EASY FOREX TRADING

if you would go out on a dinner with your friends or family and you mentioned that you were trading on the Forex market most of them wouldn’t know what you were talking about. The worst thing is that most of the Forex traders that join the Forex market don’t know what they are doing. Understanding what Forex is, is the first good step to your success at Forex trading.

Whenever you start doing something new, you should learn the basics of it. Every start is hard and needs a lot of dedication, but if you are willing to learn success will come in time. So, before starting to trade on the Forex you should learn the very basics. I recommend that you check out Forex-Training. It provides high quality training and educational resources for foreign exchange ("Forex") and commodity traders. They also give you a free account which you can use to practice before starting to invest real money.

In forex trading, the USD is set to have relatively quiet news today. This lack of major news indicates that the other major currencies, such as the GBP, EUR and CAD, may be the market movers today and traders should pay close attention to each of their respective economic news releases.

USD - Dollar Falls as Labor Day Holiday

The U.S. Dollar fell against a number of its major crosses due to U.S. markets being closed. Looking at Monday's trading as a whole, the Labor Day holiday in the U.S. took its toll on the American currency. In early trading yesterday, the USD fell to a near 2 week low vs. the British Pound. This was after Kraft Foods stated that it made an offer to buy British chocolate maker Cadbury. Despite the low trading volume on Monday, it seems that risk appetite was high, and high-yielding currencies became more attractive. The Dollar Index dropping by 0.2% to 78.00 yesterday is evidence of this.

he USD/JPY cross fell by 25 pips yesterday to the 92.85 level, as many traders ditched the U.S. currency for the Yen due to the improving global economy and the thin trading of Labor Day. The Australian Dollar hit a 1 year high vs. the U.S. Dollar on Monday. The AUD was helped due to rising Gold and Crude Oil prices as of late, which Australia's currency is highly dependent. In addition, Australia's currency is in much greater shape than that of America. The Canadian Dollar made some inroads into the greenback. By the end of yesterday's trading, the EUR/USD pair closed unchanged at 1.4332.

Any system need to have a very good basic to stand on. Once the basic is sort out, then all the accessories can be add on. Just remember not to add too much to it. Today I am going to give a basic system. It consist of only 2 indicators. Being simple, it is able to generate good signal.

Indicators:
1. LWMA 55
2. MACD standard setting

Time frame: 30m

Stop Loss : 35 pips

Take Profit : 35 pips or more.

Currencies : EurUsd, GbpUsd, EurJpy, GbpJpy

Trading System:
LWMA act as a thin trend line. If the price is above it, its uptrend. If the price is below it, its downtrend. So you buy or sell according to trend. Never reverse trade. MACD also shows the trend. If MACD is above 0, its uptrend and the other way around.

I have put 3 vertical lines in the chart where MACD cross 0. Once MACD cross 0, you should only trade according to trend. You entry should be on the LWMA 55 or close. At the moment MACD has cross 0 and is heading down. From now on only consider short position. Try to enter as close as possible to LWMA 55.

Caution has to be taken, even though MACD has cross the trend is not yet full down actually. There is another indicator that I use to show trend and its not full down yet. Unfortunately that indicator is no where in the chart because it is not on GbpUsd chart. It is somewhere else.

Now you wonder why its not there. The truth is most people fail because what they are looking for is not there. That is what I meant with looking at the wrong direction. The trend indicator for GbpUsd is not on GbpUsd chart. Weird isnt it?

You can take this basic system and try to add on what ever system you have. Hopefully it is useful.

A mechanic has many tools. Each tools with its own usage and purpose. It is only down to intelligence and creativity that separates a good mechanic and a bad one.

Like a mechanic, a trader has many tools as well. Each indicator is a tool for the trader and a combination set of tools with rules is a trading system. A good trader has not 1 but many system. Each system has different purpose. It is down to knowledge and creativity that separates a good trader and a bad one apart from portfolio.

The best time frame to trade is the lower time frame but due to noise and spikes it is difficult to trade using lower timeframe. It is the reason why most trades fail in short time frame.

EurUsd has been ranging for the past few days and due to it, has hit my stop loss twice. Being a trend trader myself, I just cannot trade during these ranging period. So I stopped trading and try to make a new trading system using lower time frame to catch these ranging market.

You can actually tell if someone is new in Forex by the way they count their pips or profit. When people starts forex they count pips. They can have hundreds of pips a day and yet their profit is low. This is due to the low risk reward ratio they have taken.

Once you are older in Forex, you will see the ratio. No point of taking hundreds of pips when the profit is low. So you start to take high risk high return trade. These trades do not give you high pips but the profit margin is high.

That is how money is to be made in Forex. You actually manage your risk and take profit from it. For today as of now, I already taken 3 trades. 2 profit trades and 1 lost trade. My account grows 37%. Not bad for a slow Monday.

For the answer to Forex, once you know it you will feel helpless. No matter how smart or brilliant you are it counts for absolutely nothing here. I have Banking and IT qualification. Did that help me? 2 different qualification did not help me one bit here. Made me want to cry when I found it out.

Hunt pips but count profit.

Have you ever been lost in Forex? Some of you might be thinking, how do i get lost in forex?? Let me ask another question. Have you ever open a trade in one direction, after some time open a trade in the opposite direction?

Im sure that happens to all of us, myself included :). That is lost in Forex, where we are unsure of direction of trade. Some people even hedge in the situation.

I have a few tips when you are lost in Forex.

1. If you are lost and dont know which direction to trade, the most important thing is to stop trading and do something else. Go plant a tree or play games. Dont even look at the charts anymore to avoid confusion.

2. Is to take a trading system and put it on multiple time frame. I trade using the same system on 3 timeframe. 15m, 1h, daily. When all three is pointing at the same direction then I trade. If 2 timeframe is pointing at the same direction then i scalp.

3. After sometime, your brain will start to imprint patterns of Forex. Forex has the same pattern over and over again. In our mind, that pattern has been imprinted and it influence our decision making subconsciously. Once you reach that state you will rarely get lost in Forex. You will know the exact time to trade or to get lost (do something else).

I will try to update this blog. Been so long and so busy with new place. As for Forex, USD pairs are going nowhere at the moment with a high probability to go down further.