Page 178 – XTrade

The Currency Trading Online Business

The currency trading online business has a huge earning potential. Which comes at medium to high risk. Traders accept market risk, but attempt to mitigate it.

The Currency Trading Online Business in its Basic Form

The currency trading online business, is a business concept which appeals to traders and risk takers. The idea is all about taking calculated risk. Or even favorably asymmetric risk. These people usually learn forex trading through other traders or educators. And attempt to do their bests in implementing the trading methods they have learned. There is little or no effort on their part to change these trading methods. Usually because they regard their educators as sources of authority, which isn’t really true. Profitable forex trading is possible to achieve through such non proprietary methods. It’s just that the time commitment is huge, and profitability is 15% to 40% a year. And because capital requirements are huge. The whole trading business idea is not that different to a classic business. It’s similar to opening up a restaurant business, and running it profitably. Restaurant businesses have a high failure rate. But given the right place to run the, they can be very successful. Non proprietary trading can be successful and make good money, but not make millions fast. The currency trading online business is ideal for old fashioned, risk averse investors looking for something more active. Since they have plenty of time available, and sufficient funds. Even non proprietary forex trading will work for them.

A Currency Trading Online Business for Senior Level Bold Investors

The bolder type of senior level investors, are likely to change few parameters of non proprietary forex trading. Their currency trading online business idea is about fine tuning existing trading systems. And using their investing experience as part of this trading. They want to use low leverage, well funded CFD accounts. And they will trade using all kinds of money management, until they settle with one they feel happy with. Any good CFD forex broker can facilitate this. Senior level traders who are former stock investors, are likely to trade at low frequency. And think each trade through, carefully. By using their investing experience, which is about complex fundamental analysis. It is actually possible to check the open trades on any day or week, and spot the future losing trades early. This is something that the forex trading course will not and cannot provide to these people, nor to any other traders. Because fundamental analysis is ultra complicated, and any two investors will have different views. This analysis goes beyond and above technical indicators and price patterns, that most forex courses focus on. But this simple data is easy to interpret and easy for forex teacher to manipulate, and teach it as a best fit for their course philosophy. Fundamental analysis skills on the other are priceless, and can enhance any non proprietary forex trading system beyond recognition. And only high experienced investors have these skills. And as a result these senior level former investors can turn forex trading into a profitable, relatively low risk business. There are no shortcuts to learning fundamental analysis. Even a PhD in fundamental analysis won’t suffice, because it’s about analyzing a narrow set of data and possibilities. The markets are much bigger than PhD holders can handle.

Using a Trading Online Guide to Shorten Your Learning Curve

A trading online guide can help you avoid some common trading mistakes, and take years off your trading learning curve. You end up learning much more wisely.

What Learning through a trading Online Guide Means

Learning through a trading online guide simply means that you learn from the mistakes that veteran traders made in their careers. And trading from others’ mistakes is what wise learning is all about. It is difficult to put yourself in the situation of these traders and their emotions. Under circumstances which happened so many years ago. But with a little imagination and through reading these traders’ other books and materials, one can get into their mindset. These veterans do all kinds of trading, stocks, commodities and currency trading. They do not reveal their best secrets to anyone. But some very good trading tips are revealed in their trading online guide books and e-books. Some of these traders have worked at trading firms, investment banks, or simply on trading floors. They have seen how others trade, and have noticed the actions of successful and losing traders alike. Some of these trading tips may seem to obvious, after you read about them. But there is no way to easily figure them out as fast as you can read them in a trading guide. On average, it takes an experimenter many months if not years. Just to filter through many possibilities, and stick to the one tip that makes sense to use. If a trading tip is too ambiguous, poorly defined, or doesn’t prove itself in live trading conditions. Then it amounts to no tip. But these guides do come with real tips, big and small. You will be amazed with many seemingly obvious tips you didn’t even suspect existed. As well as more advanced tips which require some analytical skills. We will never know the best kept secrets of successful veteran traders. We can only guess that very good proprietary trading methods can be discovered through more than one path. At least this is what happens in science, where big discoveries are about a huge underlying truth. And usually more than one scientist, working independently, came to the same result. The discovery of the periodic table of elements in chemistry is such an example. Therefore, the same must be true about proprietary trading methods.

What a Trading Online Guide Offers Apart from Actual Tips

A trading online guide, allows you to get into the mindset of the author. And to possibly figure out more of their original thoughts. You can profile traders, by reading their books and seminar materials in-depth. So if a bigger trading tip, much more important than all other tips is somehow implied through the content in the trading guide. You might be able to put two and two together. In online CFD trading guides for example, a lot is explained about this or that trade and how to hedge trades. Nowhere it is mentioned that you can use CFDs in arbitrage trading and in hedging risk on Carry currency trades. But as you read through through that CFD guide. And you have arbitrage and Carry trades at the back of your mind, the big picture will go off like a light bulb in your mind. Through what-if scenarios. And when few different criteria are met, and different trading tools come together. Then arbitrage and hedged Carry trades are all possible. And they can be implemented through ordinary forex brokers. Brainstorming of new trading ideas is important. And it will come to you through reading other traders problems, or even through combining the ideas of two different traders. That’s why reading trading guide materials is so helpful and insightful.

Currency Trading Online Companies and Banks Do

About Trading Online Companies and Banks

The currency trading online companies and banks do has to do with hedging risk and speculation. Import- export companies mainly hedge risk, while banks do both.

Currency Trading Online Companies, Banks and Hedge Funds Do

The kind of currency trading online companies, banks and hedge funds do, is sometimes very similar. Other times it can be completely different. An export company in Japan for example, is mainly concerned with exchange rates between the Yen and the Euro, and between the Yen and the US dollar. If too much is exported to the US, a falling US dollar will hurt their profits. But also an excessively rising Yen, may be bad as well. Companies hedge against unforeseen and sharp market movements, through a series of sophisticated trades. Hedge funds and banks trade for speculation so as to profit from the markets directly, but some of their trades are similar to those performed by corporations. Then there are manufacturers, who have their own investment banks. And these Company-owned investment banks do both protective hedging and speculative trading. So in reality there is no big difference between large sophisticated companies and banks. They all take risks in the market, and they all provide liquidity to other traders. Profitable trading in foreign currency is always the goal. Some investment banks can also be involved in providing consumer level financial products, such as mortgages to clients in a foreign country. Or even buy mortgages that are under water, from the original issuing banks. So in effect, they can also be related to consumers just like car makers and airlines are. The currency trading online companies and firms do may also involve day trading forex methods, and other complicated trading methods.

How Can You See the Currency Trading Online Companies and Banks Do?

Is there a way for you to see the currency trading online companies and banks do? Well, not really! It is possible to figure out some of the strategies of these firms, and how they are likely to trade. That is based on the risk that export companies will face as currency rates change dramatically. This is fairly easy to figure out. But these firms and banks themselves can get it wrong, and be on the wrong side of the market. Moreover, their trades are revealed through the COT report, but they are meaningless. The fact that commercial traders (as they are known), are long a certain currency, doesn’t mean anything. It doesn’t mean that that currency will rise, nor that they expect it to rise. It may simply mean that they are long another currency, which is inversely correlated. This trade may be an actual forex trade, or the exposure to the global forex market through their import / export activities if they are a company. That fundamental trade is not seen in the COT report — only the hedging trade is seen. Therefore the COT report is totally misleading, about half the time, and therefore useless to retail traders. Some traders believe that only in stocks, one should watch out institutional trading activity. Single stocks, which are well selected, are worth investigating further. Stock traders tend to monitor successful investment banks, and what stocks they invest in. Then trade the same stocks, through CFD contracts and the best forex trading platform they can get their hands on. This does work with certain investment banks, but that’s about following institutional trading. When it comes to forex and commodities, companies and banks take the same risk as you do. Following them is not a good idea because they can be wrong on the trade.

Predicting and Trading Online Markets

Predicting and trading online markets in currencies, stocks and commodities is the dream of every dedicated trader, as trading can be a highly rewarding job.

Predicting and Trading Online Markets during the Most Active Hours

Trading online markets as a full time task, or job, has been the goal of many traders. Most of them do focus on the active trading hours, in an effort to identify solid price trends. Predicting and trading online markets profitably, is all about gaining an edge. Some kind of advantage which will allow the trader to use market data to predict aspects of future price action. Forex exchange rates for example draw the focus of many currency analysts, who want to try trading. Those rates are difficult to predict, just like any market is. But their predictability varies with time, as they tend to become more predictable during active hours. Commodities on the other hand are also impacted by active trading hours. But on the whole, looking into their daily charts, they are easier to predict. Especially raw material and agricultural commodities. A currency pair may be impacted by the central bank of its country, on purpose, so as to slow down its undesirable trend. Commodities cannot be impacted this way. And except for the limited impact of the US dollar, commodity prices tend to be easier to figure out. Perhaps much more than stocks and certain currency pairs are. But traders have found ways to make millions in all kinds of markets. One trader’s difficult market is another trader’s easy game. So be sure not to take advice from veteran traders on this. Just because a veteran trader advises against trading a certain market, it doesn’t mean you shouldn’t. Because you might use a completely different approach, which deals with predictability and risk much better. Some day trader,s for example, only trade the e-mini SP500 index, thinking that the active hours in that market are easy to handle and trade, and they dislike currency trading as being too difficult. Other traders however, have found the exact opposite to be true. They believe that currencies are much better than the e-mini SP500 and stock indices in general. The reality is that stock indices tend to have boring trading days, where price hardly ever moves at all. Whereas with currencies, you have such a wide range of different markets. Not a day goes by where you won’t find a currency pair with momentum and active trading hours.

Trading Online Markets for Making Very Big Profits

Some traders are in the business of trading online markets for only few years. Believing they have dependable strategies and skills, they want to trade a lot for 5-7 years or less, and then retire. These traders are very few, but they do exist. They know what is CFD trading and how the FX exchange mechanism works, at a fundamental or sophisticated technical level. They also know that the US dollar can override both fundamentals and technicals, and obey geopolitical events or safe-haven investor activity. When this happens, the US dollar defies belief, and moves in any direction it wants. Often defying the analysis of top investment banks as well. Traders who are in for intense trading, and plan to retire soon, want to capture the best active trading hours or days. They still trade selectively. Rather than looking at high frequency trading and too many markets, they look at few cherry-picked trades. Then they trade these opportunities with large size trades.

Forex Trading Online Tutorial

Risk hedging is a complicated subject which few traders can master. A forex trading online tutorial can provide basic insights into dynamic trade risk control.

A Forex Trading Online Tutorial on Risk Hedging

A forex trading online tutorial on risk hedging will typically introduce basic concepts of risk control through hedging. And it may cover dynamic hedging and other more complicated scenarios. Dynamic hedging is about hedging as the trade moves more against you. And being protected as new risks arise. The forex market is impossible to handle through static hedging methods, because it’s impossible to know in advance exactly how volatile a currency pair will be. Dynamic hedging is all about dealing with real life and uncertain events. A trading online tutorial will provide some basic ideas, with examples. So that the viewer of this tutorial will use these concepts as the basis for brainstorming new and often original ideas. Nobody has a complete understanding of risk hedging. And in fact all serious traders use mathematical models and spreadsheets to understand it. It cannot be taught verbally, and it cannot even be visualized through equations on a blackboard. Equations need to be manipulated as functions, against a wide range of input and output data. And all this data has to be clearly checked on a spreadsheet. Many people can improve their forex trading dramatically, when risk is modeled and mitigated properly. The tricky part is that risk is always hidden, and visual inspection on charts and past price history cannot reveal it. When traders check past market charts they simply think oh I could have bought here and sold there… but they still don’t trade like that. Because when they actually open the trade fears sets in, and past charts seem irrelevant.

When a Trading Online Tutorial is Really Useful

A trading online tutorial is really useful in dealing with key ideas only, as food for thought. And especially so on intermarket analysis and intermarket risk hedging. This hedging has to be dynamic also, and things can get really complicated. But analytical minds find ways to simplify things. Online trading is much more interesting when intermarket analysis is taken into account. Because traders can see those other markets that impact their key market the most. Dynamic risk hedging takes into account these other markets and may provide better hedging, or more cost effective hedging than the original market can offer. This is an issue investment bankers deal with all the time. As they always look for ways to make hedging more efficient. You can hedge trades in USDCAD for example, through various other markets. But crude oil and some oil stocks are often the best hedging market. A good tutorial on dynamic hedging will be difficult to learn, but will also offer the basic ideas. Ideas on using mathematics to measure and model risk. Then do hypothetical trades based on these ideas. You will see that equations go far and beyond visual chart analysis.

Is Forex Trading Online Made Easy?

Is really forex trading online made easy through all these training courses, or are they all intended to sell new naive traders on promises and marketing hype?

Is Forex Trading Online Made Easy through Education Or Not?

New traders are indeed naive and delusional about many aspects of trading. Just like they are delusional about many other professions. Professions are where if you don’t have a set of proprietary and unique skills, you will fail. Forex trading online made easy is what many training courses and seminars imply they have done, and are now offering you. They all assume that you are a committed, fully devoted trader who will follow their advice and will make good money in the markets. But this is not so in real life. Most profitable traders have learned to trade through such mentors and training courses, but their profitability is less than $3 per hour. That is less that many fast food companies pay their staff. So it’s not even worth mentioning as trading success, because it’s not success at all. $3 an hour, trading forex is a total failure. Live forex rates pose great risks to your capital, they are worth trading them and taking these risks. But only if you can make much more than $3 an hour. Forex trading online made easy is actually real. Trading has been made easier in recent years. But if one doesn’t have enough trading skills they will fail, regardless of how easy trading has become. And these skills are not fully provided in any training course, book, or seminar. Aspects of trading that have become easier, are things like reading a market chart, and placing a trade at best possible price through today’s sophisticated CFD trading platforms. And that’s about it. Training has become easier too, but along with good knowledge, traders are also taught all kinds of nonsense and about some useless indicators. So misleading information has found its way through just as easily. All through improved educational resources.

Trading Online Made Easy in All Markets?

Trading online made easy through technology and access to better trading mentors is real, in various markets. Perhaps even more so in the commodities markets, which are not among the most popular markets. As most traders focus on stocks and major currencies. But commodities are very interesting as they offer some unique opportunities. Basically, there is less to analyze in a commodity market, it’s all about supply and demand and little else. So the new trader stands a better chance of winning. And through online CFD trading the new trader can eliminate a great number of risks. But it does take dedication, strong will, and a creative mind to figure these things out. Commodities however do provide a very favorable trading environment, through their simplicity and through liquid CFD trading.

If a trader can make money in commodities, continuously, for 6 months. Then they will become a very good trader in other markets too. There are so many different time frames to trade commodities. And correlated stocks and forex pairs, so in effect commodity trading overlaps with stock and forex trading. All trading online made easy through commodities, is a sure way to trade safer and have faith in what you do. Commodities carry a lot of wight, it’s a fact. You only need to see what happens in the direct physical world around you. When crude oil prices move to extreme lows or highs. It’s all real markets and real impact. Extending to currencies and using an online forex trading platform, traders have a world of comfort and wide access. Many good traders who make millions today, trading forex. Actually started their trading as commodity traders, being specialists in one commodity. And when they fail to sustain profitable trading in a new currency, they switch back to commodities and their correlated currencies. When you are, first and foremost, a good commodity trader, nobody can tell you that trading is a losing war. Even if your trading fails in other markets, commodities prove that markets are not random. And that you can be a specialist trader who doesn’t trade at random. Moreover, the forex trading international community is a group of very street wise people. Some of them engage in forex carry trading and other advanced hedging techniques. There’s a lot of preparation, and a lot of funds have to be committed in those strategies. But trading is indeed easy and profitability is amazing. Think that a carry trade strategy , utilizing $50,000, can generate $300 per trading day. That’s about $60,000 per year. And the only reason many traders cannot do this, is due to their inability to hedge directional carry trade risk. It costs a lot in terms of expertise, capital costs are acceptable, at $50,000. But making $300 per trading day, at no risk of getting wiped out, that is the definition of easy trading in today’s markets.