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First, the next time you feel like your stop loss has been hit
because your Broker wanted to make you lose money, then ask yourself a
few questions before you get too angry. Why do you think the Broker
wants to take your trade out they do not want to do that. Was your
position size really that big? Are they afraid that you are going to
start making the market? Really, when you ask yourself these
questions, you may find that it is highly unlikely that any of the
scenarios are really the case. Maybe your stop just got hit because
price traded there and that is it.
It doesn't matter whether you are trading a Broker's market derived
from underlying prices, or if you are trading the currency futures
direct to the Chicago Mercantile Exchange where orders are anonymous,
there will always be times when the market just hits your stop and
turns the way you thought it would. That's trading! The Brokers in
Forex can't move the market alone, even when the traders are hidden in
a Direct Access Environment. Traders need to take time and increase
the trading experience and they will soon get a feel for where the
majority of traders out there are placing stops loss orders. Sometimes
they get hit and sometimes they don't, whether you can see them or
not. This is just part of trading.
One has to know that many Forex traders seem to forget is that
Brokers need to take the other side of your trade. This is what makes
the Forex market so liquid and allows us to all buy when we want to
buy and sell when we want to sell. This is simply because the Forex
Broker is willing to provide a Bid and Offer at all times, thus
allowing us to enter and exit when the traders want too, it does not
matter if you are winning or in a losing position. Forex Brokers
stopped taking the other side of your trade, you would enter a world
of pain, finding it practically impossible to get fills on entries and
facing huge slippage on stop loss exits. Just ask any seasonal
commodity traders what it is like to get stuck in a trade and have a
stop loss that can't even be triggered as there is not enough volume
to find a Bid or Offer.
The FX Broker is to provide this service to us and a well
capitalized dealer with plenty of money will happily provide a way in
or out for the Forex trader and then simply hedge that position
immediately, this keeps them flat in the market at all times. They
make their money on the Spread, which is our next topic of
conversation.
One asset category that is not very well understood is what we refer
to in the business as the credit markets. In the futures market, these
encompass all debt instruments such as U.S. Treasury Bills, Notes, and
Bonds, and are not limited to derivatives of debt issued by the U.S.
treasury. The German debt market can also be traded here through most
futures brokers on the Eurex exchange. These derivative instruments
come with funny names like Schatz, Boble, and Buxl, and finally, the
Bund. The different names in all debt instruments are there simply to
differentiate the short, medium, and long maturity dates.
Instead of just pushing the buy button when the news is good, focus
on where price is in relation to real market supply and demand.
Furthermore, when developing your strategy to buy and sell in markets
for income or wealth, make sure your strategy, at its core, is exactly
in line with how you make money buying and selling anything in life.
The currency markets are a 24 hour market all around the world.
Traders trade the different currency pairs from each country. If you
are a new forex trader you need to learn how to trade the different
pairs and how news will effect the price movement. Keeping your
trading style simple and easy to use is the best way to go. Most forex
brokers will have a trial trading platform you can use. This will
allow you to learn how to read candle stick charting and charting
indicators.
You should learn a couple different technical indicators such as
the CCI and moving averages. These indicators are simple to use and
come on most forex trading platforms. Read and study all you can on
how they work on the charts. Trading blindly will lose all your
trading capitol in a few months. Make sure you learn how to use stop
losses and how to use a trailing stop once you begin to trade real
money. When you trade real money emotions can change your trading
style so its best to try and keep emotions out of trading. Keeping
everything easy to understand especially when in a trade will make you
more money.
When trading the forex markets you need to learn to deal with
losing trades. This is where using a stop loss will keep your losses
small. You need to let your winning trades run and use a trailing
stop. Check your charts for support and resistance areas to set your
stops. Not every trade can be a winner so you need to except the fact
that you will naturally have some losers.
If you are new to trading the currency markets you should not
trade around news release times. The markets can be very volatile with
wide swings in the pairs price. You will make money by staying with
the trend and stay out of trades in a range bound or choppy market. Once the forex pairs are in a good uptrend or downtrend you can
watch for a small pull back and then place your trades with the trend.
A straightforward guide to trading today's dynamic Forex market
Written by Wayne McDonell, the Chief Currency Coach at FX Bootcamp,
this book shows readers how to successfully trade the Forex market on
their own. FX Bootcamp's Guide to Strategic and Tactical Forex Trading
skillfully explains how to combine popular technical indicators to
formulate a comprehensive market strategy. Readers will then learn how
to focus on using this information to create a tactical trading
plan--one that will help them pull the trigger to get in and out of a
trade. Along the way, McDonell takes the time to discuss the various
challenges a Forex trader faces, such as greed, fear, loss, and
isolation. As a Forex trader and educator of traders, Wayne McDonell
knows what it takes to make it in the competitive world of Forex. And
with FX Bootcamp's Guide to Strategic and Tactical Forex Trading he
shows readers how.
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