Page 292 – XTrade

Why Forex Trading Online Rules the Markets

Forex trading online has an enormous impact on many other markets, including the commodities and equities markets. Forex is relevant to traders in all markets.

Forex Trading Online Helps Traders and Investors

The advent and spread of forex trading online has helped traders and old school investors of all kinds. It has made them look at the financial markets from a new perspective, and pay more attention to currency movements. Movements which prior to forex trading online were much less technical. Currency trading has become much more technically driven, all because too many traders share and look at the same charts. They are all trading forex and pay attention to the same support and resistance levels. And a as result, many currency pairs have a strong degree of technical predictability, around 70% of the time. Exceptions still apply of course, since during the other 30% of the time technical analysis fails, lags, or gives way to fundamentals. Especially when it comes to the US dollar, technical analysis fails much more often than it does with other currencies. But even in the case of the US dollar, online traders are quick to follow on the action of large institutional traders, thereby creating momentum. Collective trading activity can be seen across many currencies, and these almost instantly impact stocks and commodities. The impact varies dramatically from stock to stock, and from one commodity to another, but very often it is there.

Forex Trading Online and Old School Traders

Old schools traders and investors, such as gold investors used to focus too much on key factors impacting the supply and demand in the gold market. But in today’s markets, where forex trading online rules, currencies such as the Australian dollar act in strange and interesting ways. If gold moves in a solid trend, then the Australian dollar will follow suit. But the opposite can happen too. It is possible for the Australian dollar to set a medium term trend, and the lagging gold will actually follow through. These two markets are strongly interconnected. The markets have many more commodities and stocks, where a specific currency pair acts as a key catalyst or even as a driving force at times. Forex traders implement online CFD trading in today’s world, in an effort to trade efficiently both the currency side and the commodity / stock side of the underlying market mechanism. The gold – Australian dollar thing, is actually one unified market. Trading spot forex alone puts traders at disadvantage, trading gold alone, is also a far-sighted approach. But trading both gold and Australian dollar through CFDs allows traders to continuously trade the lagging component, and make consistent profits. All the homework and analysis is focused on figuring out which component is lagging and which is leading.

The Forex Trading Platform Online Traders Prefer

The typical forex trading platform online traders prefer, is always one which offers sophisticated trading tools. All for the purpose of catching more trades.

The Forex Trading Platform Online Traders Prefer is the Perfect Trading Terminal

Traders usually have more than one strategy, and trade more than one market. Though they all develop special skills around one set of markets, or trading hours. Online trading is a must in today’s fast moving financial markets. The forex trading platform online traders choose to use, is one which facilitates all their specialized trading needs. Typically these needs include the ability for placing contingent orders with detailed triggering criteria, and catching opportunities while they are away from their computers. This kind of automation is essential for implementing many forex trading strategies today. The forex trading platform online traders use, has to also provide embedded calculator tools, for performing fast and accurate calculations. This functionality is critical even to swing traders and CFD stock traders, because they can play around with various numerical inputs, and work out insightful and accurate results. The old school handheld calculator cannot match the accuracy and speed of spreadsheet-like embedded calculators, because data is entered in a sequence, and any mistakes are carried through. The good CFD trading platforms especially, offer all this and even more. The wise traders of today’s markets are more like number and chart analysts, rather than simple, passive financial news receivers. Even if one trades on the daily news, without numerical analysis and price targets, they will have no clue where and how the probabilities will dictate the trend on that day.

One Kind of Forex Trading Platform Online Traders Don’t Like

There is one type of forex trading platform online traders don’t like much, and that’s the kind of bad innovation. Any platforms that evolve too fast, without being compatible with previous versions, in terms of user interface, fail to win traders. It is the kind of failed innovation we saw with Windows 8, which is hard for previous version users to become accustom to, if not annoying to use. Such extreme changes in a trading platform are not welcome, as traders are used to a certain layout on their trading platform. And even new traders, who just started to learn forex trading, are not keen on dramatic changes on the trading platforms and in their software. Traders develop trading skills, and in the process of doing so, they become accustomed to pressing certain buttons and seeing certain things, in fixed places on the trading terminal screen. If the trading platform in question appears to be too radical, and too space-age, it does create user compatibility problems. But in reality, not many such platforms exist, all good brokers avoid extreme changes and pay attention to customer comfort. One area of moderate evolution is on forex, and the ability for the trader to see exactly how much money they trade per pip. Instead of using the old format of Lots, which to many new traders may be confusing. This change is good for new traders who don’t understand the pricing of the Pip and Lot size, not a mad step forward, but somewhat unnecessary for most forex traders.

The Evolution of Forex Trading Platforms

Forex Trading Platforms have come a long way since the early days. Just like everything else in the IT industry, it’s all about becoming more user friendly.

Forex Trading Platforms Keep on Evolving

The forex trading platforms of the early days were more like spreadsheets full of numbers, rather than graphically rich trading terminals. Today’s forex trading platforms offer rich graphics. So as to eliminate the possibility of making a mistake or executing the wrong trade. But also, they have a lot of automation, such as contingent orders, a trading tool which didn’t exist in the early days. Trading forex has a lot to do with gaining an advantage of view on the market, over other traders. And even back in the day, wise traders were able to predict turning points in the market, even without even using the best forex trading platform available at the time. Top trading tools were at a premium price, and only investment bankers could afford them. So has the wise trading advantage has been lost in today’s markets, because of too many traders using top platforms? Definitely not! The wise trading advantage of the old timers relies on trading techniques, market analysis, and chart reading at a glance. The advantage is certainly there, because the market itself makes it possible. Despite the fact that 1000s of traders look at the same market charts. Charts that are made out of clear, color graphics. Each one of these 1000s of traders looks at them differently, and not two traders think exactly alike. And a s result, there is a difference of opinion, there are different trading objectives and various time frames of interest. So, the wise trader still maintains an advantage. And despite all improvement and trading tools available on these platforms, profitable trading always depends on some secret, manual process. Such as thinking process, chart analysis and unique fundamental analysis.

Forex Trading Platforms Evolve – Wise Traders still Think Manually

To make the argument that just because forex trading platforms evolve so well. And allow for automated trading, Expert Advisers etc, manual trading is redundant, is simply wrong and misleading. Fully automated trading has never been a match for manual trading. And in fact is no different to other jobs which also require deep thought process, and automation can never fully replace. Translators and programmers are two such jobs. Automation has helped them develop and has made the job tools so user friendly. But even to this day, it is impossible for a computer to produce a complex accurate translation, or to create a computer program, all by itself. Trading is just as complex if not more so. In fact, the FX exchange mechanism carries risks and uncertainties which cannot be modeled mathematically. Not unless the designer makes assumptions, assumptions that this or that will not happen. But Murphy’s law always finds its way in through such assumptions. So the bottom line is that trading platform evolution is not threat to creative thinking and manual trading. They will always be there for original thinkers to figure it out and use it.

What Forex Trading Brokers Wise Traders Use

Forex trading brokers offer all kinds of promotions and advantages to their clients. Wise traders however are not sold on promotions, but rather on efficiency.

Forex Trading Brokers Serious and Wise Traders Use

Serious and wise traders, trading anything from commodities to currencies, use forex trading brokers of top liquidity. Liquidity means that the forex trader gets a better price every time they open or close a trade. Top brokers are working in a very competitive advantage and manage to offer low spreads to their clients. But even if they had to charge high commissions, their quality services would still be worth paying these commissions. To the small size trader liquidity advantages don’t become apparent, because the amounts of money made or lost to the market are too small. But to traders risking $100s per trade, the extra profit margin that good liquidity brings, dwarfs dealing costs. Even if forex and commodity traders had to pay big fixed commission per trade, which many stock brokers charge today, the top forex trading brokers would still be worth doing business with. Wise traders don’t care about sign up bonuses, and fancy offers. It’s all about liquidity, trade execution speed, and reliable platforms. And rightly so, because the bottom line is all about maximizing profitability. Trading online is a serious business, and all wise traders take a selective approach which is about trading less often, but with more money committed to each trade.

Good Forex Trading Brokers VS Popular Brokers

Good forex trading brokers are not necessarily the most popular ones, or the ones you see advertised in the media. In fact, the good brokerage firms are the ones that have high client retention numbers. They might have fewer clients, but these clients are satisfied with the level of service provided. Ultimately, a broker which has been rated as good, by few large size traders, who put liquidity to the test, is indeed a good broker. As opposed to a broker which has been rated as good, by 1000s of micro account traders, risking $1 per trade, and to whom liquidity issues, if they exist, will never be revealed. Liquidity issues surface at large size, and medium size high frequency trading. That is the ultimate test for all brokers. And while no perfect broker exists, the differences from one to another can be dramatic. In order to learn how to trade forex well, and from a real world perspective, one has to go for a good broker. The next step, is of course to become selective, think each trade through before execution. And to also avoid too much diversification. It is better to trade few markets, ones that the trader can master well. Many amateur traders tend to do the opposite, which is using a broker offering the most bonuses, which come with all kinds of strings attached. And then try to qualify for that bonus by attempting to increase trading activity, over too many different currency pairs. And that’s not the right way to profit from the forex market.

The Forex Trading Business Opportunity for Serious Entrepreneurs

Grab Your Forex Trading Business Opportunity

The new forex trading business opportunity is heavily advertised online. Ordinary people and classic investors are looking into it. But is it a good business?

The Forex Trading Business Opportunity as Seen through the Eyes of Serious Entrepreneurs

The forex trading business opportunity in this day and age is seen as a tricky, and skill-demanding business. Serious entrepreneurs are very streetwise people, having a reasonable risk appetite, as taking risks is essential in business startups. Typically, there is a drive and curiosity for the new and unusual, and for having something unique and proprietary. More than 50% of business startups actually end up failing. And this is because of poor strategic planning, poor decision making, and not having that proprietary competitive advantage. A typical classic business startup with a high failure rate are restaurants. Restaurants have 60% failure rate, even though they are owned and run by excellent cooks. Serious entrepreneurs look at currency trading much the same way as classic startups, and they are able to figure out if this something they are able to do successfully or not. The forex trading business opportunity is not an elusive dream because it sounds too good to be true, nor because it promises excessive success. Rather, it may become elusive and unrealistic when the pursuer loses touch with reality, just like that 60% of overconfident restaurant owners… And yet trading online, in a meaningful and profitable way, is actually achieved by many strong willed people. Some of these determined people had previously failed in classic business startups. Where there was the illusion that there was no excessive risk, and profitability looked certain. And yet, many veteran investors and entrepreneurs still remember the exit wounds from failed classic business startups of the past. They are smart enough to know that there’s no such thing as a free lunch, and that nobody leaves an easy profit margin unexploited. They also know that no matter what the business idea is, nobody will serve them success on a silver platter. There is always the need for having an advantage over the competition.

The Forex Trading Business Opportunity in the Hands of Serious Entrepreneurs

The forex trading business opportunity is embraced as a risky, yet highly rewarding endeavor by all serious entrepreneurs. The younger generation of which are more tech savvy, and rely more on technology and day trading. Whereas the classic investor turned forex trader, tends to rely more on fundamental analysis and longer time frames. But regardless of personal choices, they all seek a proprietary advantage. And many of them actually find this proprietary advantage at some point, in their trading business. Many online CFD forex traders are actually classic startup veterans, having enormous experience and resilient psychology when it comes to taking risks. They know that mainstream trading methods are not the real key to trading success. They also know that markets are volatile, just like life often is. And how volatility may turn into opportunity.

Finding the Best Forex Trading Strategy

Finding the best forex trading strategy involves a lot of curiosity, a long learning curve, and nerves of steel. Quitters cannot take all that, and lose hope.

Commitment to Fulfilling the Task is Essential for Developing the Best Forex Trading Strategy

Foreign currency trading is so complicated, that most new traders tend to quit trading altogether after their first few failures. Not realizing what they are up against, and often not being in touch with reality. These traders end up coming close to but not actually finding the best forex trading strategy. The problems are many and diverse, but it all boils down to lack of determination and access to ordinary 9 to 5 jobs. Married men for example are always advised against taking risks in life, by their wives. So many new trading who were on the learning curve, end up quitting trading once they get married. Currency trading is risky at all times, even when it is very profitable it still carries some risk, and this flies in the face of having a stable, routine family life. Especially when one trades at considerable size. Despite this, there are some strongly family oriented people who are also very good forex traders. Getting through the long and often painful learning curve is the ultimate test for all traders. And success doesn’t come right away. As a trader learns efficient trading techniques, all that happens is that they are able to become marginally profitable at first. This is usually where traders make money trading but also give back much of the gains. Losing back 60% or 70% of the trading gains, is a strongly disappointing feeling, even more perhaps than pure losing trades. Because the trader has the feeling of having got too close but not being there just yet. And losing trades never quite go away, even when extremely profitable trading is achieved, traders still have losing trades. It’s just that the percentages have reversed by far, and they only lose back 20% or 30% of their total profits.

The Signs of the Best Forex Trading Strategy

The signs of having found the best forex trading strategy are confidence, feeling comfortable with losing trades and optimistic. Above all, the trader who is on solid profitable footing, knows that they can steadily recover all losses. That feeling alone, of knowing that you can recover previous losses, in whatever trading conditions, is what keeps traders determined, and fear is under full control. Trading forex for making a living requires having a positive attitude towards achieving goals, and being kind of a curious, single minded person. Very often, family and friends will advice against taking risks and achieving goals, but their reasoning is based on average statistical facts about other people. And there is a chance that they could be wrong this time on advising someone else. Because some people think in different, original ways, without repeating the mistakes others made in the past. This is very true in business start ups too, not just forex. Many new businesses were seen as failures in their early stages, only to prove critics completely wrong later on. It’s the same with the pursuit of the best forex trading strategy, outside critics are oblivious to the real facts.