Have you ever noticed that one trading strategy may work absolutely beautifully with one currency pair, but it may fail miserably with another? That is because each currency pair has its own personality, special behaviors, and idiosyncrasies. And if you don’t understand and pay attention to these differences, you will be leaving money on the table. So let’s look at which currency pairs are the absolute best for range trading.
Every currency will range at one time or another. Especially after large moves, traders need to take a break and step away, and so the currency tends to range back and forth. But some currency pairs are absolute goldmines for trading ranges.
Let’s start here – you know that interest rates are a huge factor (in fact, maybe the single most important factor) when it comes to the foreign exchange. You will get the best range trading opportunities on currency pairs where each country’s interest rate is similar.
So that means that currency pairs like the EUR/CHF and the CHF/JPY are going to be good excellent range trading pairs. That is because their interest rates are very similar, so money is not flowing strongly into either currency in comparison to another. Bring up a chart of the either of these currencies and you will see that they do not move around that much.
On the other hand, currency pairs whose countries have large interest rate differentials between each other (i.e. AUD/JPY and AUD/CHF) will tend to range much less.
Some quick basics on range trading:
1) You don’t have to wait for the price to actually hit the top and bottom of the range to enter a trade. Divide the range into 4 even sections, wait for the price to reach the upper or lower quartile, and then look for indications the market is turning.
2) Use Bollinger bands, the ADX indicator, or the Average True Range indicator to tell you then the market may turn.
3) Always put your stop loss outside of the range – never inside.
Tags: forex, forex currency, trading
Here we will look at how a group of people who had never traded before, learned to trade in just a few weeks and go onto make millions of Dollars. This group of people proved that anyone could learn to trade and anyone could win at Forex – so let’s look at how they achieved success and how you can learn from them.
Richard Dennis was a trader who had the view, that with the right education anyone could make money trading so he advertised in the paper and collected a group of people together, who only had one thing in common – they had never traded before. The group included an actor, a security guard, a clerk and a kid who had just come out of high school.
This group, were then taught a system and the logic behind it, in just 14 days; they then started trading and the results were astounding, as they piled up hundreds of millions of Dollars in profits.
So what can you learn from them in your quest for currency trading success?
- Dennis proved that anyone, has the potential to be a successful trader and he proved that trading was a learned skill.
- The system used was incredibly simple, so simple in fact the traders learned the system and the logic behind it in just a couple of weeks. There is a myth that complex systems beat simple ones but the opposite is true – A simple system is more robust than a complex one with fewer elements to break.
- The system traded long term and focused on the big trends which last for weeks or months, because these are the trends that yield the biggest gains. Contrast this, with the huge amount of Forex traders, who scalp or day trade, they make a lot of effort but end up losing because their trading the noise of the market and taking low odds trades.
- The system had strong money management and actually had far more losses than profits but the fact the system cut losses and ran profits, meant it made huge gains.
- The traders all said the system was easy to learn and they could see why it would work yet, they all had problems following it and taking losses. Of course this is true – we all hate to look stupid and lose money but in Forex trading, cutting losses and sound money management is the key to making long term profits.
Why You can Win at Forex Trading!
As you can see from the above, the group taught by Dennis, made huge gains with a simple system, they learned the right education and learned to trade quickly, they also lost more trades than they won but because they traded with discipline, they made huge long term gains. So if you have a desire to succeed and the motivation to learn, there is nothing to stop you achieving long term currency trading success.
Tags: money, success, tradingIn this Forex course we will review some steps you need to take care before you venture into your trading journey. Most traders venture into the Forex market with little or no experience in the Forex market. This results in painful experiences like loosing most of the risk capital, frustration because it seemed so easy to make money, etc.
The first thing you need to realize is that, it is not easy to make money. As every other endeavor in life, where important rewards are to come after mastering it, you need to work hard. You need to get very well educated and experienced before having the possibility to receive important rewards on it. The key on mastering the Forex market relies on commitment, patience and discipline.
Ok, you have decided you are going to trade the Forex market, you have seen several advertisings featuring how easy is to make money in the Forex market. You might think this is your opportunity to reach your financial freedom, right away, time is money, why waiting any longer if you have the opportunity to make money now. I know, I’ve been there, but you have a chance now, I didn’t, no body told me what I am going to tell you.
We, Forex traders, make transactions based on a set of rules. These sets of rules are what we call a Trading System. Our systems tell us the exact time where we need to get in the market and out the market in order to make a profit (i.e. buy low sell high.)
Creating a system is the first big step you need to take care first. Why is this so important? Because you need to build a system that suits your personality, otherwise you are going to find hard to follow it, thus hard to profit from. A system can be based on technical indicators or what we called a mechanical system or based on experience and intuition or what we call discretionary systems. I highly recommend using and trying first a mechanical system, because discretionary systems are dangerous during the early stages of a Forex trader (can lead to indiscipline.) With experience, on later stages, you will find out which signals work better and which ones to avoid.
The next step in this Forex course is to try your system on a demo account. Most Forex brokers offer a demo account, an account with virtual money. This is an excellent choice to test your trading system as there is no money at risk. In this step you will figure out if the strategy works for you. If you feel comfortable trading it, then it is most likely to produce good results. How much time should you stay in this step? It varies, but you shouldn’t go one step further until your system gets consistent profitable results over a period of time. It can take many months, but remember, you need to be patient.
You must be honest to yourself; you need to take every single signal generated by your system, not only the signals you thought were going to work, otherwise, you are going to have problems in the next two steps.
Ok, by know you had consistent profitable results on your demo account. You might think its time to go full. Nope, nope, nope. There is a big difference between trading a demo and a real account. The most important difference lies on emotions (fear, greed, anger, etc.) These are psychological barriers that affect every single decision made by traders regardless of what he/she is trading (stocks, bonds, Forex, futures, grains, etc.) These emotional factors, in my opinion, are the most determinant factor that separates profitable traders from the others.
The next step in this Forex course is specially designed to deal with emotions and to confirm the results obtained in the prior step (consistent results in a demo account.) At this step you need to trade in a real account with limited funds. Some brokers offer fractional lot trading. Meaning you are able to trade any desired amount (even cents.) The important thing here is that these emotions we’ve been talking about are present only when there is real money at risk. At this stage, you are going to see if you are really comfortable trading your system and if you are able to trade with such system, remember different systems produce different emotions. If you are able to produce similar results than those obtained in a demo account, then ready for the next step. If you didn’t, then you might need to create another system, there is chance your system never fit you. If you created consistent profitable results on this stage, you have a chance to produce similar results in the next one, on the other hand, if you didn’t produce good results in this stage, you will not be able to make on the next stage. Remember, you need to do things right, and be honest to yourself.
The last stage is trading in a real account with sufficient funds. If you are at this stage, and have passed successfully every prior stage, then you have a chance to make it, go ahead and try it, you need to be confident in yourself and in your system, your strategy have already produced consistent profitable results, there are reasons to believe you are going to make it. Very few traders fail at this stage (if passed successfully prior stages.)
Trading successfully is no easy task, it requires a lot of work, patience, discipline, and education. By completing the steps outlined in this Forex course, you have a chance to produce profitable results. I repeat it again, you need to be honest to yourself about the results obtained in every stage. Some times you might need expert guidance regarding your system development strategies.
Tags: forex course, traders, trading
