Page 189 – XTrade

Using a Single Forex Trading Indicator

Traders wonder if they can trade currencies successfully, using a single forex trading indicator. Combining different indicators is more tricky than it seems.

The Truth about Using a Single Forex Trading Indicator

Using a single forex trading indicator alone, is often thought as a way to simplify trading. Day traders especially do believe in this concept, since they have to deal with fast changing, live forex rates and forex news stories. These day traders however come prepared into the market, having done a lot of homework based on the daily chart and yesterday’s close. And they do use more than one indicators for that. In day trading, they can resort to a single indicator, it is possible to some extend, though it is not the best way to trade. Using a single forex trading indicator alone, does bring in simplicity and agility. But that indicator would have to be price based. If price is used as an indicator, on its own, some predictability is possible on the market. But when the market is due to give a false signal, or some other confusing pattern, all price based indicators ultimately fail. There goes the old saying that the market is always right. But in fact, it isn’t always right! The market can be wrong, and so using price or price momentum alone, as indicators for trading can be a very big mistake. Price may move in the misleading direction just because of profit taking. Making the market seem moving in that direction, but profit taking is not a real trend. Real trends are based on objectives and targets that carry a lot of weight. That’s where the market want to go, and if it doesn’t go there today or tomorrow, it will still go there before the week is out. So be careful of price and momentum indicators, because they can be way too misleading.

The 10 Day Moving Average as a Single Forex Trading Indicator

The 10 day moving average is an example of a forex trading indicator which can be used more or less, on its own. It is an average (which means price and momentum and misinformation) but it is based on the daily close. The daily close of most markets carries more weight than the high and the low. Because there is more meaningful trading volume during the last trading hour of the daily session. The 10 day moving average does not yield clear forex signals, but it does hint near term direction and momentum. Especially when a new trend has just started, traders can confirm early in the trend the validity of the move. All they have to do is check contrarian indicators, for just one time. And if the move is confirmed. Then they are good to go and trade on the 10 day moving average alone, for several days at least. The idea is to buy the market if price is above this average, it’s that simple. Using too many indicators, and using them all at the same time is too confusing and not recommended. Wise traders use 5 to 7 good indicators, in different ways. And they also expect that all of these indicators will have failures at one point or another. Using a single indicator alone is not a good idea, but if it has to be done, then the 10 day moving average can be used for several days in a row. But only on newly started trends, confirmed once, by some other indicator, such as contrarian indicators confirming reversals.

Forex Trading Investment for Long Term Investors

Long term investors new to currency trading and CFDs, can use forex trading investment strategies for achieving their objectives. The benefits are often unique.

Forex Trading Investment Ideas for Classic Investors

Classic investors rely heavily on quarterly fundamental analysis and on identifying solid trends in the markets. The advent of online CFD trading in recent years facilitates forex trading investment ideas. And also complex strategies, above and beyond the needs of each investor. Forex trading investment concepts are just that, a combination of long term investment and various trading ideas. As a result, the investor can hold onto long term stock or commodity investments, while at the same time hedging risk in the opposite direction, through CFDs. These hedging trades allow the investor to save a lot of money on transaction fees, since they no longer have to liquidate their long term investment. These fees, especially when dealing shares of a stock, are quite significant. The main idea is to hedge day to day and week to week adverse moves in the markets. So that the investor ends up readjusting their entire exposure to the market in question. So that they stand to actually gain more, without taking additional risks. Many of these investors invest in commodity stocks, wither directly, or through their pension funds. These are very long term investments, but the stocks can have down months and even down years. The use of hedging through CFDs allows them to take a brand new approach. And if the stocks perform badly over many years, they will have profited from these hedging CFD trades. This is equivalent to profiting out of their pension or any other investments, much earlier. Since when one side of the investment fails, the other brings in profits.

Forex Trading Investment for Carry Traders

Carry traders are a new type of investors, their strategies are supposed to be far more risky than classic stock and commodity investors. But thanks to CFDs and some mathematical models. They are able to hedge even Carry trade risk through strongly correlated commodities. This is because these commodities move like some currencies do, but unlike currencies there is no interest charge nor credit involved. A good Carry forex trading investment takes into account all these variables, and investors usually confirm the strategy is implementable using a forex calculator. Calculations extend to correlation analysis and other factors. Many trading ideas seem too risky or impossible at first glance, but if one takes probabilities and correlation analysis into account, they could see the facts. Usually, the investors do all the work themselves, as there is no single piece of software doing all this work for them. The global forex converter mechanism allows for arbitrage opportunities, through correlation patterns. Investors have to make some assumptions, but as long as these assumptions are within realistic expectations, the strategy will work.

The Magic of Forex Trading Scalping

Forex trading scalping is seen by many as a boring concept for trading currencies. But this is not so. Trading zones in the forex market provide the answer.

Forex Trading Scalping is All about Avoiding Active Trading Hours

Forex trading scalping is not boring at all. It could be risky, very risky in fact if one trades during the wrong hours. Scalpers are directionless traders who simply want to see market price move up and down for many minutes. The risk is that if market price breaks out in either direction, then 50% of their attempted trades will be losers. And if one trades mechanically on such a breakout, the losing trades will be much bigger than the profitable ones. Scalpers don’t have large profitable trades, even a 6 pip profitable trade is something they will accept. Forex trading scalping is really interesting when one chooses selectively how and when they will trade. Forex trading through scalping is all about avoiding extremely volatile trading hours. Maximum volatility occurs when economic announcements are made. And these economic announcements are made during the active hours in the countries in question. GBPUSD for example, is currency pair which relates to two countries, Britain and USA. Hence all economic announcements are made during the active trading hours in these two countries. If one wants to scalp GBPUSD, they will have to look for the best trading hours within the Asian trading session. That’s when this particular currency pair will be safest to scalp. The currency pair will still move up and down, throughout the Asian trading session. But a large part of this period will be kind of mean-reverting. Where price will be reverting back to a baseline, from both directions. So the scalper simply has to buy dips and sell rallies below and above the perceived baseline respectively. Online trading has evolved in the last 15 years, this hasn’t necessarily made markets less risky to trade. Selective trading however is possible, even in the case of scalping. There is a lot preparation involved, and some days may not even qualify for scalping. But those that do, offer amazing profitability.

Forex Trading Scalping and Day Selection

Forex trading scalping mainly about selecting the right currency pair and corresponding trading time zone. But one can enhance scalping even more by eliminating few days in the trading month. Where market price still breaks out, even in the quiet trading time zone. Scalpers always tend to have a series of many profitable trades, for as long as a straight week, and then a nasty breakout day. On that nasty breakout day they usually give back almost all of the profits made in that week. That’s why trading time zone selection is not enough, unless one trades very carefully and can sense breakouts in the making. Forex scalpers do a lot of preparation on selecting the most suitable days for scalping, the actual trading is much easier to do, since it’s essentially directionless. As far as profitability goes, good scalpers typically make as much as $300 per such good day, even on small accounts, with less than $3,000 available. Good scalpers don’t chase losses, if the scalping session begins with losses and larger than expected price movements, they will quit for that day. Scalping doesn’t work with tight stops, they actually use 50pip or larger stop size. While profits may only be as little as 6 pips and as large as 30 pips on the most frequent trades.

Forex scalping is one of the best ways to experience trading for the first time, as it is about trading the less obvious patterns on the charts. Volatility has to be avoided, as well as surprise breakouts, this is where all the tasks are really hidden. So what is forex scalping in a nutshell? It’s a way to trade probability in the market, in a well defined, counter intuitive way. This is because large stops have to be used, and the objective is to only make few pips in every trade. But scalping can do so much more, for example it is possible to take a trading account that has been blown from $30,000 down to $5,000. Through other strategies, and to make a full recovery back to $30,000 through forex scalping, amazing, but it is very possible! Scalping is all about day selection, and risk control on any trades gone wrong. Beyond that, it can offer $300 profit, on every such day. It is therefore a trading method which many traders could have looked into, instead of just rushing to trade the obvious directional moves on the daily chart. Scalping is all about probability assessment, and this boils down to volatility-causing events, and the risk events (or absence of), during the next trading day.

The Global Forex Trading Currency Converter System

The global forex trading currency converter mechanism impacts all financial markets. It makes no sense to trade commodities without looking at their currencies.

The global forex trading currency converter system is More than You Think

The global forex trading currency converter system is an entire mechanism. An integral part of the rest of the financial markets. Commodities and commodity stocks are only an example of markets which are closely related to some currency pairs. You cannot for example set out to trade gold without paying any attention to AUSUSD, and vice versa. You might think that gold would always be leading over AUDUSD, but the opposite is just as true. Many times the gold chart may appear confusing, and AUDUSD may provide clues as to what is likely to happen next. These correlations are somewhat longer term than the day to day time frame, but the markets involved will always catch up with one another, sooner or later. The global forex trading currency converter system has a huge impact from time to time, on all markets. Because currencies impact so many businesses around the world, through their running costs and profitability. Foreign exchange currency effects are diverse in nature and impact. Traders and investors who ignore the forex converter system as whole, are at disadvantage. Many choose to ignore it because it adds great complexity to their stock or commodity trading. While others simply do some superficial analysis, which involves the key currencies, such as the Euro and the US dollar. All crude oil traders pay attention to the US dollar, more or less, much more than gold traders pay attention to it.

The Impact of the Global Forex Trading Currency Converter System on Physical Investments

The global forex trading currency converter system even impacts physical investments, such as real estate and classic businesses. If the currency of a country falls too much, some multinational companies are no longer able to operate in those countries. This happened with McDonald’s in Iceland, when the country’s currency was greatly devalued. And when stock investors hold such stocks, they are bound to see their holdings absorb the financial damage, the stock in question will go down by a certain amount. In other cases, depending how a given small business, real estate investment or company is positioned in the market, a rising or falling currency in a single large economy will be a good thing. In real estate for example, investors want to invest in a country with a rising currency, while taking out the mortgage itself, in a falling currency. The divergence in the price of the two currencies, over several years can make a huge difference. So that the investor ends up saving 10s of $1000s on their real estate investment. Real estate in particular is a very clever idea, when global currencies and their trend are taken into account. Moreover, real estate investors who also are forex traders use online CFD trading to further enhance their investment. This is because CFDs allow them to affordably hedge against even brief but important currency moves.

Using a Forex Trading App to Trade on the Move

Trading on the move is essential to 1000s of people. Especially to working people accessing the markets while commuting to work, through a forex trading app.

Relying on a Forex Trading App for Mobile Trading

Using a forex trading app is essential not only to part time traders who still commute to a 9 to 5 job daily, but also to seasoned, professional traders. Even these professional traders who have no other income then their trading can bring in, still need mobile access. Because they often place trades in the markets, but need to attend social events, such as weddings or get on board a train for hours. And this might be during active market hours, often critical ones. The user of the forex trading app, can gain access to the markets through a smart phone or tablet computer, which is much easier to carry around than a mini laptop. Some traders can only monitor open trades through the app, and not open new trades. Because they cannot make decisions in a noisy environment away from their office. While others believe that getting away from the office once in a while, will allow them to view markets from a fresh perspective. Working people on the other hand are used to making trading decisions while on the move, and want to make the best of their commuting time. The bottom line is that all these people do find a trading app absolutely essential in their trading. Mobile trading is also essential for trading strategies, where contingent orders need to be adjusted once a day. Even if no in-depth analysis of the markets is required. Currency trading can be improved at any level, through the use of solid strategies and the need for trading online from anywhere. In any case however, the relaxed type of trader, who simply wants to take a look at various currency pairs during the day. Does find that getting out of the office, at times of confusion, helps them find clarity. So mobile trading facilitates this necessity. Some people for example feel most relaxed and clear in their minds when they go fishing. In this case it gets more quiet than the office or the routine trading desk, and better clarity is achieved.

Breaking Routine Life with the Use of a Mobile Forex Trading App

Traders need to break their routine every now and then, by getting out of whatever makes their trading routine. Again, the use of an efficient forex trading app makes it all possible. Online CFD traders are very creative thinkers and problem solvers. This is because CFDs can be used in so many different ways, and with unparalleled efficiency. The good news is that tablet computers of reasonable screen size almost replicate their desktop computers, giving them the opportunity to take a new, non routine look at that confusing chart. Many do so while out in the forest or at the beach, because that’s where all the stress and routine go away. Once a difficult market analysis problem has been dealt with, in the stress-free environment, the trader gets the idea back to the office. Generally, a change of environment does help a great deal in getting out of a mental challenge, one which caused overwhelming confusion.

About Forex Trading International Traders

Traders all over the world have many different objectives. The kind of forex trading international investors and traders pursue every year varies dramatically.

The Kind of Tailored Forex Trading International Clients are After

Every trader has specific needs and goals, probably as unique as their fingerprints. One trader wants low risk and low gains. While another is willing to risk much more in pursuit of bold goals that very few dare to set. The average ambitious young trader, comes from a middle class family and all they want, is to make $100,000 a year. The first profitable year in particular is key to boosting their confidence. This is the average forex trading international ambitious traders want. Whether $100,000 a year is too much or not much at all depends on the risks taken, and initial account balance. Forex trading is tough, there is no question about it, it’s not an effortless winning game. People from low income background and poor countries, are likely to be tested to the limit while trading. Except that these poor people are far more willing to succeed. Especially when compared to those people from well-off families, having millions, and just wanting to make millions more. The family wealth factor does play a big role in shaping new traders. Traders from poor background, in many parts of the world, will do anything to gain an edge in trading. And they are usually under-financed. This is the hard reality forex trading international poor traders face. Rich traders on the other hand do not have tailored methods for trading the markets. They have a lot of money, but no amount of money is match for the forex market. A large trading account can be wiped out just as easily as a tiny account. Trading forex under the impression that money will buy you success, served on a silver platter, simply leads to disastrous failures. It would have been unthinkable just a few years ago, and yet today there are profitable traders in the poorest parts of the world. Often lacking resources and education, but their willingness and wisdom makes up for these obstacles. All these vastly diverse international clients finally meet in the world of online forex trading, and it’s David against Goliath. It is possible even for the most unlikely, poorest trader to perform much better (in percentage gain terms), than the super rich. This is all because people become naive and complacent with wealth.

Profiting from the Mistakes Forex Trading International Rich Traders Make

Profiting out of the mistakes that various forex trading international rich traders make, is not quite accurate. They would make these mistakes anyway, even if no particular group of traders took the other side of the trade. And equally so, poor but good traders would profit anyway, regardless of the careless trading activities of the rich few. In today’s world, CFD trading enables traders, even very poor traders to trade much more affordably. But these poor traders are battle-hardened enough, through extreme trading conditions to know when to use and when not to use high leverage. They know for example, that it makes much more sense to briefly hedge an opening losing trade, rather than use meaningless tight stops. The biggest strength of the small trader is that they are smart enough to figure out when the media is wrong. As a rule of thumb, losing traders of all kinds, including those rich careless traders, tend to rely on 3^rd party opinion. Rather than their own. And their beliefs and expectations are reflected on the market charts. Which all traders internationally share and look at.