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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.

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.

Practicing on a Forex Trading Demo Account

Starting with Forex Trading Demo Account

Practicing on a forex trading demo account can be a very useful and insightful experience. Despite what critics say, demo trading is valuable to wise traders.

Practicing on a forex trading demo account and testing new ideas

Critics of virtual trading argue that using a forex trading demo account robs traders from gaining real psychological experience. Their argument is almost right, except that it fails to address cases where the trader puts new ideas to the test. And uses numbers and in-depth analysis to evaluate their performance. Just like all aspects where simulation is used, such as for the task of training pilots, simulated trading can dramatically improve a trader’s skills. After all, even if one trades with real money, if the account used is of too small size, and the trades microscopically small, it still doesn’t cause the trader any stress. Currency trading is very popular among new traders, and many of them do start out on a forex trading demo account. It helps them shape their strategy much faster, identify shortcomings in their methodology, and just like small size live accounts, it causes little or no stress. Hence the trader doesn’t waste time contemplating open losing trades as far as money is concerned. They are however still, easily disappointed by failure, because every losing trade challenges their skills. Trading is not all about money, but also about vindicating one’s efforts and intelligence as well. Foreign currency trading is open to all. And those who are serious and determined enough will go all the way, from simulated trading through to large size live trading, through clever decisions and paths. Trading is an ongoing test, where one’s skills are tested to the maximum. Any tool which helps get things right, is a nice tool to have, and critics fail to see the big picture. Critics also fail to see that the same psychology gap that exists between demo accounts and live under $1,000 accounts. Also exists between $1,000 and $20,000 accounts. Since to many people $20,000 is a lot of money, and could potentially put them at big stress.

What Forex Trading Demo Account to Use

Any forex trading demo account that meets basic requirements will do just fine. Some traders however prefer online CFD trading to spot forex trading, due to the unique benefits of CFDs. In that case, a CFD demo account must be used, so that traders see how CFDs work, and how they can handle trades, contingent orders and margins. Also for very advanced trading ideas, such as hedged Carry trades, where both currencies and commodities may be used, demo trading can be used very accurately. And of course CFD demo trading can test the whole idea in one account. Demo trading can help spot all the big mistakes the trader is likely to make, all top brokers offer demo accounts exactly for this purpose. Especially for relaxed kind of trading strategies, where liquidity is perfect. That’s where demo trading can simulate a strategy 100% perfectly. On the day-trading and fast trading side, things can differ, but not to a significant extend. If the strategy makes money on the demo account, then it will very likely also work on a live account. It’s all down to psychology and avoiding developing confirmation bias. But the idea of demo trading is a very good one.

Are Forex Trading Bonuses Worth the Effort?

Forex trading bonuses are a tempting proposal for many under-financed traders. As they stand a fair chance of winning those, even with a small or demo account.

Taking Part in Competitions for the Purpose of Winning Forex Trading Bonuses

Under-financed traders look around for trading competitions where winning is usually based on percentage performance and not absolute profit figures. Traders can stand a chance to win those forex trading bonuses using their small, or sometimes even demo trading accounts. Forex trading bonuses are offered on competitions held by online trading communities or brokers. Usually the prizes come with strings attached, but for many traders it is worth the effort, as there is little to lose (mostly the time devoted), and some significant prizes to be won. Foreign currency trading is just as exciting when one trades in a competition, as it is at any other time where the spirit of competition is in place. Participants are trying to use all kinds of methods to win those competitions, but unless one really knows how to trade exceptionally efficiently, it might be impossible to win. Typically speaking, the average competition winner trades the ups and down of a forex exchange rate on a 10 minute chart, So that even though price moves by say only 70 pips for the day, the smaller intraday fluctuations may add up to as many as 300 pips. That’s how some competition participants end up making extremely high returns over a period of a week or month. The paradox that arises here is, if they are so good traders, then how come they are taking part in a competition. And could they really emulate the same performance in a large size live account? The answer is, probably not, trading like this even on a medium size live account, would make them a handsome monthly profit, far above that of the average job. So the most likely explanation is that traders who win these competitions by achieving ridiculously high returns on their accounts, are using Expert Advisors. Expert Advisor software typically fails sooner or later, it migt be weeks or months, but it does fail after a while or at least fails to make any significant profits. A good, new Expert Advisor however can run for the first month or two, producing such results. And hence it can win at a trading competition.

Winning Forex Trading Bonuses is Not What Serious Traders are After

Serious wise traders know that pressure to win forex trading bonuses will distort their genuine efforts towards long term stable profitability. Profitability which far exceeds any kind of bonus. At the same time they are against Expert Advisors, or at least fully automated trading and fully automated signal generation. The most they will consider is an Expert Advisor which does some of the routine component of their analysis. Automation will never be a match for serious traders. The FX exchange mechanism simply cannot be modeled in software. And even if it was possible the software would be so enormously complex that it would take decades to develop. It is a fact however, that automated or semi-automated trading can work fine for 4 straight weeks, non stop, beat manual traders and win at those competitions.

Reading Forex Trading Charts

Studying forex trading charts for detecting entry and exit points. It’s a task possible in many different ways, and on various time frames. Though a tough one!

Making the Studying of Forex Trading Charts Easier to Handle

Studying forex trading charts for the purpose of detecting good forex signals is quite an overwhelming task. Because different markets and different time frames of the same market never seem to agree. Forex trading charts are ambiguous, and confusing. There is no doubt that many traders lose on many of their trades because of this confusion and chaos. But studies have shown that that’s the way forex charts work, and things couldn’t be otherwise. Because of the difference of opinion which actually makes the markets work. As well as the different objectives even among buyers, or among sellers, markets trade in confusing ways. Moreover indicators used on these charts are just as confusing, and seem to confirm any possible scenario. The good news however is that markets are not totally random, and good signals can be possible to figure out. For one it is possible to use classic chart analysis and indicators in interrupted mode, rather than continuous mode. This means every trading theory and indicator is bound to work say 50% of the time, and fail during the other 50%. By careful crosschecking it is possible to detect what phase the theory or indicator is in, and act accordingly. It is difficult to use an indicator with great faith for one week. And then the next week to have to ignore or fade its signals. But that’s the way all indicators and theories work. And it is what keeps them working during the good 50% cycle. Even if an indicator could start working 100% of the time, it would make the market one sided, saturated, and impossible to trade, hence there would be no market anymore. If there is a market which is possible to trade, it is exactly because no indicator can beat it 100% of the time.

Daily Forex Trading Charts

Daily forex trading charts are the key to evaluating all theories and indicators, even for the purpose of day-trading. And also for trading on forex news. This is because the daily chart captures entire time zones around the global currency market, the high volume times, and the closing times which are very important. Weaknesses in theories and indicators can slip through your evaluation if all you are using is 10 minute or 1 hour charts. An indicator can work perfectly well throughout such charts, and for a long time. But on the daily chart, you can see how the market reacted to factors such as volume and LSS pivots. This is data specific to the day in question. LSS pivots can also be weekly or monthly based, and relevant to a single day’s trading. The daily chart is important in any kind of test or evaluation process. All other time frames fail to address inherent key weaknesses and so they go on unnoticed. The daily chart provides more clarity and carries the most weight out of all time frames.

XFR Financial Ltd – Service-Oriented Technology Helping CFD Traders

XFR Financial Ltd., the parent company of XTrade, is an established dynamic financial holding company within the XTrade Group. The Group’s principal activity is as a platform for the provision of Contracts for Difference (CFDs), offering renowned trading opportunities on forex, commodities, indices and shares. The cloud-based framework is powered by a global server network capable of providing liquid trading whenever the corresponding principal markets are active.

Based in Limassol, Cyprus, XFR Financial Ltd is registered with the Cyprus Securities and Exchange Commission (CySEC), as a a licensed investment firm compliant with Markets in Financial Instruments Directive (MiFID) and duly authorized to offer CFDs, under the license no. 108|10, ensuring each client a secure and regulated trading environment. The Group has an Italian representation, which is registered by CONSOB (Commissione Nazionale Per Le Societa’ e La Borsa) reg. n. 0096369/13 inscription n. 00012, dated 13/12/2013,and created according to Law D.LGS. N. 58/98.

Why XFR Financial Ltd?

The XTrade management team consists of seasoned market professionals, with decades of on-hands experience within the brokerage industry and other financial service sectors. From this collective business and commercial knowledge has come the awareness that servicing the CFD trading community requires superior customer service, flawless trade execution and an innovative approach to market-making. The XTrade cloud-based distributed framework ensures timely uninterrupted and seamless service and order execution.

XFR Financial Ltd. is growing rapidly as a CFDs provider with a growing international presence: Offices present in five continents along with customers in more than 140 nations.

XTrade’s online CFD trading platform offers responsiveness and security to trade anywhere and anytime on all major platforms and devices. Available financial instruments include thousands of the major exchange-traded assets in the US, UK, Europe and Asia markets. Additional tools give XFR Financial Ltd. clients the entire toolset of market data to assist them in achieving optimal trading results.

New trading platform features this year include:

Demo mode account
- Actual market conditions – complete and total real-world simulation.
- Unlimited time.
- Risk-free – enabling exploration of all the XTrade features without expense or commitment.
- Facilitates simulation of trading strategies.
- Online help and support team backup.
New On-site Education Center
At XTrade customers can effortlessly improve their trading skill set with courses, video tutorials, market letters and e-books, while enhancing their trading results with the many available professional trading tools. Continued expansion of this offering is expected. Educating traders as to the available risk management and tools is a central element in the Group’s activities.
Autochartist Market Forecast
XTraders now have access to Autochartists Market Forecast, including its advanced technical analysis. The generated real-time auto-adjusting trading strategies dynamic recommendations are based on immediate pattern recognition and supply traders with an optimal trading tool.
Automatic Deposit
XTrade now features a one-click deposit for credit-card-enabled accounts. In mid-trade, investors can now supplement their available equity, initiating positions with confidence and security.

Dealing with the Problems of Forex Trading Live Online

Forex trading live online tends to be very fast, and emotional. Especially because of the media and the price action seemingly confirming the media’s opinion.

Forex Trading Live Online and Potential Risks

Forex trading live online poses some risks related to emotional high frequency trading. Especially on news and economic report release days. Where new traders are likely to get very confused and disoriented. Trading online at fast pace, is bound to be stressful. And when traders become stressed, they begin to lose judgemental ability, and fall victims to volatility. The idea of forex trading live online is synonymous with stress, big profitability and motivational trading activity. But that is not necessarily so. Markets can become excessively confusing, more confusing than even veteran traders can handle. It is as though markets conspire against you, in an effort to intimidate you. And make you lose and run away for ever, so as to never trade again. Intimidation is there for sure, and this is a risk that even profitable traders face every day. So to deal with this risk of becoming intimidated, you should refrain from using the media as a way to confirm market opinion, and as if trying to figure out the official point of view. The markets are bound to be volatile on news and economic report days, and interpretation of these news and reports is almost impossible. So you should approach the markets with a neutral, directionless mindset, where you simply want to trade based on volatility and short-lived breakouts. Forex trading never worked using the media and public opinion, and never will. What does work, is original thinking, a directionless approach, and volatility trading. That is the case as far as news and report days go. If one trades the longer term trend, then they will have to use a directional trading method, where the trend can be figured out in advance. And that trend cannot really change over a single trading session.

Forex Trading Live and Fast while Having to Deal with Open Losing Trades

Forex trading live and fast poses all these risks of emotional decision making. But most of what you will read on day trading is actually not implementable in practice. Most mentors teach about using tight stops, and controlling risk and emotions this way. This is all nonsense, in fact day traders are better off using larger stops, as well as opposite hedging trades in day trading. This way many losing trades can be avoided by the time the market closes. All the trader needs to watch is volatility, if the market is bound to be volatile, large stops and hedging, is the way to go. If volatility is expected to be low, the trader is better off not trading the early session at all, and waiting on the sidelines. Successful day traders who implement online CFD trading, focus on volatility first. They use the trading calendar as their volatility forecast, and depending on the day, they use one strategy or another. There’s no one size fits all solution to day trading. Each day will fit the profile of a volatile, or non volatile day, and will be either a trending or a flat day. Risk can be controlled using these simple tips, and many pitfalls can be avoided. In summary, it’s all about knowing volatility in advance, using large stops and hedging trades on volatile days, and avoiding the early trading session on less certain days.