Page 180 – XTrade

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.

Trading Online Forex for 3% Monthly Gain

Trading online forex for 3% a month comes with a huge burden of commitment and focus. Even 3% per month is actually a lot, as it adds up to over 40% per year.

Trading Online Forex for Steady Success

Many traders think that success in trading forex works linearly and predictably, so 3% is not that much to ask. Trading online forex while aiming to make even 3% per month, is a huge challenge, and only experienced traders can do it. Because all other less competent traders lack analytical and psychological skills. And that 3% profit target, will come with huge risks, so huge that the trading strategy will fail. And it will fail to be profitable at all, even over one year. So it is important to realize that even small profit targets are difficult to achieve. If it was easy, many angel investors would invest in such traders. 3% a month, on one million dollars is $30K, which is a lot of money to all investors and traders. So trading online forex for quick and easy success doesn’t work, it’s a myth. It is possible to reach such basic profit targets, at low risk and drawdown. But it comes with enormous commitment on the part of the trader. So much that unless they are able to make a very good living out of it, they are not going to continue, it’s that simple. That 3% is a magic number, since it’s a pivotal profit target for many traders. Aiming for less than 3% a month will not produce enough money, in most cases of trading forex. And aiming for more than 3% a month starts to become extremely risky, and puts more stress on the trader. Nonetheless, trading is much better than simply investing in foreign currency and waiting for weeks or months to see that 3%. Most forex brokers facilitate trading which can yield 3% per month. Especially CFD brokers which facilitate trading in a way very beneficial to the trader. Beyond that, all success is down to the trader.

Trading Online Forex for Getting Rich Quick

Trading online forex for becoming rich very fast, may sound ridiculous to many. But some traders actually can do it. These are former losing traders with long learning curves and many bitter experiences. They are trading veterans who actually lost a lot of money trading, but also learned priceless trading skills in the process. Psychologically speaking, the more emotional an event is, the stronger a memory it leaves in our minds. That is why many of us can remember events that happened 20 or 30 years ago, as if they happened yesterday. While we cannot remember what we did last week. It’s because strong memories are related to emotional situations. So trading veterans who lost very big money, through painful trading mistakes remember all these trades. And what they did wrong. This experience cannot be emulated on a new trader by just teaching them trading, because there’s no emotion involved. And even though emotions are bad, and we all are told we should avoid them in trading. Veteran traders are emotionless now, but will never forget those painful losing trades. And some of them are competent enough to do high frequency trading and become rich very fast. Or even trade someone else’s account at that pace, and achieve phenomenal success.

What is Forex Broker Efficiency

Traders who know what is forex broker efficiency are wise. Concerned only about getting the best best filling price and stable price quotes, and nothing else.

What is Forex Broker Efficiency and its Importance

Knowing what is forex broker efficiency in terms of filling price, will set you way ahead in trading. Especially if you are a scalper or other high frequency trader. Knowing what is forex broker marketing will also help you choose a good broker. In the world of financial trading, many beginners tend to go for the forex brokers advertised most, or the ones offering biggest bonuses and offers. And many of them focus too much on dealing costs. But that is the wrong way to make decisions and choose a broker. Wise traders on the other hand care about one thing and one thing only, that is efficiency in trading. It simply means how good a filling price the broker can get you when you close that trade. Ideally you want maximum profit on winning trades, and minimum loss on losing trades. This is what a good filling price brings. And top brokers, especially in the field of online CFD trading are so well networked that they can handle your trades in almost no time, and at excellent filling prices. CFD brokers are ultra liquid and efficient, no one can argue against the facts. And this liquidity makes your trading efficient and more profitable than it would otherwise be. Even if your CFD broker charges high fees it may actually be much better and much more cost effective than many Futures and spot market brokers. Because many of these non CFD brokers entice clients through low dealing costs and bonuses. But their average filling price is horrible, and also they have unstable price quotes, where they keep on re-quoting you but when you click on the quotes to trade, the price has already expired and a new quote appears. Non CFD brokers’ shortcomings end up costing you so much more that the savings on their low dealing costs are dwarfed beyond worth comparing! But this loss is subtle and new inexperienced traders do not notice. CFD brokers however, even if high dealing costs are in place, are able to propel the profitability of your trading way higher.

What is Forex Broker of the Year Award Winning All about?

If you have heard about award winning brokers, it’s typically a marketing strategy by brokers to gain popularity. But there are many award winning brokers who are not the best around. It is best to choose a well rated broker, rated by real traders who have traded through the actual platform. This is the realistic way to assess a broker. Awards and marketing tactics such as bonuses and offers, do not appeal to wise traders. Any wise forex trader who knows what is forex broker award winning all about, will see it with skepticism. This is not a rule of thumb, but experience has shown that the best brokers are not necessarily the most popular ones. Wise traders ask around, and choose a broker which has many satisfied clients. Award wins and bonuses are not going to fetch you that best possible filling price when you trade at $50 per pip. And every pip will count. But good networking, sophisticated order handling, and liquidity will! They will fetch you the best possible filling price every step of the way.

What is Forex Spread and Does it Matter?

Forex traders may know what is forex spread. It is the difference between the price you buy and the price you sell a currency pair. And how brokers make money.

What is Forex Spread Cost

Those who may not know what is forex spread cost, it is simply the total cost of the charge incurred through the price gap, when dealing currencies online. This is how brokers make their money, in order to stay in business. Spreads in general are of little concern to most traders, because they tend to be tight, and the amount charged is negligible compared to trade size. Those who trade at very high frequency and know what is forex spread long term cost, may become concerned. In most forex trading strategies traders are open minded and look at the big picture. But some penny wise – pound foolish traders do make quite a fuss about spread cost. And even more about widening spreads. Which is a normal phenomenon during volatile times. However, it is wrong to focus too much on spread cost. Many trades eventually blame their own failures on their brokers, and the charges they incur. But if a trader is doomed to fail, they will fail anyway. So brokers with high commission charges are not the cause of failure. And in fact, some high commission brokers, with the highest spreads and possibly extra charges, may be better than others. That is because they deliver better on trade filling price. It is definitely wrong to judge brokers based on dealing cost alone. Nonetheless spread cost is important to traders such as scalpers and other high frequency traders. But even in that case, one has to compare dealing costs versus filling price, and overall efficiency.

What is Forex Spread as an Indicator?

You might not know what is forex spread as an indicator. But widening spreads do signal volatility and increased risk. Unlike stocks, where risk hints downside. Currency risk works in both directions. So widening spreads simply mean more volatility is expected. And traders should pay attention. Anyone who knows what is forex risk and volatility, should watch spread size on important pairs such as EURUSD. Forex charts do reveal how brokers sense market risk, and how they deal with it. By looking how spreads widen or contract relative to where price is on the currency chart. Brokers are very knowledgeable about various markets. And their concern may provide warning about coming volatility. Long before anyone in the media notices. The forex spread indicator works better with stocks. If spread costs increase suddenly, there is high risk that the stock will go down. Or at least that it will trade in a wild way, where short stops, or even medium size stops will not work. That’s about as far as you should be concerned about spread costs, and see them as an indicator and not as an obstacle to trading success .