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10 Things to Know Before Beginning Online CFD Trading

Online CFD trading works better when the trader implements ideas and concepts for better risk control. After all, it’s more important not to lose than to win.

Online CFD Trading Tips

1 – Traders should take online CFD trading more seriously than other kinds of instruments. This is because CFDs do offer far superior trading performance through better liquidity and linear pricing.

2 – Traders should avoid using low risk-reward ratios. The idea of using low risk-reward ratios is about using stops of X size. While expecting to take profit at 2Xor 3X, which probability wise does not make much sense. The probability of making a profitable trade goes up when large risk-reward ratios are used.

3 – Traders who make make a lot of money in the financial markets do break some of the classic trading rules. Total obedience to such rules will prevent you from reaching your true potential.

4 – Online CFD trading offers the opportunity for enhanced temporary hedging of losing trades.

5 – Day trading on daily forex news does not really work

6 – An online CFD simulator does help in evaluating all kinds of trading ideas and strategies, as well as money management systems. It is therefore a very useful tool.

7 – Commodities and stocks are much better to trade through CFDs as opposed to direct access. You instantly have advantages over non CFD traders.

8 – Fibonacci theory doesn’t work in the financial markets. Wise CFD traders have figured this out already and have abandoned this method, along with some other flawed trading methods.

9 – Do pay attention to the US dollar. Markets that are dollar sensitive defy all technical analysis methods and signals. And it happens every time the US dollar moves due to geopolitical concerns.

10 – Take CFD trading seriously. It can facilitate very efficient retail size trading. Which is more than enough to allow a trader to make millions. Don’t be lured by brokers offering tax free, cheaper alternatives such as spread betting, futures, or even options. These instruments suffer from non linear pricing, inherent inefficiencies in fast trading, and very poor filling price.

Online CFD Trading Wins Hands down over Other Instruments, in Many Ways

Most traders focus too much on leverage and dealing costs. But the real benefit of CFDs is without a doubt superior efficiency. In reality, you don’t need more than 100 to 1 leverage in forex trading. And possibly no more than 200 to 1 in some commodities and highly priced stocks. All CFD trading accounts can facilitate sophisticated trading. And the future is very promising as these CFD brokers will be the first to introduce more sophisticated contingent orders and trading tools. Which means that traders who know their markets well will be able to do much more. Especially on risk control. The CFD trading platforms and the brokers as a whole are supported by superior liquidity-providing technology, which is second only to the more expensive ECN brokers.

Be Wise and Challenge Questionable Tips

Even profitable traders make mistakes when giving out tips. Just because a trade was very profitable and the trader used Fibonacci theory to plan that trade. But it still doesn’t prove the theory right. By learning to challenge and analyze these winning trades you will develop very sharp trading skills. Many books and seminars on trading CFD for dummies will inevitably include some false tips and ideas. You have to question things further, and take only the good part out them. It’s important to analyze your own winning trades in greater depth, to figure out the cause of success. Attributing winning trades to the wrong signal or method, will later lead to losing trades. Especially winning trades tend to be the most deceiving ones, because the trader feels too good about them… Online CFD trading will allow you to lieterally make millions by taking these facts into account.

The Forex Trading Business Opportunity for Starters

Paths to the Forex Trading Business Opportunity

Grabbing the forex trading business opportunity is an elusive goal for many traders. As misinformation and poor planing prevent them from consistent profiting.

The Forex Trading Business Opportunity is Too Good to Resist

Forex trading as a business opportunity is indeed a very appealing one. That hardly anyone wants to ignore. The promise of low operating costs, and the potential for good profits, is very good. It is in fact much superior to many other classic business opportunities. This is because the forex market is a global market. Where it is in fact possible to profit, on a global scale. Business models which focus too much on the local economy are inherently limited in what they can offer. This is because wealth, as defined by money, flows one way. More specifically it tends to flow from large geographical areas to small big city areas. And it constantly loses value, due to to inflation. In other words, money is not really indefinitely recycled. It goes around and around several times until its buying power is completely gone. This is why countries must have open borders for global trade. And to make it easier for businesses to import and export over very large geographical areas. So, it’s not possible for a company to really survive, based on the domestic market alone. And moreover it’s not efficient for countries to be cut off from global trade. And to be self-sufficient. Economic theory has proven that best efficiency is achieved when each country is focused on few specific products and exports only. The forex trading business opportunity is a global one. And it is not limited by local boundaries. That is why it is possible for small forex traders to make millions. Whereas a small local business can never make millions. The local market is saturated, there is no volatility, no big opportunities and so on…

How to Grab the Forex Trading Business Opportunity

The forex trading business opportunity is a realistic goal, only when traders know their risks. Traders who want to trade forex online for the first time, and who need training. These traders need to study the global economic problem, and how big currency investors think. The way to avoid poor planning and bad strategies, is through in-depth understanding of global trade and investing. If you rely too much on technical indicators and popular trading methods, you will only scratch the surface. The forex trading business opportunity is peculiar and obscure. No amount training can fully prepare you for the challenges ahead. First, you will have to give up the notion that some billionaire trader out there knows the markets inside out. Because nobody knows the markets this good. All investors, even billionaires stand to lose big money in the forex market, nobody is exempt from market risk! Moreover, because of inflation, all these billionaires are constantly losing money. So they are always looking to put the larger part of their money in low risk, low yielding currencies, just as long as the yield offsets inflation costs.

Don’t Settle for Average Profitability

The forex market is risky, but also profitable. When trading as a business you need to be selective in your trading. Stay out when the markets are tough to beat. And trade with more money when the markets are good. The idea is not to match the profitability of successful traders, but rather to exceed it! So much of profitable traders’ advice will not necessarily be useful to you. Trading is very affordable today, and most CFD forex brokers minimum deposit is no real obstacle to starting trading. You simply need to implement selective trading, use money management, and avoid excessive leverage. The rest of the work is on the trading front. And remember that this is a global business, where market conditions create unsaturated situations, where one can profit easily. But when conditions change back to normal the same strategy will not work again.

Basic Best Forex Trading Strategy Tips for Beginners

Best Forex Trading Strategy for Beginners

The best forex trading strategy new traders can use boils down to personal choice and reality checks. If the strategy requires skills, it’s probably a good one.

The Best Forex Trading Strategy

The best forex trading strategy is one that involves trading either a commodity currency, such as USDCAD. Or a currency pair that is not impacted at all by any commodities and the US dollar. In the case of the latter, traders need to choose carefully. A truly independent currency pair where the risk of the US dollar is removed. As well as commodity market risk. Such a currency pair can be predicted through analysis on the related local economies. Beginners will have a hard time trading any US dollar cross. Even USDCAD is often confusing, but because of its strong correlation to crud oil, it tends to obey technical analysis strongly. Learning how to trade forex through a truly independent currency pair, will offer less confusion. In any case, the pairs to avoid are popular pairs, such as EURUSD. Even though this is the largest pair, by trading volume. The confusion is enormous, and there is no evidence that EURUSD leads over other correlated markets. EURUSD can be a follower pair just as easily as many other markets. The truth is, most popular currency pairs are difficult and too confusing to trade.

Beginners are Impatient

Beginner traders are usually impatient and want to reach success overnight. They want o literally trade for a living very soon. Thinking that they are smarter than everyone else out there. And yet, at the same time they do use trading tips which are at least partially wrong. Classic trading rules and tips are for the most part not relevant to actual trading. If they did work half as much as their reputation hints. Then profitable trading would be piece of cake. Beginner traders don’t question the validity of these rules and tips. Because they think that the older generation of traders has figured everything out. Beginners can trade forex online, starting with a simple currency pair, ideally not a popular one. They should rely more on chart price patterns over all other indicators. And partially on longer term fundamentals. The probability of success increases dramatically if also the daily news is ignored altogether. Attempting to make sense of the daily news is impossible. And even those that use it, use it as a volatility and momentum indicator. And not as a price direction indicator, as many commentary articles will have you believe. These articles have to make a big deal out of the daily news. But news itself is as good as useless for determining market direction. You cannot expect to develop the best forex trading strategy if you attempt to decipher the daily news. It just won’t work at all, so it’s best to by-pass the daily news. By using it as a simple volatility indicator and nothing more.

Best Forex Trading Strategy for Small Account Traders

Small account traders can implement trading strategies on the above tips. It is a good idea to have sufficient funds in their accounts and risk up to 25% or 30% of their balance in any active trading week. Risking less than that over any good trading week, will result in limited market exposure and low profitability. It’s best to use up to 30% in all active trading weeks. And just be more selective, and not trade at all during weeks where volatility doesn’t favor your strategy. Some strategies require high volatility, and some others require very low volatility. In all cases, a good CFD trading account can facilitate forex trading, allowing you to capture even minor market moves. And to even implement scalping trading. All these tips can make up the best forex trading strategy, for all beginners.

How to Change Your Online Forex Trading Strategy to a Winning One

Struggling traders persist on the same trading plan, in an effort to win back losses. But success becomes elusive through short-sighted online forex trading.

Online Forex Trading is Not a Routine Day Job

Most people have learned to be persistent through their former day jobs, where the more you work the more money you stand to make. And persistence is good, no doubt about it. But you should persist on the goals, not on the means, and the trading methods used. Online forex trading can become very successful when one has loose goals, and is persistent enough to reach these goals. The goals may change slightly, but the one thing that can change dramatically is the actual trading plan. Traders who persist on the same trading plan, especially one that has rigid, strict rules, end up losing all their money. There are strategies and methods that are more flexible, and are adjust to changing market conditions. And these are usually much more effective than the rigid approach. Above all, it’s market volatility. This keeps on changing deceptively all the time, from month to month. It just gives you a short period of deceptive success, only to prove your strategy wrong the next month. Traders need to focus on the big picture on the markets, and use flexible trading plans. In fact, the tighter a trading plan is, the more likely you are to encounter something out of the ordinary, and you will be powerless. Because you will not be used to thinking outside the box. All successful traders are free to think, and to even break classic trading rules when necessary. Even the best forex trading strategy in the world has not figured everything out in advance, and it allows for free action.

The Harsh Reality of Online Forex Trading and Misleading Beliefs

Traders are bombarded daily by all kinds of news, opinions and tips. Which at the end of the day amount to useless information. And the over-disciplined trader is at a huge disadvantage because they lack the initiative to think fast and not do things by the book. Online forex trading can very successful by breaking some of the classic rules, but while doing so within the right mindset. For example, you might think that emotional trading is bad. That is not really true. Seasoned traders do have emotions about the market, it’s just that they don’t get excited about fast moving markets. At least not when they don’t understand what’s driving all that momentum. If emotions are based on solid analysis methods, the markets will not easily fool you. Wise traders are emotional traders, because they feel the markets, and that’s what it takes to identify the uniqueness of each trading day. One has to be sensitive and emotional to figure out the real hidden forces driving the markets. Moreover, it is becoming more and more apparent that the so called disciplined, emotionless trader doesn’t really exist… Or at least they are not an impressively profitable trader. Look all around you, at all the successful people, lawyers, businessmen, scientists, they all had moments of Eureka in their careers. And they were obsessed with whatever they were doing. Well, obsession can be good in such cases and it leads to big success. And it is the product of a sensitive emotional mind. Therefore, deep down, to be a really profitable trader, you actually have to be a wise, emotional, obsessed trader, persisting on the goals.

The Fine Line between Being Sensitive and Over-Analyzing Markets

Profitable online forex trading comes from knowing how to be emotional and sensitive, in the right way. This will become apparent through your trading results, very soon. But it will still take you years of trading experience to make millions in the forex market. That’s just the way it is. But it will take you fewer years to get there, if you break classic trading rules and not do what everyone else is doing. Set goals, and try your bests to reach these goals. Loosen up the requirements on discipline, emotions and so called risk-reward ratios. And take trading one day at a time, while also looking at a longer time frame, as if you were an investor. You can trade forex online and really make serious money, through your own unique approach. Foreign exchange currency trading online for beginners will often mislead you into believing too much in discipline and emotions-free trading, as well as other concepts. Which have not been proven to constitute really profitable trading strategies.

Forex Trading Strategies for Maximum Profit

There are so many forex strategies that traders can choose. And it’s easy to get confused or misled as to what really works. But it’s possible to choose wisely.

Forex Strategies Which Do Work

Forex strategies which really do work, are based on simple logic, and transparent facts. On the other hand, forex strategies that don’t work well enough… These tend to rely more on urban legends and superstition. In general, it is possible to predict market price, up to a certain percentage of success. And it is possible to develop the best forex trading strategy by studying fundamentals, technicals and geopolitics. It sure involves a lot of detective work, and only a handful of clues lead to actual trading action. Most of the time, the wise forex trader does all this work, but no solid market direction is detected. And yet, this is the best way to trade the forex market. Mechanical trading systems provide many more signals. But trading itself becomes boring and lacks character. Traders who quit boring day jobs in pursuit of a trading career, look for excitement. And this excitement comes from the challenge that detective work offers. The challenge is in that every day in the markets is seen as unique. The belief is that history doesn’t quite repeat itself.

Forex Strategies for More Profit

Forex strategies can offer more profit, when trading itself is no longer a routine job. But rather an active job, where every day is unique. Through practice and skill development you will able to see fundamentals, technicals and geopolitics. And you will be able to see which factor is more relevant at that time. Fundamentals are more tricky because a fundamental factor can actually have a double conflicting impact on a currency. Such as a short term positive impact, and a longer term negative impact. So understanding the timing makes all the difference. And even though you are not a longer term investor. You need to look at currencies as if you were an investor, and look at politics, stability and interest rates. These factors will determine whether the next buy signal on the daily chart will be for real, or a false one. Traders lose money in forex trading because they focus too much on their time frame of interest, ignoring investor mindset and central bank policy. You can first learn forex basics, and then extend to these 3 fields of analysis.

Dealing with Short Term Risk

Remember that all trades start out as losing trades! There is no need to hesitate to take action, such as adding to a losing trade. Or even giving a seemingly losing trade a second chance. But because the stress of seeing a losing trade growing larger and larger is too much to handle. You can actually hedge that open losing trade, temporarily, until it stops growing. By locking the open loss, you will be free to think objectively, without stress clouding your judgment. You should focus more on dealing with these losing trades. And also focus on improving winning trades that took too long to become profitable. Winning trades that became profitable after far too much time, hint that could easily have been losing ones. And that entry criteria need to change. Such forex trading strategies can dramatically improve profitability, all through limiting short term risk.

How the Gold Price Affects Your Online Forex Trading Strategy

gold price affect on online forex trading

Commodity prices are important in online forex trading, due to correlated currency pairs. Gold price for example directly impacts all Australian dollar crosses.

Gold and Online Forex Trading

Gold impacts all Australian dollar crosses, and traders have to watch major trends in gold price. Minor movements in the price of gold may not have an impact at all. But major movements certainly will. Online forex trading in such cases becomes easier through the clarity that gold price provides. Entire forex strategies are based on commodity analysis, and gold is a very popular commodity. Traders are able to avoid much of the market noise and risk. Simply by looking at a commodity’s finite supply and minimum demand. After all, the suppliers of that commodity cannot just print more of it, as is the case with non physical assets. Online forex trading of AUDUSD and more pairs, relating to the Australian dollar are a very good choice. When gold sets a solid trend, then AUDUSD will generally move in the same direction. Because Australia is a very big gold exporter. Moreover, gold is unique, irreplaceable, and has many industrial uses. It is in fact more unique than even crude oil. Because gold cannot be made synthetically, whereas crude oil can be made through various artificial methods. The price trends of gold therefore carry a lot of weight, and can provide very solid medium term trades.

Online Forex Trading of AUDUSD for Best Results

AUDUSD is an ideal pair for gold traders and analysts. Since it trades almost like gold itself, and it is easy to figure out the impact of the US dollar. As well as minor day to day moves, which may not constitute a solid market move. In general, the same methods can be used on crude oil and other commodities. But in the long run gold is unlikely to be replaced by anything else, as it is a unique commodity. Online forex trading can be further enhanced by looking at market risk, and how traders see precious metals at any particular time. Gold however is not immune from excessive demand and parabolic rallies. Which always eventually result in steep downward corrections. These trends are longer term and much more difficult to predict. In a nutshell, traders should stop buying gold when the trend seems to have gone parabolic. That is a chart steeper than 45 degrees.

The Wise Commodity Forex Trader

Wise commodity currency traders establish extreme lows and highs for the price of the commodity, gold in this case. And then trade the related currencies accordingly. So turning points in AUDUSD may not be easy to spot on its charts, but fundamental analysis in gold, can tell you much more. And as always, fundamentals prevail over technicals. This is the best forex trading strategy as far as AUDUSD is concerned. Because the defined supply and demand in gold help remove a lot of market risk. Traders can also learn forex basics and extend the concept to silver, and other unique commodities. Generally, all precious metals move together with gold, in the same direction. Just be ready and willing to fade technical signals on currency charts, in favor of the fundamental signals in these commodities.