Trading the Forex Market isn't as easy as some would make you believe. However, it's not as difficult either. To get a good grasp on whether or not this market could be a profitable avenue for you and your investing, you first need to come up with a trading plan.
To build a trading plan, every trader should begin by determining which market environment they prefer to trade between trending or ranging. After that is decided, you need ot find out what type of environment we're currently in before you can work on objective entry triggers. To find out how you can find a favorable market environment to trade, click here and enjoy!
Trading the Forex Market can be likened to a hunter in the woods. You want to be able to identify the best opportunities that can feed your account consistently without exposing yourself too much risk. In order to find opportunities consistently, it's best to develop a trading system fit to your needs and strengths.
This article is the prologue to a 4-part series on developing your own Forex trading strategy. Throughout this series, you will be introduced to key building blocks that make up key trading plans whether you're a brand-new trader or a managing a trading desk at a major Wall-Street bank.
It's so easy to enter into a bad trade. Of course, we want can never prevent all loses but any way in which we can see a trap and avoid it, the better off our trading careers and account equity will be in the future. From experience and from talking to thousands of traders throughout my career, one of the top drains of account equity is entering into a trade under false pretences.
What does he mean by 'false prences', you may ask? Quite simple, if you believe a breakout is taking shape only to fail, yet you enter thinking that all time highs are around the corner, you're entering the trade on false pretenses. If you can indentify a legitimite breakout vs. a false one where the sharp move traps new traders that may just be a last ditch effort by those in the trade to get out at a good price before the oppositiong takes over you will have a major edge.
If you're unsure how to identify those types of breakouts, this article is a great starting point to prevent you from entering a trade at the one of the worst possible prices on the chart.
If you're like many other traders when you started out (myself included), you were probably going on a scavenger hunt as to the best trading system in the world. The one trading system that will tell you when and where you should buy. However, the longer you're in the game and the more trading desks and strategies you're exposed to bring out one common theme.
Every trading system is built upon defining an edge while keeping as much of your trading capital as possible when the edge that you've build your trading system around doesn't pan out. This article breaks down how you should approach trading from the vantange point that many now successful traders would were they to start all over again. Enjoy and let me know if you have any questions at all.
January 2014 was the best January for USDOLLAR since 2009. As a Forex trader, you should be looking around for Forex crosses where the USDOLLAR is trading against other currencies that are weakening and finally starting to break multi-year trends. This is where you can find exciting opportunities and one such is being described in this article regarding how to trade price channel like seen on USDCHF.
Looking at this chart which is featured in the article referenced above, it's important to see how this trend has the potential to break a multi-year price channel and continue the move higher begun off the all-time low in 2011. The purpose for this multiyear downtrend in USDCHF which are showing relief in January of 2014 has been the Quantitative Easing program which the Federal Reserve confirmed that they were tapering on January 29th, 2014.
Beyond USDCHF, it can be helpful for you to look for similar price channels breaking to find great trading opportunities. When a channel breaks, you can see on the chart a shift of market power from the buyers to the sellers when a rising channel breaks or vice versa when a falling channel breaks like on USDCHF. As always, if you have any questions, please don't hesistate to reach out to me via comments, email or @ForexYell.
Many people don't realize how interrelated the global financial markets really are. Trader, it can help you dearly if you begin to see all markets as related and you can start with the S&P500 as well as the USDJPY.
While you may not understand at first, why markets are related, it's important to know that over the last few months, when USDJPY has risen meaning that JPY is being sold as USD is being bought, the S&P 500 has been rising. Conversely, when the USDJPY is falling like it has since for the month of January, it means that JPY is being bought, USD is being sold and the S&P 500 is falling as well.
Here is an article that will help you steer the risk of trading in 2014 through USDJPY and the S&P500. While the first month of 2014 was definitively risk-off, February will help us see if the stock market will continue continue to sell-off along with Forex market.
The laziest thing that any trader can do is to come up with one idea and put money on the line hoping the market proves them right. The better, yet harder discipline is to think up multiple scenarios that will cause your trade to play out or become nullified. The scenario that would have caused the Euro to fall seemed to be setting up in last few months of 2013. However, as 2014 begins and economic indicators begin to print, it looks as though many of the scenarios that would have needed to come together for EURUSD to drop to the lower 1.3000s like it did in early November are not coming to fruition. To learn why many may be dissapointed is one aspect of the article but the key thing I want you to know is why buying the Euro may be the surprise trade of 2014.
Traders often deny that trading and gambling are similar. "Trading is a sophisticated science", the trading community says. However, in the end were all in it for the money and the way to make money in trading and gambling is to increase your odds.
What many traders likely don't realize is that the way to think about gambling is not from the gambler's perspective. The gambler is often not on the winning side of the gambline business. As Albert Einstein once said, "You cannot beat a roulette table unless you steal money from it."
Here's an article for you to set up an appropriate view of the relationships of trading and the gambling business.
The 10-year treasury yield has lately become seen as a bell-whether of overall USD Demand. Therefore, if the yield on the US 10-year is rising, it can be said that buying the US Dollar against a weaker currency like the CAD, JPY, or CHF could be a potentially profitable play. Twice in the last 6-months, the US 10-year treasury yield has approached 3% only to come back down aggressively. Earlier in the month of January, the US 10-year yield approached 3% only to drop down to a yield of 2.85%, the next clean level target on the downside is 2.75% which could bring with it a further drop in the DXY or US DOLLAR index.
If you do continue to see a drop of the 10-year yield, some trades to keep an eye on would be EURUSD, NZDUSD or GBPUSD higher or a potential regathering of USDCHF downside. Happy Trading and if you have any questions on using the US 10-year Treasury yield as your guide, please don't hesitate to reach out to me.
The canadian dollar is often referred to the loonie for the namesake bird on the back of the nations currency. However, the lack of action over the last few years since late 2009 has taken it out of contention for many traders who prefer to trade trending currencies. In late 2013, the Federal Reserve decided that they would reel back on their Quantitative Easing (QE) program as the improving economy in the United States makes the level of support they had been providing unnecessary.
But as the economic picture in the United States started showing signs of life, things weren't looking as encouraging in the Canadian Economy. In order to improve the competitiveness of Canadian exporters, there has been talks by the Canadian central bankers that a weaker currency could be in the cards that is discussed in this simple article and could draw up a nice trade opportunity in 2014.