STPE 3

I Set My Targets:

This was absolutely essential. I do not mean I set my targets on a per trade basis. I mean I set myself weekly and monthly targets. I have discussed in this previous article how important discipline is. As a newbie, what I needed above all else was discipline and the way I became disciplined was by setting targets.

I looked at my method and I decided it was capable of generating around 50-70 pips per trade, giving me on average two trades per week. So I set my weekly pip goal to 100 pips. When I meet my goal I stopped trading for the week.

Why was this so important?

It was important because

1. It gave my trading structure and allowed me to plan ahead, long term.
2. It gave me a goal to aim for instead of trading aimlessly.

That’s not all it did though. I fought against the biggest psychological pitfalls, which I discussed previously in this article, such as the tendency to overtrade and being undisciplined.

The urge to overtrade is one of the biggest problems a newbie trader faces. If you have a set target once you reach it you can relax, and take it easy for the rest of the week. It removes that pressure traders usually have to make more and more pips. It also keeps you disciplined because it gives you a structured plan that you can stick to.

STEP 2

I Picked a Pair:

This was exactly the same concept as picking a single timeframe. It just simplified my trading concentrating only on a single pair. When you’re a professional trader making tons of profit you can trade as many pairs as you want. However as you’re learning it’s best to concentrate on one pair. Here’s why:

1. Each Pair is Unique: Trading a single pair allows you to learn how that pair breaths. You will know a lot about a single pair instead of knowing a little about 5 pairs.
2. Speeds up Learning: Trading a single pair with a single time frame gives you only 1 chart to look at. This allows you to concentrate all your analysis on a single pair.

The idea behind picking a single pair to trade is a simple one. It is all about simplifying trading so you can learn to become a consistently profitable trader.

STEP 1

I Picked A Timeframe:

The first step was to pick a single time frame. By this time, I had been trading Forex for about 6 months so I knew my way around the markets. I quickly learned that smaller time frame charts are hard to analyse because they are erratic and prone to random movements.

I decided to jump up to the 4 hour charts and I haven’t looked back since. I strongly believe that every trader should trade on hourly charts or above.

The point is not so much what timeframe I traded it’s the fact that I picked a single time frame, and stuck to it. To me it was all about simplifying trading so I could more efficiently learn to trade.

So looking at a single timeframe had several benefits;

1. Allowed me to concentrate on learning one time frame, therefore removing a lot of the confusion you can have when juggling multiple time frames.
2. Gave me less charts to look at and allowed me to concentrate more on analysing a single currency pair.
3. Stopped me from over analysing my pair. Looking at too many time frames gave me conflicting signals.

Overall having a single time frame keeps it simple.

3 STEPS TO BETTER TRADING

Most new traders approach the market in the wrong way. They some how get the idea that being a trader is all about finding the right method. So they go on an expedition in search for that perfect combination of indicators, and it rarely ends well.

The truth is becoming a trader has very little to do with the system you use.

I have no real trading system. I have a trading method which is the composition of a few simple concepts. I believe a system sets out rules and limitations. A method, on the other hand, gives you the basic tools but the implementation is up to you.

The problem with trading systems is they are too rigid for a changing market so they do not work. The problem with a trading method is that you have to have the right mindset to properly implement the basic concepts of the method.

So how do you develop the right mindset?

Well I’ll tell you how I did it. I started off small. Instead of complicating trading I simplified it. From there, I was able to learn how to become consistently profitable. Here’s how I did it;

Easy to follow forex chart

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Technical Evaluation

Technical analysis is a way to attempt to trade in the forex market by determining previous trends that have led to profitable trade.

Futures Against Forex

The forex market, the largest and most active market in the world, conducts business of about 2 trillion dollars a day worldwide.

Fundamental Analysis

Fundamental indicators are the announcements which traders follow to show the strength of a particular currency with respect to others.

Difference Between Stock And Forex Trading

No matter whether there is a bull or bear market, in forex there are always opportunities

Forex Dealing

A trader attempts to profit from buying or selling currencies by implementing Fundamental and Technical analysis to help decide which way a currency is likely to move.

What is Forex?

The foreign exchange market is the world’s biggest financial market regularly experiencing daily transaction volumes in the trillions of dollars.

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SaxoTrader benefits:

• Complete product range – 160+ FX crosses (incl. Spot Gold/Silver), 6,000+ CFDs, 16 Index-tracking CFDs, Stocks from 22 exchanges, as well as FX Options, Futures contracts and other derivatives
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HISTORY OF FOREX TRADING

Initially, the value of goods was expressed in terms of other goods, i.e. an economy based on barter between individual market participants. The obvious limitations of such a system encouraged establishing more generally accepted means of exchange at a fairly early stage in history, to set a common benchmark of value. In different economies, everything from teeth to feathers to pretty stones has served this purpose, but soon metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value.

Originally, coins were simply minted from the preferred metal, but in stable political regimes the introduction of a paper form of governmental IOUs (I owe you) gained acceptance during the Middle Ages. Such IOUs, often introduced more successfully through force than persuasion were the basis of modern currencies.

Before World War I, most central banks supported their currencies with convertibility to gold. Although paper money could always be exchanged for gold, in reality this did not occur often, fostering the sometimes disastrous notion that there was not necessarily a need for full cover in the central reserves of the government.

At times, the ballooning supply of paper money without gold cover led to devastating inflation and resulting political instability. To protect local national interests, foreign exchange controls were increasingly introduced to prevent market forces from punishing monetary irresponsibility.

How to Trade Forex

Trading foreign exchange is exciting and potentially very profitable, but there are also significant risk factors. It is crucially important that you fully understand the implications of margin trading and the particular pitfalls and opportunities that foreign exchange trading offers. On these pages, we offer you a brief introduction to the Forex markets as well as their participants and some strategies that you can apply. However, if you are ever in doubt about any aspect of a trade, you can always discuss the matter in-depth with one of our dealers. They are available 24 hours a day on the Saxo Bank online trading system, SaxoTrader.

The benchmark of its service is efficient execution, concise analysis and expertise – all achieved whilst maintaining an attractive and competitive cost structure. Today, Saxo Bank offers one of Europe's premier all-round services for trading in derivative products and foreign exchange. We count amongst our employees numerous dealers and analysts, each of whom has many years experience and a wide and varied knowledge of the markets – gained both in our home countries and in international financial centres. When trading foreign exchange, futures and other derivative products, we offer 24-hour service, extensive daily analysis, individual access to our Research & Analysis department for specific queries, and immediate execution of trades through our international network of banks and brokers. All at a price considerably lower than that which most companies and private investors normally have access to

Trading the News: RBA Rate Decision

March 2009 RBA Rate Decision:

The Australian central bank held the cash rate steady at the 45-year low of 3.25% amid expectations for a 25bp cut, which suggests that the RBA may keep rates on hold after taking unprecedented steps to stimulate the $1T economy. RBA Governor Stevens said that the extraordinary measures taken on by the government and the central bank will provide ‘significant support’ to the economy, but went onto say that ‘weak conditions are likely to continue in the near term’ as nation teeters on the brink of a recession. Despite the encouraging comments from the central head, the outlook for growth and inflation remains bleak as the downturn in the global economy intensifies, and conditions are likely to get worse as trade conditions falter. Nevertheless, as policymakers adopt a wait-and-see approach, weakening fundamentals could spark another round of easing as growth prospects deteriorate at a rapid pace.

Trading the News: RBA Rate Decision

Apr 2009 RBA Rate Decision:

The Reserve Bank of Australia lowered the benchmark interest rate by 25bp to a 49-year low of 3.00% as the region faces its first recession since 1991, and went onto say that the extraordinary efforts taken on by policymakers will help to ‘provide significant support to domestic demand.’ Governor Glenn Stevens said that the $1T economy will contract this year, and stated that there was only room for a ‘modest adjustment’ in April after the growth rate unexpectedly fell 0.5% in the fourth quarter, which is the first contraction since 2000. Moreover, the central bank noted that demands for employment is ‘weakening,’ while ‘demand for credit is weak overall,’ and said that policymakers expect GDP ‘to fall in 2009’ as the downturn in the global economy intensifies. The comments suggests that the RBA may continue to ease policy further as growth prospects deteriorate, and may step up their efforts as trade conditions falter.

FXCM OPENS ITS TRADDING BOOK

Speculative Sentiment Index (SSI): FXCM opens its trading book to its clients. Many traders use price charts to guess whether people are buying or selling... the SSI Shows you

STRATAGEM

MCFX FOREX CHART

Forex and Safe Forex Programs

Forex and Safe Forex Programs:
Program "FOREX" is the solution for active traders and day-traders who work on the Currency Market (FOREX Market). FIRSTDATA GROUP offers the possibility to trade with minimal spread (2 pips) for major currency pairs available through trading platform MT4. There are no additional fees or commissions. As main benefits of the "FOREX" program represented by FIRSTDATA GROUP we can highlight instant execution of placed orders, trading without slippage, the possibility to use trailing stops, 29 currency pairs to trade, the swaps based on real LIBOR rates, the technical support 24/5, etc. FIRSTDATA GROUP is trying to make this program even better. In the near future we are planning to add up to five new currency pairs, and some CFDs.

FOREX TRADING:

FOREX TRADING:
The Foreign Exchange is the largest exchange market in the world. With the prospect of quick, hefty profits and the explosion of Internet technology and availability, FOREX trading has dramatically grown in popularity among investors of all types. But trading in this market isn’t easy. As with any other securities exchange, the successful trader must not only be knowledgeable and savvy with regard to the currencies being traded but also the venue in which he or she is operating.

FX Quotes & Charts

MARKET INFORMATION:
The chart and quote modules contain many tools and features to help you make your investment decisions. (Real-time prices. Source: Saxo Bank)