Financial Trend Blog

How is it possible to make real money by trading in the Forex market? Two words: Margin Trading. Margin trading is trading using borrowed money.

As you recall from part one, Forex is traded in lots, usually of $100,000. So you cannot for instance, purchase a hundred, or even five hundred units of any given currency. Some Forex dealers may offer Mini-Lots, which are $10,000 - or Micro-Lots of $1,000. Fortunately, you don’t need to have $100,000 lying around in order to get started in Forex trading.

Do you find yourself blaming the markets? The trading system that you’ve purchased online that promises you profits from trading? Do you blame everyone and everything for your trading results?

If you can identify with the above scenario, I can tell you’re probably in a world of hurt and losses. It’s always easier to blame the markets, people and systems for your trading failures. After all, it’s always someone else’s fault but your own.

However, if you don’t take responsibility for your trading results, the truth of the matter is that you’ll never get anywhere closer to being a consistently profitable trader. Why?

If you are considering trading with a forex broker, here is news of a service that is great for seeing if you have what it takes and is much more realistic than a demo account. If you are interested in trading and worried about the risk, then these accounts look a great way to get started.

A protected account introduces potential traders to the lucrative world of currency trading - but unlike a demo account, allows them to feel what trading is really like with limited risk.

Successful forex trading involves the proper use of pivot points. Finding a trend early and riding it when forex trading is the key to success. We have all heard that the trend is your friend but good friends are hard to come by in forex trading. Anyone who has read several of my articles is aware that I love Pivot points. The problem most face when trying to use pivot point and ride a trend to profits in forex trading is knowing when to go long or short a currency pair. When to follow a strong trend and when that ship has sailed.

In an article a week ago “US Dollar Outlook - Dollar to Strengthen Further” we postulated that the dollar would have a good week and so it has proved. Our logic was purely based upon trader psychology NOT the fundamentals or news. This week’s action shows graphically how important trader psychology is.

Always remember this is the equation for market movement:

Fundamentals + Trader psychology = Price

The fundamentals are actually not as important as how investors perceive them.

Every forex currency trader must know how to accurately interpret technical indicators in order to be a successful trader. Being able to consistently interpret currency trading technical indicators is the difference between forex trading success and failure. Moving averages are one of the technical indicators frequently used by forex trading pros. Let’s discover what moving averages are and how they are useful for forex traders.

How and why do forex prices move? The answer may sound obvious but most traders get the reasons wrong and lose. If you understand the following 3 points, then you will understand more above currency movement and get a head start in your quest for currency trading success.

So how do prices move?

Well of course they move in reaction to all the supply and demand political factors such as: interest rates, government policy, economic health and a whole host of others and these are facts but prices are also influenced by people.

There are many people that sign up to trade Forex that don’t understand it. They also don’t take the time to learn how and why to trade Forex. There are many risks involved in trading any kind of asset whether it is stocks, bonds, or currencies. If you are interested in trading make sure you understand Forex risks.

If gambling is your wife, you might want to consider having Forex trading as your mistress. Forex gives you triple the fun as gambling only gives you double. Through Forex trading, a risk you staked is never proportional to the reward you get. It could flip your money load of times, but consequently will also swap your money for a heartache.

The turtle story is perhaps one of the most inspiring trading stories ever and if you want to learn forex trading, then you should study how they did it.

Let’s look at it in more detail.

The Experiment

Legendary trader Richard Dennis set out to prove over 20 years ago, that successful trading could be learned by anyone and set out to prove his point.

He took 23 people all with no trading experience:

Male, female, young, old and from a variety of jobs - many of them blue collar and set out to teach these people a method they could use to make big profits.

Using Forex charts is like being a ships captain at sea: Your charts can help you navigate successfully to port or you can hit the rocks and drown - the choice is yours.
It’s the same with forex charts 95% of users drown – Let’s look at common errors that novice traders make and how to avoid them.