Forex Trade – Intelligent Forex


Why You Can’t Predict Forex Prices

Posted in Forex Education by intelligentforex on March 5, 2010

Many traders make the mistake of thinking that they can predict forex prices in advance. If you believe this, then you need the forex education enclosed in this article. Let’s look at why you can’t – but why it won’t stop you from enjoying currency trading success.

If you think about it – it’s obvious why you can’t predict prices in advance, because if you do, you are hoping or guessing and that won’t get you very far in life or forex trading. You will find out that your predictions are no more accurate than your horoscope.

There is a school of thought that because human nature is constant, then prices must move to a scientific theory – but they don’t. Human nature is not predictable in absolute terms and if of course there were a scientific theory of market movement, we would all know the price in advance and there would be no market. Markets actually move because human nature is unpredictable.

So if you can’t predict prices in advance then how can you win? The answer is to look for high odds chart formations and then confirm each and every trading signal with price momentum.

For example, let’s say you see prices coming into a strong level of support on your forex chart and you want to execute a trading signal – rather than plunging straight into the market, you wait for a test of support and prices to move back the other way.

Essentially you are looking for price momentum to turn around and move away from the support level, and then you execute your trading signal. Now you won’t be right in at the bottom of the move however as you can’t predict than anyway, it’s no big deal but you will have the odds on your side and the chances that the trend will continue.

How do you know momentum has changed?

You need to get familiar with momentum oscillators. We don’t have time to discuss them in full detail in this article (simply look at our other articles) but you can get a great trading edge by using them in your forex trading strategy.

Two of the best are the stochastic and Relative Strength Index (RSI). There both visual set ups and a quick glance at either of them, will help you determine if price momentum is turning or not. There are of course lots of others but the above are two of the best.

Successful forex trading is all about getting the odds on your side. If you use momentum you will achieve this – you’re not out for perfection with your market timing, you’re looking to make money and that’s it.

So make momentum oscillators and there application, part of your essential forex education and they will lead you to currency trading success.

Forex Education – Understanding Standard Deviation For Bigger FX Profits

Posted in Forex Education by intelligentforex on March 5, 2010

If you ask most Forex traders what standard deviation of price is you will me met with a blank look but understanding it is essential Forex education which if you know its significance and use it, can help you make bigger forex profits…

To show how valuable understanding it is – I once saw a trading system that only used standard deviation to generate trading signals and in just a couple of years, it went from a $100,000 to just over $1.1 million, in real time trading, simply trading changes in volatility.

Lets take a look at it in more detail, how to calculate it and a trading indicator to help you apply it in the markets.

What is Standard Deviation?

Standard deviation of price is the term that is used to statistically measure the volatility of price in any financial market (not just forex) and gives a view of how widely values (closing prices) are dispersed from the average price.

Dispersion is simply the difference between the actual value (present closing price) and the average value or mean closing price.

The wider the difference between the actual value and average value the higher the standard deviation will be. Standard deviation therefore gives you an overall view of market volatility and dealing with market volatility is one of the major challenges any financial trader has to deal with

Measuring Standard Deviation

To measure standard deviation and see how volatile a market is you do the following calculation:

Take the square root of the variance, the average of the squared deviations from the mean and you have the standard deviation.

If you find it a little confusing at the moment don’t worry as there are visual indictors you can use which will show it to you in simple terms and you don’t need to know the calculation to use it.

The Importance of Volatility

When markets are very volatile standard deviation will be high and when they are for example trading in ranges standard deviation will be low and you can see it historically and use it in your trading

Using It in Your Forex Trading Strategy

It’s a fact that periods of high volatility (price spikes) don’t last long and you can see this in any market and prices will normally return back to the longer term average. Price spikes are normally the result of the emotions of greed and fear as we as traders push prices to far either up or down.

Generally you can use standard deviation in the following way

High standard Deviation Won’t Last

When price spikes occur and standard deviation is high historically, you can look to take profits or enter contrary trades against the spike.

Buying the Average

Prices will always tend to dip back to the average in strong trending markets and this is an opportunity to load up trades in the direction of the trend.

Low Standard Deviation Moving to High and New Trends

When a market is not volatile and features low standard deviation and it turns higher you will very often see a new trend develop and it’s an advance warning to get ready to execute a trading signal.

A Visual Tool to Measure Volatility

A very useful tool which gives you a visual view of standard deviation and volatility is the Bollinger Band and every trader should be familiar with it.

Bollinger bands are volatility bands which are drawn either side of a simple moving average and combine a simple moving average with the volatility of the individual market in a trading envelope.

The outer bands show you the volatility and the simple moving average gives you the long term value of the market. You therefore can see how volatile the market is historically via the outer bands and see the value of the market at the centre band.

Just simply using the outer bands to decide when to take profits and enter new positions and buying or selling back to the moving average can be highly effective.

We will look at Bollinger Bands in more detail in the next article of essential forex education and how you combine them with momentum indicators to generate trading signals and improve your market timing.

5 Key Losing Mistakes Novices Make You Must Avoid

Posted in Forex Education by intelligentforex on February 5, 2010

If you want to win at Forex trading you need to avoid the following key errors that losers make, there easy to avoid and there enclosed.

These mistakes are in no order of importance, there all vital to avoid! So make them part of your essential Forex education.

1. You need to make an effort and get skills and confidence

You will see a vast number of Forex Robots and Expert Advisors offering you an income for life for a nominal cost but they don’t work. If Forex trading was as easy as paying a couple of hundred dollars and sitting back and making easy money, the whole world would be trading and 95% of Forex traders wouldn’t lose money.

2. Don’t work Hard work Smart

You don’t need to work hard at Forex trading, because it’s simple to learn and simple systems work best. Many traders think the harder they work the more money they will make but this isn’t true. Complicated clever systems always break in the brutal world of trading, so keep it nice and simple.

3. Beware of Prediction

Lots of vendors sell the story you can predict prices of Forex in advance but you cant – you need to trade the reality of price change, sure you won’t catch the exact low or high but you can make a lot of money. Always wait for a move to start before getting on board.

4. Don’t Chase your Tail

Traders are always switching systems, to find a better or perfect one but there is no such thing as the perfect system. Stick with one and keep your losses small when you have them and run your profits; you can’t win all the time but you can make a lot of money, so be patient and accept losing trades in the short term and focus on the long term.

5. Always trade with discipline

This is the very key to Forex trading success and if you can’t trade with discipline, you don’t have a system. Traders lack discipline because when they lose, they get angry and start to run losses and deviate from their system rules; if you do this you will lose. Discipline is based on confidence and knowing what your doing and comes from a sound Forex education.

Anyone can Learn Forex Trading

Forex trading can be learned by anyone but you must know the rules of the game to succeed and avoid the 5 mistakes that loser’s make we have just looked at.

If you can avoid the mistakes, get a good education and get confidence, you can trade with discipline and make a lot of money at Forex trading.

6 Vital Tips for Novice Traders

Posted in Forex Education by intelligentforex on February 5, 2010

If you want to make money in currencies you need the right forex education and it’s a fact any trader can learn forex trading and be successful but most fail to make money. This article will give you 6 tips so you can enjoy currency trading success.

Here are your forex tips in no order of importance but there all essential to your trading success.

1. Success Rests On Your Shoulders

No one else can make you rich you have to understand what you are doing to get the confidence to follow your path with discipline. If you don’t understand what you are doing then your discipline will go as soon as you have some losses.

If you cannot follow a forex trading strategy with discipline you have no system.

2. Forex trading is NOT easy

Anyone can learn to trade but the really hard part is the mindset to succeed.

Do not believe anyone who tells you that it is and sells systems saying that you will make money every month or they can predict prices they can’t. There is a huge market for these systems and there mostly junk and come with a worthless simulated track record. As we said success comes from understanding what you are doing and self education is the key that will make you successful.

Forex trading is not easy and wouldn’t expect it to be with the rewards to be had but the good news is – it’s not that hard either.

3. Work Smart Not Hard

Most traders think the harder they work the more money they will make. In many areas of life this is true but not in forex markets! You get paid for being right with your trading signal and that’s it.

Work smart and learn the right knowledge and avoid all the common myths that most traders fall for which include:

– Day trading systems make money.

– You need to predict forex prices to win.

– The more complicated your trading strategy the more likely you are to win.

– Trading news stories is a great way to make money.

None of the above are true – there all myths we have covered even more in our other articles so look them up.

4. Use Forex Technical Analysis

It’s simply the most time efficient and best way to trade.

You can learn it in around two weeks and then spend just 30 minutes a day executing your trading signals – and that’s it. All you need to do is learn to act on the reality of price change and not predict.

5. Keep it Simple!

Simple currency trading systems work better than complicated ones, as they tend to be more robust.

Complicated systems fail in real time trading as they have too many elements to break.

6. Know Your Trading Edge

Your trading edge is something that will give you an advantage that will allow you to make profits when 95% of traders lose. You must understand it and be confident that it will lead you to forex trading success. If you don’t know what it is you don’t have one and its time to continue with your forex education until you do.

As you can see form the above your forex education is all about working smart not hard and getting the right knowledge and mindset to succeed. If you can learn currency trading the right way, a life changing income could be yours.

The Best Forex Education For Beginners

Posted in Forex Education by intelligentforex on February 5, 2010

There are many options available to get an education trading the forex. A new trader can quickly get overwhelmed by all the information available on the internet. There are all kinds of opinions about what are the best techniques and strategies you should learn. When looking at all these sources it’s easy for a beginner to become paralyzed by too much information to choose from. So what is the best forex education for beginners?

There are as many opinions as there are traders who will give conflicting advice as to what strategies and techniques you should be learning. This is what most traders spend their energy on, pursuing that one perfect technique, that one strategy that will make them money. That’s why most traders end up spinning their wheels and never see the profits that are available from the forex. As a beginning trader you shouldn’t concern yourself too much with techniques and strategies. The best forex education for beginners is education that will focus on you becoming a good consistent disciplined trader.

Until you can become an effective trader yourself, all the techniques in the world are not going to do you any good. Most new traders will continually learn one system and then move onto the next because the previous one didn’t work. It’s usually not that the system didn’t work, it was that the trader wasn’t being consistent working the system.

As a beginner you should be doing your trading on a demo account. Find one or maybe two trading systems that you like and just concentrate on trading the system with consistency. Work on not allowing your emotions to affect your trading decisions. Don’t worry about whether your demo makes a profit or not. This is just practice time, the goal is not to make money yet, the goal is to become a consistent disciplined trader.

Whether it takes several months or a year or more keep your focus on consistency. After you develop that then you can start working on getting a system that will make you money. Until then if you want to make money you will be better off using automated expert advisor software. This software also called a robot will trade a system for you. Many of them have built in time tested systems that are known to make a profit. These programs don’t have emotions or bad habits to overcome. They just trade the system consistently.

You can learn a lot by watching a good robot trade and make a lot of money in the process. If you are interested in trading manually and want the best forex education for beginners, focus your education on yourself and your trading habits first until you become a good trader. If you want to make money now get a robot.

Get Education From Some Pro Traders Who Made Hundreds of Millions of Dollars!

Posted in Forex Education by intelligentforex on January 24, 2010

If you want to learn Forex, don’t try short cuts and believe all the people trying to sell you get rich quick robots, these all lose money instead, get some great Forex education which is free from so0me traders who have walked the walk rather than simply talk the talk. Let’s look at what you can learn from our group of super traders.

The traders we are referring to were called “the turtles” – these traders had never traded before but were given a system by trading legend Richard Dennis and they used it to make over $200 million dollars in just over 4 years. The system is free online and while not as profitable as it once was ( its over 20 years old), it still will make any trader who follows it correctly big gains but for me, the reason any new trader should look it,is because it has all the elements a good trading system should which include:

– It’s based on trading the reality of price change via breakouts a timeless way to make profits
– It gets in and all holds the really big trends for stellar profits
– It has great money management rules to keep equity intact
– Its easy to understand and have confidence in, making it easy to trade with discipline.

While the system made the “turtle traders” a lot of money, most of them when interviewed commented on how hard it was to follow, due to the amount of losses it had. The number of losses were far more than the number of profitable trades but of course it made huge gains overall, as the profits were so big in comparison to the losing trades it had. All traders hate taking losses and lack discipline and this normally leads to their demise, what the above system shows is that, if you take your losses and keep them small, you can still make huge overall gains.

If you look up the system, you will see one that’s actually made several hundred millions of dollars in real time trading, still works today and has all the elements a good system should have to help you achieve currency trading success so look at this system and learn Forex trading the right way.

4 Tips for Getting the Best Education To Win

Posted in Forex Education by intelligentforex on January 24, 2010

Forex trading looks simple yet few succeed – 95% of new traders lose their money and only 5% win. This may seem an odd fact when anyone has the potential to learn forex trading.

The answer is most traders simply learn the wrong forex education and this article will give 4 tips to get the right education and win.

Firstly the growth of the internet has led to a lot more information becoming available to forex traders and some of it is very good – but most of it is junk and will simply ensure you lose and this leads us to our first tip.

1. Be wary of vendors selling education on the net

Most of them make me laugh for $100 or so I can get a system to make me regular profits every day, trade with 80% accuracy or even make me a millionaire – all for a few hundred dollars!

Don’t buy them – they won’t help your forex education.

There simply marketing guys not traders – if they were, they would shut up and trade for themselves, if making money was as easy as they say they wouldn’t need me or you.

2. Don’t learn the wrong Knowledge!

There are many myths that have been perpetrated on the net mostly by vendors and let’s start with the biggest one – forex day trading works.

No it doesn’t, day traders don’t make money – period

All short term volatility is random, so it can’t – that’s why you never see a day trader with a real time track record of profits.

Scientific theories are a great way to make money, another stupid myth.

If markets moved to scientific theory, we would all know the price in advance and there would be no market, yet new traders still learn junk theories like Elliot wave and Fibonacci numbers, lose and wonder why.

3. Get Knowledge from the real pro’s

You can do this simply by going to Amazon.com and you can get some really good forex education from traders who have walked the walk, rather than simply talk the talk.

For about $100 or so you can get some great advice (see our top 10 books for traders) and get them. They will inspire you and give you a good solid grounding in what it takes to be a successful forex trader.

This is an investment in your forex education that is well worth the money.

4. Work Smart Not Hard

Forex education involves working smart not hard and learning the right knowledge.

If you want to learn forex trading ALL that you need to build a successful system is available free on the net.

See our other articles, there is some great information on technical analysis, formations and indicators and it’s all free.

You don’t get rewarded for the effort you put into forex trading you get your reward from being right with your forex signals – nothing else. All you need to do is get the right info and you can become a successful trader.

CONSIDER THIS FACT

In 1983 Legendary trader Richard Dennis to prove that traders could be taught took 23 traders with no trading experience and taught them to trade in 14 days.

These traders went on to make Dennis $100 million dollars! The story is told in “The way of the turtle” and also Market Wizards – Get these books and you will see that Dennis made them focus on the RIGHT education to win with no filler.

Now you may not make as much money as the turtles but anyone can learn to trade and learn to win if they focus on the right education – you just need to find it digest it, apply it and hopefully this article will have pointed you in the right direction – Good luck.

20 Questions That Will Tell You If You Can Win At Forex Trading!

Posted in Forex Education by intelligentforex on January 24, 2010

Forex trading isn’t easy and you wouldn’t expect it to be with the rewards on offer but its not hard either – if you get the right forex education. If you look at the questions below and answer them correctly yes or no, you are learning forex trading the correct way and likely to be successful.

10 Questions you must answer NO to below:

1. I believe the more knowledge I acquire and the harder I work the more successful I will be.

2. Complicated systems are more likely to successful than simple ones.

3. The more news stories I study and trade the more chance I have of making money.

4. Day trading is a great way to make money.

5. Markets move to a scientific theory because human nature never changes.

6. You never go broke banking a profit.

7. You need to predict markets in advance to win at forex.

8. I can buy an e-book from a guru and just follow it they know best.

9. If I am always in the market the better my chances of success as I wont miss a move.

10. Buy low and sell high is a great way of making money.

If you agree with any of the above statements you will lose money.

They are all common forex myths believed by the 95% of traders who lose money.

If you answered no congratulations – you’re learning forex trading the right way.

Now – here are 10 questions you should answer YES to.

1. I know that success comes from within and no one else can give it to me.

2. If I devise my own trading strategy I will acquire confidence and discipline.

3. Simple systems work best as they are more robust than complicated ones.

4. Forex trading is not a game of science it’s a game of odds.

5. I need to run the long term trends to make money all short term.

6. All short term daily volatility is random and is un-tradable.

7. I don’t predict market moves I simply respond to the reality of price changes.

8. I buy markets when they break to new highs because most big moves start from new market highs NOT market lows.

9. I trade infrequently and only trade high odds set ups.

10. I don’t need to acquire lots of knowledge just the right knowledge then I am done.

Did you answer yes to the above questions? – then well done! Your learning the right forex education.

Now if you have got them all right so far, here is one final question to determine if you are likely to be a winner:

My trading edge is (defined)

If you don’t know what your trading edge is – you don’t have one!

Your trading edge is the reason you will succeed and the vast majority fail.

Forex trading is all about getting the right forex education, ignoring the myths and focusing on the right information.

You need to build a system you can have confidence in which will give you the discipline to trade for long term success through inevitable losing periods.

The rewards of trading forex are immense and the amount of money you can earn can be life changing and if you get the right forex education you can enjoy long term currency trading success.

If you have the desire to be a winner and can accept you are responsible for your own destiny then the vast rewards of forex trading await you.

Forex Currency Trading System Education – The Best Forex Plan For The Forex Currency Trading System

Posted in Forex Education by intelligentforex on January 8, 2010

When entering the Forex currency trading system it is imperative that you devise the best Forex plan. This includes getting the best Forex education training you possibly can before jumping headfirst into the Forex currency trading system. This article will give you a guideline for devising the best Forex plan for fast profits with a proven Forex currency trading system that really works.

The Forex market is the largest trading market in the world. The Forex market is said to turn over more than $1.5 trillion dollars each and every day.

When stepping into the Forex arena it is critical that you have an effective and proven Forex plan to follow to help you perfect the Forex currency trading system and to get the best Forex education as you possibly can.

Step one of any Forex plan is becoming as informed and education as you possibly can on how the Forex currency trading system actually operates. There are many fundamentals and strategies involved with the Forex currency trading system. In order to begin and expand your Forex education you need to enrol in a reputable Forex trading system course online and familarize yourself with the Forex currency market with a Forex simulated trading account.

A Forex simulated trading account does not require any investment of capital. What it does do though is train Forex beginners in the strategies and fundamentals of consistent and profitable Forex trading.

Step two involves expanding your Forex education. A Forex currency trading beginner must learn not to be too greedy too soon. By analysing world and political news and taking all the clues from Forex pivot points a Forex currency trading beginner can learn to minimize his losses with stop loss orders and to maximize his profits.

Step three of the Forex plan involves learning sound Forex investment strategies including the buy signals that the Forex charts frequently give Forex traders.

Step four of the Forex plan involves knowing when the rally for the Euro begins. The busiest hours in the Forex are the London hours which are after 2am New York time.

Step five of the Forex plan for beginners is to actually select that amount that you are willing to make on every Forex trade before you begin trading. This amount ought to be more than or equal to the earnings that you are willing to lose in the Forex trade.

It is tempting to dive into the Forex currency trading market headfirst and make trading decisions without any experience or sound strategies in place. If you want to join the ranks of 90 percent of Forex traders who are consistently unsuccessful then I suggest you ditch this Forex plan and dive right in.

Understanding Standard Deviation For Bigger FX Profits

Posted in Forex Education by intelligentforex on January 8, 2010

If you ask most Forex traders what standard deviation of price is you will me met with a blank look but understanding it is essential Forex education which if you know its significance and use it, can help you make bigger forex profits…

To show how valuable understanding it is – I once saw a trading system that only used standard deviation to generate trading signals and in just a couple of years, it went from a $100,000 to just over $1.1 million, in real time trading, simply trading changes in volatility.

Lets take a look at it in more detail, how to calculate it and a trading indicator to help you apply it in the markets.

What is Standard Deviation?

Standard deviation of price is the term that is used to statistically measure the volatility of price in any financial market (not just forex) and gives a view of how widely values (closing prices) are dispersed from the average price.

Dispersion is simply the difference between the actual value (present closing price) and the average value or mean closing price.

The wider the difference between the actual value and average value the higher the standard deviation will be. Standard deviation therefore gives you an overall view of market volatility and dealing with market volatility is one of the major challenges any financial trader has to deal with

Measuring Standard Deviation

To measure standard deviation and see how volatile a market is you do the following calculation:

Take the square root of the variance, the average of the squared deviations from the mean and you have the standard deviation.

If you find it a little confusing at the moment don’t worry as there are visual indictors you can use which will show it to you in simple terms and you don’t need to know the calculation to use it.

The Importance of Volatility

When markets are very volatile standard deviation will be high and when they are for example trading in ranges standard deviation will be low and you can see it historically and use it in your trading

Using It in Your Forex Trading Strategy

It’s a fact that periods of high volatility (price spikes) don’t last long and you can see this in any market and prices will normally return back to the longer term average. Price spikes are normally the result of the emotions of greed and fear as we as traders push prices to far either up or down.

Generally you can use standard deviation in the following way

High standard Deviation Won’t Last

When price spikes occur and standard deviation is high historically, you can look to take profits or enter contrary trades against the spike.

Buying the Average

Prices will always tend to dip back to the average in strong trending markets and this is an opportunity to load up trades in the direction of the trend.

Low Standard Deviation Moving to High and New Trends

When a market is not volatile and features low standard deviation and it turns higher you will very often see a new trend develop and it’s an advance warning to get ready to execute a trading signal.

A Visual Tool to Measure Volatility

A very useful tool which gives you a visual view of standard deviation and volatility is the Bollinger Band and every trader should be familiar with it.

Bollinger bands are volatility bands which are drawn either side of a simple moving average and combine a simple moving average with the volatility of the individual market in a trading envelope.

The outer bands show you the volatility and the simple moving average gives you the long term value of the market. You therefore can see how volatile the market is historically via the outer bands and see the value of the market at the centre band.

Just simply using the outer bands to decide when to take profits and enter new positions and buying or selling back to the moving average can be highly effective.

We will look at Bollinger Bands in more detail in the next article of essential forex education and how you combine them with momentum indicators to generate trading signals and improve your market timing.

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