatic 20 pip forex trading system because there is always the element of the forex market which is totally unpredictable.

It’s not irregular for a forex analysts whose automatic 20 pip forex trading system is based entirely on his fundamental and technical analysis has to come back the following day and explain an unexpected reversal due to fundamental (socio-economic) news being announced lower or higher than expected resulting.

Another example of why this may happen in these times is a decision made about the war in Iraq for example that has resulted in emotional buying or selling of the USD for instance and therefore rendering the automatic 20 pip forex system another forex loser for the day at least.

So, if fundamental analysis can not be predicted, and as one author puts it “no one knows whats going to happen” in the forex market, how can an automatic 20 pip forex trading system be created?

The answer lies in the understanding of the word “automatic” If you truly want an automated automatic 20 pip forex trading system, you are going to be hard pushed. This is because there are going to have to be rules, such as not trading in the vicinity of newstime where the market reaction can be unpredicatable based on technical indicators due to the reaction of the market to the news as opposed more than predetermined technical levels which tend to get overidden particularly during major announcement such as the non-farm payroll data once per month.

However, you could call a manual trading strategy which makes a fairly consistent 20 points an automatic 20 pip trading system, but there has to be a footnote really, and that footnote must include various rules about the automatic 20 pip trading strategy as to when and how the system can and should be used exactly. The system itself is automatic in the way it roduces buy and sell signals, but, due to the nature of the forex market, it must be traded manually in reality using intuition and skill to not trade during false signals.

If you decided you were going to create the makings of an automatic 20 pip trading strategy, you cannot call it that immediately, because at first it sometimes will be good only for 10-15 pips rather than the full 20. At other times, it may give you automatic signals which tell you to get into a trade which goes for 50, 70 or even 100 pips at a time, which for an intraday forex trading system would be borderline outstanding considering the market may move in a range of only 120-150 pips on a reasonable trading day,

For an automatic 20 pips forex trading system then, one must know the online currency market fairly well. One must have education and mentoring and at least training in some indicators and strategies to understand the reading of the market technically, as well as a sound understanding of the fundamental analysis aspects of the forex market.

For myself, the automatic 20 pip forex trading system I utilise contains a good deal of classic trading rules, fibonacci retracement zones are mapped in, moving averages abound and there is use also of momentum and strength of the market indicators with as much lag reduction as I have found possible with fairly foolproof fail-saftey measures to reduce false signals to an absolute minimum.

Contrast that with a trader I spoke to today and I was flabbergasted to hear together we brainstorm from being technicals-crazy to having an automatic 20 point trading system that gives at least 2 signals per day across three currency pairs (a total 40 points daily target for the system) using only 3 lines on-chart and absolutely nothing offchart - not even a care about news (fundamentals) particularly because it ‘does his head in’. So, just as the fat lady sings when its all over, so expect that anything may be possible.

A system is automatic in that it one to be confident to enter trades. A forex strategy is manual in that it is the forex trader who pulls the trigger on a trade. Its automatic though in terms of generating the entry signal based on the lining up of a few indicators on the chart and off the chart. Rules include the times of trading being particular market hours and avoidance of important announcements is key.

This article concludes that it is possible to create an automatic 20 pip forex trading system, but it takes a lot of trial and error to create an automatic 20 pip forex trading system that does not generate a whole bunch of false entry signals and actually captures trades that go the 20 pip distance.



WHITTLESEY

Matthew Bass asked:


Imagine the next time you join a discussion about automated forex trading. When you start sharing the fascinating automated forex trading facts below, your friends will be absolutely amazed.

The concept of automated forex trading is fast catching on. The first market to move to automated trading was exchange-traded futures. Following this, traders working in the Interbank spot FX market too moved on to this system.

The success of the system flows from its ability conduct trade in real time. This is difficult to achieve manually, especially if the trading is to be done in milliseconds. Also, there may be times when a trader may be away from the desk, or a trader who has incurred a series of losses may take time before placing a fresh order. These are dampers that automated foreign trading removes.

Another advantage that automated trading brings in is diversification. It is possible for a trader to trade in different markets, and in different time zones. The trader can also deploy multiple trading models.

The trader can also use the automated model to analyze short-term data, which is not possible otherwise. This gives the trader an advantage over others who are not using the automated trading system. The trader can use this short-term data to analyze how the market will move in the next 15 minutes or half an hour, and accordingly take decisions. Also, high frequency trading allows existing data to be used in different ways in different markets.

The information about automated forex trading presented here will do one of two things: either it will reinforce what you know about automated forex trading or it will teach you something new. Both are good outcomes.

Automated trading also improves liquidity. This is quite apparent from the way the number of trades shot up in futures exchanges following the adoption of automated trading.

However, one area that worries traders is the likely increase in the number of orders once all traders adopt this system. The fear is that there may not be sufficient bandwidth or engine capacity to execute all these orders in real time. Already, some quarters are employing controls to guard against unnecessary order messages.

Risk management is another area that worries forex traders. An automated trading environment’s risk management logic requires that before a new position is opened a check be made to ensure that there is no excessive correlation with already opened positions. For this check to be accurate, all systems need to be synchronised. But these are technical issues that the market feels will be resolved as the technology improves.

For the time being automated trading in forex is the buzzword.

Knowing enough about automated forex trading to make solid, informed choices cuts down on the fear factor. If you apply what you’ve just learned about automated forex trading, you should have nothing to worry about.



RIEDL

Michael Hehn asked:


Forex trading involves substantial risk of loss and is not suitable for all investors but forex trading has large potential rewards, but also large potential risk. Automated forex trading is defined as the ability to trade forex with the help of a trading program or solution.

The popularity and interest in forex trading has resulted in a number of automated systems to be developed. Small and mid level investors are now getting into the foray of what was once only dominated by banks and other large financial institutions. When you trade the currency of one country for another currency, this is the place where it happens. Transactions run into trillions of dollars every day round the clock making it one of the largest and most dynamic financial markets of the world.

Anyone with a forex brokerage account and some experience in trading can now operate forex trading thanks to the internet, advanced networking and communication technologies. You must constantly watch this ever-alive market if you want to remain on top. The automated software system lets you choose a currency as well as its asking and selling price before you trade. With the help of a broker and your seed amount, your purchase and sell orders would be carried out immediately.

You do not have to be an expert to enjoy the profits of the market because your task is made easy by the automated forex trading systems. The trading program built in the automated systems, can easily execute all your trades for you. Therefore automated systems help you save time as you do not handle the trading yourself. Unlike manual trading the auto trading platforms can help you manage more than one account at the simultaneously. When you want to trade in multiple markets with multiple systems, these programs allow you to do this.

With these forex trading systems that operate automatically, you can trade any time of the day or night and you do not have to be present. Not even a single profitable trade is missed, even if you are not there at your computer. It is then easy to operate on different systems and deploy several forex strategies. Each system is designed to be activated by some specific trade factors so you can spread your investment and get maximum returns with minimum risk accordingly.

These automated forex trading systems completely ignore all emotional factors which often put informed decisions in jeopardy. It is possible now to manage and monitor several currency pairs and trade them when it suits you.

Using an auto forex trading system does not spare you from learning the basics of trading, fundamental and technical analysis, study of market indicators, etc. Several factors and variables influence the forex market so just using an automated system can not guarantee you long term success in this venture. The automated forex trading system is not purely mechanical; you can program it to suit your individual needs.



PARRELLA

Ducati 996R asked:


I’ve been trading stocks for a year or so and want to expand into different types of trading like opening a ForEx account. How long did it take you to get a hang of it and any good books or authors on the subject?

BORGMAN

anonymous asked:


In order to succeed in forex, you will need to take the time to learn forex trading. Once you have studied and understood the techniques and strategies involved, you will have a much higher chance being successful trading on the foreign exchange.

As with any new venture, it’s not fun reading through pages and pages of manuals to learn a strange jargon and new skills, but if you are going to be risking your money in the Forex, it is important to learn forex trading thoroughly to ensure that you do not lose that money.

It goes without saying that you will probably not “get rich quick”, or be guaranteed to never lose money if you take the time to learn about forex trading with eBooks, courses, and/or seminars, but they can certainly improve your chances of being successful.

One of the ways to learn about forex trading is through seminars. The seminars available can be useful in your Forex education because they are interactive and usually go into the finer nuances of trading. The nice thing about seminars is that they are interactive, so you can discuss points with the lecturer and discover new things about Forex, even if you are at your third or forth lecture.

You can also learn about forex trading by purchasing a study package or guide from various broker companies and Forex itself. These usually go into immense detail about every aspect of Forex trading and can be used by the professional trader and by beginners.

There are also various eBooks available on the internet that can help you learn forex trading.

The first thing you will probably want to master when you learn forex trading, is how to read financial currency charts so that after going through the data and trends, you can make a prediction about the next rise or fall of a currency trend. By doing this effectively you will be able to improve your chances of placing your money in the correct market and making a profit.

It seems simple in theory, but there are many factors that can make a simple idea much more difficult in the real world. If you take the time to learn forex trading, either through an eBook, course, or seminar, you will have an opportunity to discover all the tricks and tips that can help you improve your odds of succeeding when trading online. There are even software packages that can help you to predict the next trend and keep track of patterns in the foreign exchange rate.

When you learn forex trading, the learning never really ends, as there are always new and improved methods, newly discovered strategies, different currencies, etc. If you take the time to learn more about forex trading BEFORE you trade, hopefully you can make much more money than you lose.



FOLGER

spoonciveg asked:


Can anyway suggest to me a book that has a little bit of everything within the world of Wall Street and finance. A little bit about stocks, bonds, forex, history, techniques, careers, etc.

PELLEGREN

masterforexuk asked:

For Private and Online Forex Training Visit

http://www.masterforex.co.uk

DEGREGORIO

Samuel Leslie Berkovits asked:


There are traders who trust their money to an automated trading system and others like to pull the trigger, here are the advantages and disadvantages of each…

Let’s look at both methods in more detail.

Automated Trading

1. Time efficient

Once you a system, all you need to do is follow the signals and this should take you around 30 minutes a day.

2. Objective

All you do is follow the trading signals, so it gives you a consistent, objective way of trading the markets and executing trading signals.

Disadvantages

1. Losing Periods and Discipline

The major problem comes when you have to apply the system with discipline through losing periods.

Don’t believe what some vendors tell you about trading with little or no losses. A losing period can last for weeks or even months and you have to stay disciplined and keep executing the system. This means you must have confidence in your system and know how it works, to keep going until you hit a home run.

2.    Beware of the Myth

There is a view that you can make money with automated forex trading with little or no risk and not even understand what your doing - this is rubbish.

There are many vendors selling forex robots who will tell you this and the ones that do, normally only have a simulated, made up track record and that’s just a test not real money.

If you trade a forex trading system be realistic.

Annually, with a proven system you can compound about 30 - 100% on the best systems; your drawdown will be typically 30 - 50% and last from a few weeks to a few months. These are the best systems and what you can expect.

Manual Trading

Most people who claim that automated trading is superior to manual trading forget one key point - any computer is only as good as its rules and there made up by humans also, a human can do something a computer cannot - it can think for itself. This is a huge advantage in trading and most of the major funds, banks etc don’t rely on total automation, they rely on humans and their judgement.

The application of mathematical theories cannot beat the market as many claim - why?

Because markets don’t move to a mathematical formula!

Think about it, 50 years ago 95% of traders lost and the same ratio applies today and that proves the point. In the period vast strides have been made in PC processing power and software but it hasn’t helped the losers.

If you are playing an odds market which forex is, the human brain is more powerful than any computer in terms of it has the advantage of independent thought. The myth that computers are superior to humans as traders is absolute rubbish - there as good as the human who programmed them!

So which is best?

I think there are some good forex trading systems and they can make money but I like to run both manual trades and automated programs. In manual trading I still have rules but can adjust money management and other parameters and feel in control.

The World’s Most Powerful Computer

People who say that markets can be predicted are talking rubbish and with a technical system all you can do is react AFTER The event. A human can see the whole picture - fundamentals, sentiment, technical levels and make a judgement BEFORE the event. Don’t under estimate your human brain!

Combine the Two

The choice of manual or automated trading is a personal one but my choice is a combination of the two and all my trading has manual override and in an odds based market, that’s a huge advantage to have.



BONNET

Marc Trimble asked:


It is no secret that many currency traders have more than once thrown up their hands in frustration. This is true for many traders in various levels of expertise. Even when a trader has all the tools, charts and resources in front of him, he may not always be able to figure out what they all mean. Let’s face it. Currency trading or forex is simply no piece of cake. You have to sweat it out if you hope to become an expert at it.

Although beginner forex traders often feel that life is cruelest to them, expert traders are not exempt from the frustrations and difficulties of trading. Remember that they have had to start somewhere too and once, they were also beginners. On the way to becoming the experts that they are now, they have had to endure many losses, some of which may have been significant. This is simply what it took for them to succeed. If you choose to trade as a beginner now, you should accept the reality that you will pass through the same difficult path as the experts have.

The main advantage of experienced traders is that they have had years to study markets and the factors affecting them. It is always important to have a grasp of the technical aspects of foreign exchange gained through actual experience. You need not however break your bones over the most difficult aspects of it. You can make things easier if you choose to open a managed forex account. An account of this type has become more attractive in recent years because it is estimated that market losers do not go over a maximum of 10%.

A managed forex account can offer you a number of great advantages. Even if you have a strong grasp of market and currency factors, a managed forex account may still prove beneficial for you.

Here are some benefits to look forward to:

It isn’t cheap learning the ropes in currency trading. You may have to spend more than a thousand dollars an hour for seminars, manuals and professional coaching. Even with the most expensive kind of training, you may not be able to learn everything. Add to this the disadvantage of lost time. What will your be earning while you are learning full time? Getting a forex account manager on the other hand may be cheaper, less taxing and less time consuming for you. You can easily rely on the knowledge and experience of a professional to take care of your best interests. If you want to trade on your own, you can always practice on a demo account. Many online services provide this kind of tool. Many who have gone through this path however have realized that sample accounts are far different from real or live accounts. With a forex account manager, you are assured of many years of experience using only live accounts. You can be sure that they are not just practicing on yours. Moreover, you also have the advantage of learning from an expert. You can learn your way through the market by keeping track of how your trader moves. You should know that forex trading involves lots of risks and that you can’t always emerge a winner. Even so, it is never acceptable to lose more than you can afford to. A professional forex account manager understands this and will work to help you keep your losses within the acceptable limits. His experience on leveraging, using stop limits and a number of other techniques will help determine the optimum way of trading your pairs. Without an experienced trader on your side, you may easily lose more than you can handle. A crucial benefit of having an account manager is that you can afford to worry less. While you should still keep track of the movement of your accounts, you don’t have to do so every minute of the day. Your account manager can do that for you. With a trusted professional taking care of your accounts 24/7 you can afford to spend more time on other things that matter to you such as your family. You can even afford to pursue a full time hobby that doesn’t pay because you have the assurance that someone capable is helping you earn.

Forex trading need not be a terribly frustrating experience. By relying on the skill and experience of professional traders, forex trading can become a rewarding experience. Although you may not always reap gains, a professional will help boost your chances of making future gains.

Of course, do remember that having a professional trader trade for you does not mean that you shouldn’t know anything about forex trading. Take the time to learn the basics so you can at least understand how your forex account manager works. Chances are they use a “system” of some sort. Ask them about their system and what it’s based on, why it works and most importantly, what percentage of the time it returns a winning trade.



COUSE