The Advantages of Using an Online CFD Simulator

Most losing trades make sense when seen in hindsight. But in fact, you can learn to detect them early, through probability analysis and an online CFD simulator.

An Online CFD Simulator for Evaluating Risk Control Methods

An online CFD simulator allows you to test theories and ideas on risk control. And to explore the hedging power of CFDs. So as to get around the riskiest periods in the markets. The biggest losing trades occur exactly because traders fail to focus enough. They fail to evaluate the uniqueness of each trading day, and the volatility risk. What usually happens is that traders are caught on the wrong side, trying guess market direction. And all this fear and confusion leads to closing the right trade. The right trade could be the one that is actually a losing trade at the time of taking action. That’s why probability analysis through both time and price data, is so important. Because unlike what your instinct tells you to do, the analysis will tell you otherwise. And the analysis will have a much higher probability of being right. To be exact, traders who employ such risk control methods don’t come up with a buy or sell formula. But rather with an algorithm, which has many steps and conditional decisions to go through. In some cases it will tell the trader to close the open trade, regardless of profit/loss. Because the probability of success is diminishing exponentially with the passage of time. In other cases, it will tell the trader to temporarily hedge an open losing trade with an offsetting CFD trade. Because the probability on a longer time frame suggests it’s the right thing to do. And through multi-time-frame probability analysis, it will finally tell the trader how to handle the open trade and the hedging trade. This approach saves the trader a lot of stress, and offers a map to navigate through the confusing markets. This is all tested and improved in an online CFD simulator.

Online CFD Simulator
The key to using probability analysis is understanding that things are not linear. As certain input variables change slightly, some output variables change disproportionately. The goal is to direct trading while the total probability for success is close to 1, and not to trade, or to hedge the open trade when the probability falls below a certain threshhold. The next step is to apply the theory on 3 different time frames, and this will provide guidance on how to handle things better, and what to do next with that temporarily hedged open trade. It is possible to eliminate a huge portion of market risk this way, and therefore to cut losses to amazingly low amounts. Remember that you will have to develop an algorithm, with conditonal decisions, where both time and price data will be used to determine the right decision to take, for handling open trades. So that a losing trade is not defined by just its current P/L figure, but by more data, including the elapsed time since valid criteria entry to the market.

The Market is Not always Right!

The urban legend says that the market is always right, but we don’t care about the latest price momentum. Because that’s what the legend refers to. We care about prevailing probability, and that’s what really matters. And moreover the trend is a function of time. A trader’s trend might be up, while another trader’s perception of trend is down. If you attempt to analyze the markets through probability theory and logic. You need to start simple, by applying your theory to 3 time frames simultaneously. So that you have one shorter and one longer time frame, while looking to start trading on the middle one. CFD trading news based strategies are not advised. As news trading is also a subject of intense debate, due to many myths taught. A CFD trading system works best when the benefits of CFDs are exploited, and when the trading myths are left out.

Testing Simple Concepts through an Online CFD Simulator

An online CFD simulator can be used to test hedging concepts based on multi-time-frame analysis. And concepts of stops in the time domain. Typically, some popular markets tend to have critical pivotal times. Which range from 20-30 minutes to around 3 days, for 5 minute and daily charts respectively. So day traders will consider closing open trades after 20-30 minutes, counting from exact entry conditions. When the entry to the market was made using the right criteria, and the time limit is elapsed, it makes no sense to wait longer. Probability favors closing that open trade and start planning the next one. Far too often you will see that you will be able to close marginally profitable trades before they turn into losing ones. That’s the basis for probability analysis, in a nutshell… But you can take things much further through more data and more advanced probability calculating tools.

10 Things to Know Before Beginning Online CFD Trading

Online CFD trading works better when the trader implements ideas and concepts for better risk control. After all, it’s more important not to lose than to win.

Online CFD Trading Tips

1 – Traders should take online CFD trading more seriously than other kinds of instruments. This is because CFDs do offer far superior trading performance through better liquidity and linear pricing.

2 – Traders should avoid using low risk-reward ratios. The idea of using low risk-reward ratios is about using stops of X size. While expecting to take profit at 2Xor 3X, which probability wise does not make much sense. The probability of making a profitable trade goes up when large risk-reward ratios are used.

3 – Traders who make make a lot of money in the financial markets do break some of the classic trading rules. Total obedience to such rules will prevent you from reaching your true potential.

4 – Online CFD trading offers the opportunity for enhanced temporary hedging of losing trades.

5 – Day trading on daily forex news does not really work

6 – An online CFD simulator does help in evaluating all kinds of trading ideas and strategies, as well as money management systems. It is therefore a very useful tool.

7 – Commodities and stocks are much better to trade through CFDs as opposed to direct access. You instantly have advantages over non CFD traders.

8 – Fibonacci theory doesn’t work in the financial markets. Wise CFD traders have figured this out already and have abandoned this method, along with some other flawed trading methods.

9 – Do pay attention to the US dollar. Markets that are dollar sensitive defy all technical analysis methods and signals. And it happens every time the US dollar moves due to geopolitical concerns.

10 – Take CFD trading seriously. It can facilitate very efficient retail size trading. Which is more than enough to allow a trader to make millions. Don’t be lured by brokers offering tax free, cheaper alternatives such as spread betting, futures, or even options. These instruments suffer from non linear pricing, inherent inefficiencies in fast trading, and very poor filling price.

Online CFD Trading
Despite the apparent complexity, many good traders rely on remarkably simple basic ideas, uppon which they build more and more. The traders such as the one in the picture can trade profitably while using only one screen and few charts. And only when there is no opportunity in that market, for that day, he looks for opportunity on the other charts. The bottom line is that it is really possible for retail traders to become millionaires, as the financial markets are so large in size that $1 million dollars is totally dwarfed by comparison.

Online CFD Trading Wins Hands down over Other Instruments, in Many Ways

Most traders focus too much on leverage and dealing costs. But the real benefit of CFDs is without a doubt superior efficiency. In reality, you don’t need more than 100 to 1 leverage in forex trading. And possibly no more than 200 to 1 in some commodities and highly priced stocks. All CFD trading accounts can facilitate sophisticated trading. And the future is very promising as these CFD brokers will be the first to introduce more sophisticated contingent orders and trading tools. Which means that traders who know their markets well will be able to do much more. Especially on risk control. The CFD trading platforms and the brokers as a whole are supported by superior liquidity-providing technology, which is second only to the more expensive ECN brokers.

Be Wise and Challenge Questionable Tips

Even profitable traders make mistakes when giving out tips. Just because a trade was very profitable and the trader used Fibonacci theory to plan that trade. But it still doesn’t prove the theory right. By learning to challenge and analyze these winning trades you will develop very sharp trading skills. Many books and seminars on trading CFD for dummies will inevitably include some false tips and ideas. You have to question things further, and take only the good part out them. It’s important to analyze your own winning trades in greater depth, to figure out the cause of success. Attributing winning trades to the wrong signal or method, will later lead to losing trades. Especially winning trades tend to be the most deceiving ones, because the trader feels too good about them… Online CFD trading will allow you to lieterally make millions by taking these facts into account.

The Forex Trading Business Opportunity for Starters

Grabbing the forex trading business opportunity is an elusive goal for many traders. As misinformation and poor planing prevent them from consistent profiting.

The Forex Trading Business Opportunity is Too Good to Resist

Forex trading as a business opportunity is indeed a very appealing one. That hardly anyone wants to ignore. The promise of low operating costs, and the potential for good profits, is very good. It is in fact much superior to many other classic business opportunities. This is because the forex market is a global market. Where it is in fact possible to profit, on a global scale. Business models which focus too much on the local economy are inherently limited in what they can offer. This is because wealth, as defined by money, flows one way. More specifically it tends to flow from large geographical areas to small big city areas. And it constantly loses value, due to to inflation. In other words, money is not really indefinitely recycled. It goes around and around several times until its buying power is completely gone. This is why countries must have open borders for global trade. And to make it easier for businesses to import and export over very large geographical areas. So, it’s not possible for a company to really survive, based on the domestic market alone. And moreover it’s not efficient for countries to be cut off from global trade. And to be self-sufficient. Economic theory has proven that best efficiency is achieved when each country is focused on few specific products and exports only. The forex trading business opportunity is a global one. And it is not limited by local boundaries. That is why it is possible for small forex traders to make millions. Whereas a small local business can never make millions. The local market is saturated, there is no volatility, no big opportunities and so on…

Forex Trading Business Opportunity
Money does not really go around and around for ever, as we were told in primary school. In fact, it is slowlly lost  due to inflation, and new money is coming in. Similar to how water goes down through a kitchen sink. Billionaires lose a lot of their money to inflation, in fact on a single million of US dollars, the average daily loss is around $150. That is if you put $1million in your house vault and keep it there, you will be losing $150 per day, out of its buying power. That’s why billionaires want to offest this loss through investing in very low risk currencies. These currencies are the ones that will be the strongest. But when they rise too much, the billionaire investors will want to take their money out, even for a small  profit. And the trend may start to lose momentum. But there’s no guaranty of a profit, even billionares can have huge losing trades in the process. Small forex traders study interest rates and currency trends to figure out likely market direction over the medium term. Just imagine the stress of these billionaires, and don’t always pick the most promising currency, the safest currency that just offsets inflation is usually the winner. But the small CFD trader profits on a much larger scale, out of tiny moves in that currency, because of the leverage used.

How to Grab the Forex Trading Business Opportunity

The forex trading business opportunity is a realistic goal, only when traders know their risks. Traders who want to trade forex online for the first time, and who need training. These traders need to study the global economic problem, and how big currency investors think. The way to avoid poor planning and bad strategies, is through in-depth understanding of global trade and investing. If you rely too much on technical indicators and popular trading methods, you will only scratch the surface. The forex trading business opportunity is peculiar and obscure. No amount training can fully prepare you for the challenges ahead. First, you will have to give up the notion that some billionaire trader out there knows the markets inside out. Because nobody knows the markets this good. All investors, even billionaires stand to lose big money in the forex market, nobody is exempt from market risk! Moreover, because of inflation, all these billionaires are constantly losing money. So they are always looking to put the larger part of their money in low risk, low yielding currencies, just as long as the yield offsets inflation costs.

Don’t Settle for Average Profitability

The forex market is risky, but also profitable. When trading as a business you need to be selective in your trading. Stay out when the markets are tough to beat. And trade with more money when the markets are good. The idea is not to match the profitability of successful traders, but rather to exceed it! So much of profitable traders’ advice will not necessarily be useful to you. Trading is very affordable today, and most CFD forex brokers minimum deposit is no real obstacle to starting trading. You simply need to implement selective trading, use money management, and avoid excessive leverage. The rest of the work is on the trading front. And remember that this is a global business, where market conditions create unsaturated situations, where one can profit easily. But when conditions change back to normal the same strategy will not work again.

Basic Best Forex Trading Strategy Tips for Beginners

The best forex trading strategy new traders can use boils down to personal choice and reality checks. If the strategy requires skills, it’s probably a good one.

The Best Forex Trading Strategy

The best forex trading strategy is one that involves trading either a commodity currency, such as USDCAD. Or a currency pair that is not impacted at all by any commodities and the US dollar. In the case of the latter, traders need to choose carefully. A truly independent currency pair where the risk of the US dollar is removed. As well as commodity market risk. Such a currency pair can be predicted through analysis on the related local economies. Beginners will have a hard time trading any US dollar cross. Even USDCAD is often confusing, but because of its strong correlation to crud oil, it tends to obey technical analysis strongly. Learning how to trade forex through a truly independent currency pair, will offer less confusion. In any case, the pairs to avoid are popular pairs, such as EURUSD. Even though this is the largest pair, by trading volume. The confusion is enormous, and there is no evidence that EURUSD leads over other correlated markets. EURUSD can be a follower pair just as easily as many other markets. The truth is, most popular currency pairs are difficult and too confusing to trade.

Beginners are Impatient

Beginner traders are usually impatient and want to reach success overnight. They want o literally trade for a living very soon. Thinking that they are smarter than everyone else out there. And yet, at the same time they do use trading tips which are at least partially wrong. Classic trading rules and tips are for the most part not relevant to actual trading. If they did work half as much as their reputation hints. Then profitable trading would be piece of cake. Beginner traders don’t question the validity of these rules and tips. Because they think that the older generation of traders has figured everything out. Beginners can trade forex online, starting with a simple currency pair, ideally not a popular one. They should rely more on chart price patterns over all other indicators. And partially on longer term fundamentals. The probability of success increases dramatically if also the daily news is ignored altogether. Attempting to make sense of the daily news is impossible. And even those that use it, use it as a volatility and momentum indicator. And not as a price direction indicator, as many commentary articles will have you believe. These articles have to make a big deal out of the daily news. But news itself is as good as useless for determining market direction. You cannot expect to develop the best forex trading strategy if you attempt to decipher the daily news. It just won’t work at all, so it’s best to by-pass the daily news. By using it as a simple volatility indicator and nothing more.

Best Forex Trading Strategy
There is no hidden treasure in the daily forex news. The industry pushes traders towards high frequency trading, and wants to make a big deal out of the daily news. Which makes beginner traders far more likely to lose. If they focus on more relaxed trading instead, they will have a far better chance of making it through to good and lasting profitable trading. News is only a volatility indicator. Beginners can trade selectively, and still risk up to 30% of their account in any good trading week. And they will have a much better chance of developing the best strategy. That’s where the treasure is really hidden. High frequency trading is okay at later stages, but still it should be done without looking for direction clues in the daily news. The safest way for high frequency trading is scalping, during very low volatility hours.

Best Forex Trading Strategy for Small Account Traders

Small account traders can implement trading strategies on the above tips. It is a good idea to have sufficient funds in their accounts and risk up to 25% or 30% of their balance in any active trading week. Risking less than that over any good trading week, will result in limited market exposure and low profitability. It’s best to use up to 30% in all active trading weeks. And just be more selective, and not trade at all during weeks where volatility doesn’t favor your strategy. Some strategies require high volatility, and some others require very low volatility. In all cases, a good CFD trading account can facilitate forex trading, allowing you to capture even minor market moves. And to even implement scalping trading. All these tips can make up the best forex trading strategy, for all beginners.

How to Change Your Online Forex Trading Strategy to a Winning One

Struggling traders persist on the same trading plan, in an effort to win back losses. But success becomes elusive through short-sighted online forex trading.

Online Forex Trading is Not a Routine Day Job

Most people have learned to be persistent through their former day jobs, where the more you work the more money you stand to make. And persistence is good, no doubt about it. But you should persist on the goals, not on the means, and the trading methods used. Online forex trading can become very successful when one has loose goals, and is persistent enough to reach these goals. The goals may change slightly, but the one thing that can change dramatically is the actual trading plan. Traders who persist on the same trading plan, especially one that has rigid, strict rules, end up losing all their money. There are strategies and methods that are more flexible, and are adjust to changing market conditions. And these are usually much more effective than the rigid approach. Above all, it’s market volatility. This keeps on changing deceptively all the time, from month to month. It just gives you a short period of deceptive success, only to prove your strategy wrong the next month. Traders need to focus on the big picture on the markets, and use flexible trading plans. In fact, the tighter a trading plan is, the more likely you are to encounter something out of the ordinary, and you will be powerless. Because you will not be used to thinking outside the box. All successful traders are free to think, and to even break classic trading rules when necessary. Even the best forex trading strategy in the world has not figured everything out in advance, and it allows for free action.

The Harsh Reality of Online Forex Trading and Misleading Beliefs

Traders are bombarded daily by all kinds of news, opinions and tips. Which at the end of the day amount to useless information. And the over-disciplined trader is at a huge disadvantage because they lack the initiative to think fast and not do things by the book. Online forex trading can very successful by breaking some of the classic rules, but while doing so within the right mindset. For example, you might think that emotional trading is bad. That is not really true. Seasoned traders do have emotions about the market, it’s just that they don’t get excited about fast moving markets. At least not when they don’t understand what’s driving all that momentum. If emotions are based on solid analysis methods, the markets will not easily fool you. Wise traders are emotional traders, because they feel the markets, and that’s what it takes to identify the uniqueness of each trading day. One has to be sensitive and emotional to figure out the real hidden forces driving the markets. Moreover, it is becoming more and more apparent that the so called disciplined, emotionless trader doesn’t really exist… Or at least they are not an impressively profitable trader. Look all around you, at all the successful people, lawyers, businessmen, scientists, they all had moments of Eureka in their careers. And they were obsessed with whatever they were doing. Well, obsession can be good in such cases and it leads to big success. And it is the product of a sensitive emotional mind. Therefore, deep down, to be a really profitable trader, you actually have to be a wise, emotional, obsessed trader, persisting on the goals.

Online Forex Trading
There is something about creative, really successful people, in all professions. First, their offices are cluttered almost as if there has been a break-in, which means they are not so disciplined. And they are also obsessed with their work, which means they are emotional about it, in a good way. That’s something to consider when it comes to serious forex trading.

The Fine Line between Being Sensitive and Over-Analyzing Markets

Profitable online forex trading comes from knowing how to be emotional and sensitive, in the right way. This will become apparent through your trading results, very soon. But it will still take you years of trading experience to make millions in the forex market. That’s just the way it is. But it will take you fewer years to get there, if you break classic trading rules and not do what everyone else is doing. Set goals, and try your bests to reach these goals. Loosen up the requirements on discipline, emotions and so called risk-reward ratios. And take trading one day at a time, while also looking at a longer time frame, as if you were an investor. You can trade forex online and really make serious money, through your own unique approach. Foreign exchange currency trading online for beginners will often mislead you into believing too much in discipline and emotions-free trading, as well as other concepts. Which have not been proven to constitute really profitable trading strategies.