Trading Online Worldwide for Best Liquidity

Today’s traders have access to trading online worldwide. This enhances efficiency and reduces extreme volatility. Which in the old days could wipe everyone out.

Trading Online Worldwide Offers a Better Deal on Every Trade

Trading online worldwide offers much more stability not only to retail traders, but also to investment banks. Investment banks are just as likely to be wiped out as the average retail trader is. This is because risk, in theory at least, is always greater than reward. And because as with all things in nature, there is a million ways for things to go wrong, and only few for them to go right. Extreme market conditions, extreme volatility and natural disasters can wipe out even the largest trader. No better example than the collapse of LTCM in 1998, which was wiped out in trading because of not controlling risk properly. And this was sophisticated trading, but based on the assumption that Russia would not default on its debt. And as always, assumption is the mother of all failures. Barings Bank was also wiped out, in 1995, because of risky Futures trading combined with the earthquake in Japan that year. Today, trading online worldwide still doesn’t protect you against such events, but you as a trader can put stop losses on your trades, accept failure and cut your losses early. Just about every forex broker today offers better liquidity. Especially CFD brokers who offer one way, highly beneficial liquidity and still protect you from many adverse market effects. These brokers can handle retail trading well, and trades up to $100 per pip very well, at all times and speeds. You as a retail trader can choose the best forex trading platform that matches your trading style, and gain access to a worldwide market. Market stability means that you can always find another trader to take the opposite side of your trade. And they in turn can also find another to close their trade and so on.

Trading Online Worldwide
When you open or close a trade, some other trader of different time frame and based on a different country helps take the other side of your trade. That’s what liquidity is all about, the ability to connect with other traders.

Trading Online Worldwide Makes it Possible for Wise Traders to Win

Trading online worldwide makes it possible for traders with original ideas to implement them fast and efficiently. Anything from hedged Carry trades through to directional forex trading ideas, can all be implemented one way or another. And the trader in question can even hedge risk better on losing trades, before making a decision on them. Forex signals based on momentum and divergence patterns are also more solid and reliable thanks to today’s massive market. And this is because traders look at the same charts, and are connected through them. Back in the old days, no such trading could be done, because participants were very few, and volatility was through the roof. Volatility is still a very strong factor in the markets, it offers opportunity and poses risks, but it is at levels which are acceptable by most retail traders. Nonetheless, the use of large size stops is a mistake, even today, and it is not compatible with any level of volatility. Many traders cannot embrace volatility at all. But those who can are able to turn many adverse market moves into profitable opportunities.

How to Use Forex Trading Signals

In order to use forex trading signals efficiently, traders should adjust more to reality lessen their emotional behavior. Such as confirmation bias habits.

Why Many Forex Trading Signals Fail

Forex trading signals tend to fail, very often in some strategies. And it happens because the criteria are not very clear, there is ambiguity and room for confirmation bias on the part of the trader. Forex trading is promoted by many mentors, why themselves use ambiguous techniques. The mentors however tend to trade at relaxed pace, and make small profits. The new impatient traders are the ones who want to make money fast, and tend to suffer from all kinds of delusions. This is what makes them see profitable trades all over the charts. Forex trading signals are going to have failure rates anyway, even with the best defined trade entry criteria. The impatient trader however, makes things much worse because they are focused on the moment, and usually on one time frame alone. Forex signals can be improved to a satisfactory degree, by being reminded that indicators do not work 100% of the time. Traders can use popular indicators in interrupted rather than continuous mode, and develop trade validating techniques. The basic idea around this is that a single indicator is not reliable enough on its own. But equally so, too many indicators will never agree, and it is actually a minority, not the majority of indicators which will predict the trend right. So it all comes down to finding the right balance, and using more than one indicators but not too many either.

Forex Trading Signals
Short term forex traders can use Value Area theory to eliminate many false signals and losing trades over the next 24 hours. There’s no magic formula, each currency pair requires looking back at previous 24 hour periods, and figuring out what portion of the trading volume best defines a meaningful corresponding price zone. Then you can use that price zone as support & resistance over the next 24 hours. Sometimes this Value Area can be quite wide. In the above 30 minute EURUSD example chart, the market does indeed keep on declining once below the VA, then reverses at a previous low and rallies back into the VA again. VA is where buyers and sellers agree most.

Forex Trading Signals Beyond Just Market Price

They say the market is always right, but is it really? Market price is strongly influenced by volatility. So much so that it can diverge away from fundamental trends and forces. So much that it becomes very misleading. The market therefore is not always right. The market is right when there is strong agreement between buyers and sellers, and high trading volume occurs. That is why traders pay so much attention to the daily closing price of the stock market, as well as specific time zones in the forex market. Because that’s when most trading volume occurs, and the market is most right at those times. Forex trading signals become much more reliable when these price levels of mutual cooperation between buyers and sellers are identified. Apart from the closing price, these levels are also found around the times where most trading volume took place, and sometimes traders refer to this as the Value Area. In the short term, regardless of the fundamentals, a forex rate will react to the LSS pivots for the day (defined by the previous day’s close). It will also react to the day’s value area (defined by the previous 24 hours volume distribution. The price zone which the rate was trading in, during the highest volume defines the Value Area, and will act as key support and resistance for the next 24 hours. In a nutshell, if a signal calls for a long trade, and price happens to be below the Value Area, then the probabilities are against this trade. In order for the long trade in question to have a better chance of making a profit, market price should be above the Value Area. To this day, no exact formula exists for this Value Area, each trader has their own. But it’s all about figuring out the best practical price zone around the last 24 hours, where most trading volume occurred.

Forex Trading Calculator Tools You Don’t Need

Most forex trading calculator tools are useful, but there are some which have been made available by popular demand. Deep down though, they are simply useless.

Forex Trading Calculator Tools You Can Do without

Most forex trading calculator tools, such as trade size and stop loss calculators are very useful, and so are LSS pivot point calculators. There are however some forex trading calculator tools, such as Elliot wave theory and Fibonacci tools, which are embedded in trading platforms and charting software, simply due to popular demand. Using an Elliot wave theory forex calculator and price projector, is totally useless and misleading. The theory is totally false and unproven. The same goes for Fibonacci theory as well. These theories were once believed to work, based on the idea that too many traders would act the same way, upon seeing the same signals. Real tests however have shown that not all theories really work. Many of them simply don’t work because not many traders act on them. LSS pivot theory is debatable, it does work very often and it often works at critical price levels. But even LSS pivot theory cannot be totally dependable, since there is always some element of ambiguity. Any theory based on support and resistance seems to be working perfectly, because no matter what market price does, the theory seems to match the trading action. LSS pivot theory however does provide warning signals, and that alone can be used to adjust stop loss size accordingly. Which is very useful. Forex charts are very confusing and ambiguous at all times, it is natural. However, Fibonacci and Elliot wave theory are among the two biggest losers, because they are more myth that fact. Some new traders spend many hours of their research time, analyzing markets using these false theories. Time that would much more productive had they been using other theories, such as swing trading theory or time zone analysis.

Forex Trading Calculator
Fibonacci theory is totally false when it comes to trading (along with Elliott wave theory). Fibonacci pivot levels are useless because they create an illussion of actual support and resistance, but those are all all over the place.  The illusion is that no matter what market price does, it always seems to match the theory. What good is that?  LSS pivot theory on other hand is more down to earth, and uses yesterday’s market price in its calculations. The daily market close in particular, which carries a lot of weight, is an entire single variable in LSS pivot theory.

Why Proponents of those False Forex Trading Calculator Tools still Believe in them

These forex trading calculator tools rely on Fibonacci and Elliottt wave theory. Theories which if one has enough wishful thinking and confirmation bias, will surely find some market charts perfectly matching their concepts. But that is not real, unbiased research. Moreover these false theories have been mythologized by all kinds of traders, even by profitable traders. So, new traders do not dare question the opinions of profitable traders. Believe it or not, no matter how profitable a trader, user of these theories and calculators, might be, they are only fooling themselves. The most logical explanation is that they use these false theories alongside some solid theories, which ultimately kept their trading profitable. Forex exchange rates and their trend are hard to figure out. The list of false theories in trading, goes on and on, and it includes some other supposedly good trading theories also. These supposedly good ones, are theories such as contrarian indicators and the COT report. These theories use real data, they are right some of the time, but their accuracy in predicting market turning points, is very poor. Perhaps as good as a tossing a coin. There is some predictive power in contrarian indicators, and even though the theory is not used in calculator tools, it is used in graph form. These graphs do accurately confirm existing trends, much better than classic market price moving averages. They are not however leading indicators. Because many times, the crowd can actually be right, and the minority will be wrong. But as the new trend develops in the market, after the reversal, the majority of new traders are not willing to take a loss on their losing trades. And so the contrarian indicators do very accurately show that the market will continue to move in the direction of the few for a while.

Best Trading Online Strategies for Beginners

New traders look for the simplest things first. Some trading online strategies are simple, yet profitable enough to justify their use. Complexity can wait.

Looking into Some Simple Trading Online Strategies

Trading online strategies for new traders must be simple, because complexity and too much data lead to confusion. Confusion leads to trading signal ambiguity and finally to many many losing trades and failure. Forex strategies for example need to be simple when beginner traders use them. Unfortunately, the entire forex industry is filled with confusing indicators, sometimes useless indicators and too much incentive for day trading. Trading online strategies can be made much simpler, in order to begin trading. Some CFD brokers differ, in that they want to keep their clients for a long time. And so they reveal the ugly facts about risk, and day trading risk to their clients. Some don’t know what is CFD trading and how it can benefit them. But it is worth looking into it. Online CFD trading is a popular method among all types of traders and even investors. Even seasoned traders now use CFD at some stage of their trading. The simplicity and versatility of CFDs match those simple strategies beginners should use. As for the strategies themselves, they can be based on swing trading theory, pivot theory, and momentum indicators. There is no need for using all the popular indicators, an certainly not need for news trading. Which is so difficult that beginners will almost certainly fail at it.

Trading Online Strategies
Traders determined to win, should realize that a lot of concepts and tips out there are actually wrong. Using tight stops is one such bad tip, it is set in place to make you feel good, not really win in trading. Winning traders break each and every rule there is in trading.

Trading Online Strategies for Bold Beginners

Generally, if you are beginner, the advice is not to try day trading. But if you want to try anyway there are trading online strategies for that, of somewhat manageable complexity. But at they same time a lot of focus is required. Day traders pay a lot of attention to the 30 minute chart, regardless if they trade on the 5 minute chart. They use primary and secondary LSS pivots for the day in question. And some also use the Value Area relevant for the day. All that news and economic reports do, is make market price move between these levels. It is impossible to figure out the impact of the news on the market in advance. All popular tools and methods tend not to work so well. The LSS pivot theory is popular, but it allows the day trader to think originally. There is effort required on the part of the trader, and still there is no free lunch. Methods promising surefire trades are usually false and fail miserably. These are the concepts used in day trading strategies. There is no need for much else. You can use CFDs in your day trading too, more effectively than Futures or the spot market. Just remember to have an entire second strategy around stop placement, and avoid using tight stops. Bad stop placement can sabotage a winning strategy. And all mentors and many books on trading tend to advise traders to use tight stops, which is really wrong. Tight stops never worked, and never will. Nobody made money in the markets while being afraid to take a loss. And finally remember that all trades start out as losing trades, fear is not part of any winning strategy.

Developing a Dependable Forex Trading System

A good forex trading system is one that the trader feels comfortable using. So that they are psychologically resilient. Beyond that it’s about numbers.

Public Opinion Cannot Define a Good Forex Trading System

A good forex trading system is usually developed around radical new ideas, ideas that the public will surely oppose and ridicule. Which is why developers of such systems do not reveal much of their ideas and beliefs. The forex market in particular offers a really wide range of possibilities for developing a radical trading system, more so than in stocks. A good forex trading system may for example be based around time zones and transitional hours between these times zones around the 24 hour global currency market. Even though many traders know about this, they don’t feel comfortable trading outside their own comfort time zone. Rather, the public always tries to make a 9 to 5 job out of their trading. And these are the people who use their trading activity, as an identity when their friends ask them what they do for a living. Wise traders keep quite about their trading, and they know it might take years to achieve their objectives. Even when profitable, some traders still keep quiet and use other activities to hide their trading. Public opinion is very wrong, most of the time, about everything, including the financial markets of course. Wise traders develop their trading systems quietly, without feeling obliged to present a final result to anyone, and they know they can also fail without any embarrassment. That’s why most good traders are reclusive people, working in isolation. People who really believe that trading can be far superior to any 9 to 5 job. In fact, many of them have been fired from such jobs and feel animosity towards the established job market. Because a 9 to 5 job will pay according to supply and demand rules and luck, and it also robs the employee from much creativity. Whereas the financial markets are the best employer, because only the best get paid.

Developing a Dependable Forex Trading System
Wise traders usually look for indicators, classic and newer ones, which seem reliable on the daily chart. None of them is perfect, and they all give conflicting signals as one zooms in and out of the daily chart. The daily chart is however by far the key time frame. For evaluating any indicator and how it is to be used.

A Dependable Forex Trading System

Traders need a dependable forex trading system, and one that offers account safety. So that they can lose 90% of their money at rough trading times, and still manage to recover all the way up, from that remaining 10% trading balance. That’s what a dependable trading system is. To achieve this, they also need to find the best forex trading platform around, and those wise enough actually do. In fact, many good CFD trading platforms offer so much, that any farsighted forex trader can use to propel their trading far ahead. The confidence gained through trading experience is priceless, for all truly devoted traders. It is proof that their ideas actually work, and that markets are not totally random to them. Indicators such as CCI, RSI, flags, and LSS pivots, though known to the public, allow for so much creative use. Wise traders take such classic indicators and use them in order of importance, and in very creative ways. Other traders go beyond these, and use fundamental analysis, specifically tailored to the short term trend. Fundamentals by nature are a bunch of ambiguous data, and are highly complex. But once in a while a good trade appears through those. Good traders trade with more money when the signal used is a result of fundamental analysis.