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The Benefits of Trading Online Practice

The benefits trading online practice offers are priceless. As traders learn to handle risky and stressful situations in the markets. Practice does make perfect.

Trading Online Practice through Small Live Account

A small size live account can facilitate all tasks for trading online practice, including the psychological aspect, for those fearing to trade with real money (full trade size, right away). Losses are experienced and are received in all kinds of ways. And winnings are always welcome at first. As traders overcome their fears, they tend to look more into losing trades and learn more from them. Whereas winning trades are viewed as an ego boosting trap, and are seen as dangerous. But every trade really matters. And while statistic is good, wise traders tend to go beyond statistics and into the uniqueness of each trade. Treating each trade as a long term investment so to speak. That’s how practice becomes really beneficial and improves your trading. Demo account trading is also used. Especially in more complicated strategies where many variables have to be taken into account. Demo account trading is also ideal for testing out money management systems and how to adjust your trade size as your account size changes. A demo account at $20,000 can be used to fully and properly test money management systems. Many mistakes and pointless risks can be identified through trading online practice. Online trading becomes more realistic through practice, as traders gain confidence. And no mater how much critics disparage small size live account and demo account trading, confidence is really far more important than knowledge. As many people can be good learners, but only few dare to take action and make use of this knowledge. Forex trading is particularly good for practicing purposes, in all aspects. As any task which requires trading or investing in foreign currency either directly, or through CFDs, is a task of thought. All transactions are viewed as if they were long term investments. And every one of them is unique. Given the wide range of choice in the forex market, one never runs out of ideas, on any day or week.

Trading Online Practice Does More with Less

Trading online practice is criticized by large size traders, who simply failed to be successful in their own large size live trading. Or it simply took them too long to become successful. So it is natural for them to deny the possibility, that demo or small size live trading practice, produces profitable traders. They cannot accept their own failures and admit that others are better. It is common for these proud deniers to make a big deal out of their own trading. As if the markets somehow depend on their trading… Wise traders on the other hand are humble, and don’t make a big deal out of anything. And they are certainly open to the fact that someone else out there is better than them. The world of currency trading has proven time and again, that even the largest bankers and top firm traders can be completely wrong. Trading size doesn’t make one more clever than others. Necessity to win does. Practicing traders have the necessity to do more with less. They have nobody to bail them out if they fail. And on the positive side, they have nobody imposing rules as to how they should trade.

Trading Online Software Development

Creating Personal Trading Online Software

Some traders are also coders, or may simply possess the analytical skills needed to code. These people can develop their own trading online software for any market.

Developing a Trading Online Software

Developing a trading online software is about trading skills and analytical skills. If you know how to code, you can do it yourself. Else, you will have to produce the well defined algorithm and give it to a programmer to make the final software. Programmers themselves are not experts in many fields, and probably not in the markets. But if you work closely with them, the final software may be developed perfectly. The software itself is usually used as a trade-aiding tool, one which produces signals or confirms your own signals. Trading online is a manual process, but automation can deal with a variety of routine tasks, such as: indicator line crossovers, moving averages, and even leading-lagging analysis. For a good trading online software to be developed you will have to go beyond what you learned in some forex trading course and into numerical analysis, spreadsheets and manual simulation through a spreadsheet. Because great insights can be gained this way. Currency pairs can be measured through various metrics, such as volatility and LSS pivots. Your software can produce the final numbers in no time. But the rest of trading work has to be manual. And even more manual if fundamental analysis is used, which cannot be simulated at all. All your software will do is provide a period of time, or warning signal where an actual trade signal is likely to appear and the market will move. If your manual trading produces a signal and there’s no corresponding warning signal from your software, it calls for caution and more checks. Automation can remove the routine part in your analysis, and save you a great deal of time. Because total lack of automation can also lead to wrong assumptions and mistakes. Accurate measurement of metric parameters is important, and that’s what automation provides.

Trading Online Software Myths

There are trading online software myths on Expert Advisor software products. These myths are to the effect that profitable trading can be automated 100% and human emotions are removed etc. Yes, human emotions can be bad and cause large losing trades. But they are also good because that’s how the best trades are made. Things like deceptive trading action, false breakouts and more, are almost impossible for any software to deal with. Software is used by top trading firms, but only on routine tasks. Software cannot be used at the forefront of trading. Just like it cannot be used to fly jet fighters into dogfights. All it does is provide the pilot with advance warnings, and in some aircraft it may fly the plane lower, if it senses that the pilot may have passed out. But there’s no way for software to engage the enemy all on its own. It’s the same with trading. Hence the marketing on Expert Advisors is very misleading. And that’s why the forex market, which is mostly manually traded, deceives and beats all Expert Advisors. Because software cannot sense and avoid the natural traps of the foreign exchange currency markets.

Trading Online Best Performance

Trading online best performing traders are amazing. People tend to believe that no such traders possibly exist, until they get to see one in real market action.

Trading Online Best Performing Directional Traders and Hedgers

Trading online best performing directional traders and hedgers carry out different tasks. Traders take a strictly directional view on the market, and if wrong, they get out. They have set conditions for entering a trade. And when these conditions are no longer valid, the trade is seen as a loser, right away, and it is closed. Hedgers on the other hand have a more flexible trading plan. They may see a bad trade, as either a developing big loser, or as a short lived loser. Especially in trading forex, hedgers are looking to predict how far the losing trade will go, and whether it makes sense to hedge it. When they have no time to think, and markets look confusing, all losing trades are hedged immediately. Thereby giving them much more pressure-free time, to make a decision. Both directional and hedging trading concepts are useful. Though traders tend to eventually settle down with one strategy. The bottom line is that may losing trades can be avoided in both directional trading (through fast condition validation). And in hedging kind of trading, through taking a trade in the opposite direction. Both of these trading philosophies deal with market uncertainty, and prepare the trader for failure. For failure where there may be disappointment as the original, imaginary trade didn’t work out as planed. But this failure stops at emotional losses, and actual fund loss is limited to a minimum or even totally eliminated. All those trading online best performing directional traders and hedgers know that it is more important not to lose, than to win. They accept to be wrong on their opinion, avoid losses, then plan another trade. Hedging trade ideas can be nicely implemented through a CFD trading account. Where traders can afford to have soft, flexible opinions on the markets. The opposite of this, which is to always maintain a rigid opinion approach doesn’t work in practice. It can only work if the account is very large, and the trader is willing and patient enough to hold onto losing trades for days and days. And only very good opinions based on fundamentals can win over adverse market prices.

Trading Online Best Results

Trading online best possible results by traders whose income depends on trading, are truly astonishing. Though few actually show trading statements, actual trading action seen is amazing. Some medium size commodity traders have seen making $10,000 per week. Week after week after week, without incurring big loses. Surely they do use commodities and the best forex trading platform, so as to trade a commodity they understand well. But also hedge against it through a currency pair. Generally, they tend to have long term, one sided opinions on commodities, and more bi-directional, volatile opinions on currency pairs. The US dollar for example may rally on geopolitical events, or a currency pair may decline for a week, on central bank intervention. But a related commodity will not have any of these counter-trend price moves.

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.