Wednesday, January 13, 2010

The Realm of Automated Trading Systems: The Forex Market

Just how important is an automated system to the Forex trading system?

Before we answer that question, let us first find out how big Forex trading market is. From there, you can get to know the importance of automated systems for the Forex market.

The Forex market is the most extensive market around the world not just in terms of average daily turnover and average revenue per trader. It is also the largest market in terms of participants.

You name it, we’ve got it. See the following:

BANKS- they are not just for saving money and lending capital to enterprisers, but they are also one of the greater players in Forex market. Banks cater both to large quantity of speculative trading and daily commercial turnover. Well-established banks can trade billions of dollars worth of foreign currencies everyday. Some of the trades are accepted on behalf of their clients, but most are through proprietary desks.

COMMERCIAL COMPANIES- these commercial companies trade small amounts of foreign currencies compared to larger banks and their trades produce small and short-term effect on the market rates. However, the trade flows from transactions made by commercial companies are vital factors with regards to the long-term direction of the exchange rate of a certain currency.

CENTRAL BANKS- central banks play an important role in the Forex market. They have the control over the supply of different currency, inflation, and interest rate. Additionally, they have also official target rates for the currencies that they are handling. They are responsible for stabilizing the Forex market by using foreign exchange reserves. Their intervention in the market is enough to stabilize a certain currency.

INVESTMENT MANAGEMENT FIRMS- these firms commonly manage huge accounts on behalf of their clients such as endowments and pension funds. They are using the Forex market to promote transactions, specifically in foreign securities. An investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

RETAIL FX BROKERS- they manage a fraction of the total volume of Forex market. A single retail Forex broker estimates retail volume of between 25 to 50 billion dollars each day, which is presumably at 2% of the total market volume.

SPECULATORS- these are individuals who purchase and sell foreign currencies and profit through variations on its price as opposed to popular methods such as interest and dividends. They play the important role of transferring the risk to individuals who do not wish to bear it.

Only in Forex market, there are already six major players partaking on the $1.8 trillion worth of daily turnover. With a large number of Forex players, it is becoming a real need to switch from manual to automated Forex trading system.

Among the major Forex players mentioned above, the automated trading system is of great advantage to the speculators. Since they focus on the price fluctuations of foreign currencies, the real time data analysis will help them identify trades that will give advantage to them.

There are several automated trading systems available in the Forex market. There are also automated Forex systems that are offered for free or as part of their trading account acquired from their brokers/agents. That kind of complimentary system packages are typically elementary trading system. If you are looking for more functions, you can avail of it through additional payments.

There are two kinds of automated Forex trading system. These are discussed in the following:

Desktop-based system- all Forex-related data are stored on your desktop’s hard drive. This system is unpopular to Forex traders due to the susceptibility of all data to computer virus contamination and other security problems. Worse, when the computer malfunctions, all vital information might be lost and cannot be retrieved. It is little expensive compared to the other types of automated trading system.

Web-based system- the security of your Forex account and other data are supplied by your web-based provider. These are hosted on secured servers. It is convenient considering that there will be no software required and it is compatible with your Internet browser.

Try different automated trading system demos first so that you will be able to opt for the automated trading system that suits your personal preference and needs.

Even if you are just a small-time trader, it will be an advantage for you to use an automated Forex trading system for your future trades.

If you would like to have more information please click here: The Forex Market

Wednesday, January 6, 2010

Brand New Video Reveals Forex Discovery

Leaked Forex Videos from Beta Test Group

Last Autumn, in the midst of a late-night Forex trading research session, Bill Poulos made a Forex day trading discovery which he shared with a small group of traders.

Now, 6 months on... re-emerging from a marathon follow-up research session where he analyzed the unheard of results his initial group of traders got...

And discovered three variations to deliver even better results.

Watch a Demonstration of Forex Day Trading here

From what I've seen, no one is trading Forex like this (yet)...
Not to mention, this totally turns conventional "day trading" upside down.

He made a new training video last weekend which brings this updated discovery into the light revealing how to guard your portfolio from risk every single time you trade. Especially if you're inexperienced & have little time.

Click Here for info Forex Income Engine 2.0 The Silver Lining

The Silver Lining

In the course of his research, he confirmed what many have suspecting for quite some time

* The collapse of the global stock markets and economies has created pressures that, in turn, are creating more potential profit than ever seen before in the Forex markets.

That might come as a shock, especially if you're new to Currency trading... but he explains in his training video why this is happening, and how to profit from this.

You'll Also Discover

* How you can literally triple your profit potential exploiting a unique trick using the predominant trend.

* 2 "retracement tricks" most traders just simply miss out on, and when you know how to spot them, can turn an otherwise losing trade into a profitable homerun.

* The huge "edge" you get over other traders when you automatically identify the predominant trend at any point in time... and then "throw yourself in front of it"...

* The #1 key to trading Forex you MUST do EVERY SINGLE TIME before you place a trade before even thinking about profit. When you do this, you automatically "increase the odds" that profit will result...

* ...and lots more.

If you're interested in currency trading, or have been a little put off by what's been going on with the markets, then this may be the most important trading video you'll ever see this year.

Why? Because after you watch it, you'll be scrambling to start Forex trading this way...

It finally brings flexibility and customization to Forex day trading so that anyone can have an "edge", whether you only have twenty minutes to trade, or if you have all day. Your choice.

This is by none other than Bill Poulos. This is a little preview of the Forex Income Engine 2.0. That's right Bill Poulos is at it again. Not to be content with producing the best Forex trading course of 2008, in my opinion. He come out with even more cutting edge pip pulling methods and advice.

Thursday, December 17, 2009

What Is Forex Online Currency Trading?

Did you know that losses can be higher than gains with most automated Forex trading systems for the average user? Most investors lose money because they lack the necessary knowledge to make profit by professional speculation. The trading system choice nevertheless has a word to say in the matter, particularly with the huge advertising pressure. Do not take into consideration ads like 'scalp 30 pips a day', 'make a living' or '90% rate of success'. Remember that nobody knows tomorrow's prices, it is all pure speculation. Therefore, you can learn the hard way that real time track records don't work as expected.

Do you have confidence in Forex online currency trading? Where does your money go? There are inevitable periods when prices drop, which usually happens in relation with major world events. Without solid knowledge of the day trading software venturing into an investment could be a financial suicide. One suggestion to keep major losses away is to avoid those Forex online currency trading systems that don't reveal their operating methods. Plus, if you are a newbie, don't jump into day trading! When you open the business day, always start from the premises that the system is at its worst.

Subjective judgment is the basis of Forex online currency trading, and working by subjective rules you'll need to invest quite some time into the market analysis.If you operate with a financial automatic tool that registers market fluctuations, you can reduce the time work to some twenty or thirty minutes per day. Then, you can hire a dealer to operate on your behalf or you can work independently. Even with dealers, there is no escape from risks. Avoid working with service vendors that do not reveal their history, operation model and who don't answer your questions.

Fear and greed usually influence the balance in any online currency trading Forex, and calculated investors who don't live by their impulses and carefully analyze transactions will profit most. If you become knowledgeable in Forex online currency trading, you considerably reduce risks and expect great gains. Use Forex charts to identify the price trends and spikes and in time you'll learn how to decode the signs that indicate a turn in the direction of prices. Lots of speculators lose significant sums of money with the market tides, and you'd better not be one of them!

Friday, December 11, 2009

Risk and Your Forex Trading Style

The most important part of any style of investing, is being aware of what level of risk you are comfortable with. Without a good knowledge of this, you will not only tend to over extend yourself but also jeopardize your capital base. Every Forex trading strategy carries its own risk parameters and these tie in directly with your risk tolerance. Then there is your style of trading, conservative, moderate, and aggressive.

Initially you may decide to trade a day chart. The trading movement over a day can be hundreds of pips, so when you protect your position you have to assess what your drawdown parameters are. If your money management stipulates a 3% funds exposure, you will find problems on day charts unless your account is substantial.

The 5M or 30M charts maybe more tradable since the pip variation tends to be less, so your stop strategies can fall within your management range.

Yes, we all want good returns from out trades, but jeopardising ones account to wide stop positions and large draw-downs is going to burn out your account and trading career in the blink of an eye.

A practical risk level is 3% or $300 on a $10,000 account. Convert this to pips, 1 standard lot ($100,000) has a pip value of $10 so if you trade end of day and your stop loss placement, whether count-back or support and resistance or any other, indicates a 100 pip stop position, then you are not risking 3% but 30%! Three adverse trades and your account has vanished!

An aggressive trader is open to taking riskier trades that a conservative trader. They may be prepared to expose larger amounts of money in riskier trades with the hope of achieving larger returns – often over longer trading time frames but they may still use the similar strategies for shorter times as well. Very much the ‘crash and burn’ trader.

So where do you think you sit? Are you a disciplined trader with good money management and risk rates, or a trader that will take high risks for big pips? If you are the latter, you will not be trading for long, that’s a guarantee.

If any of this leaves you a bit bewildered, you need to understand what you are about to do with your hard earned funds, so begin by getting your Forex training with Top Dog Trading, you will learn a considerable amount and it will help you trade with safety to win pips not risk everything.

Monday, December 7, 2009

The Riddle of Forex Brokers

Forex (Foreign Currency Exchange) traders spend a lot of time worrying and talking about their various concerns about the retail brokers they engage to handle their trades. The prevailing assumption is that whenever you attempt to make money in forex you are plying your talent against 'the market' and that's the only competition you should be thinking about. In truth, there is so much more to it; the broker who is honoring your trades can strongly impact your ability to make money.

Bucketshops are agencies who take unfair advantage of their traders by working against them and often by changing the prices they give. Very few agencies will own up to acting this way, mainly because it gives them a powerful incentive to cause their clients to lose. Another phrase often used for such companies is 'Market Makers'. These companies are making the market that their customers trade in, rather than sending their orders on to the broader market. A hard examination of the world of currency, though, reveals that such a policy is actually necessary to making it possible for small retail trades to be placed, and although it is frequently abused, it is not necessarily a nefarious way of doing business.

The reason this is true is because there is no real 'Forex market', like there is for ordinary types of trading. To demonstrate this, company stocks are available only on traditional stock exchanges -- the New York Stock Exchange being one of the most prestigious. Every trade that are executed through exchanges like the American Stock Exchange is cleared under the auspices of the exchange, traded in accordance with the standards of the exchange and moved through brokers that are regulated by the exchange. Stock exchanges set the daily hours for business and have the authority to determine whether any stock or brokerage should be removed or suspended due to policies which run the risk of compromising the overall market. They exist at actual physical addresses and are themselves monitored by government offices.

The Forex market, by contrast, is made up mostly of major organizations that need to swap currency with other nations. They are major players; financial groups and large conglomerates which desire to convert capital from one currency to a different one so that they can trade goods from one country to a different one. Consider when a corporation in Australia markets some products in Canada. The payment will come as CAD, but the business will need to pay for its bills in Australian Dollars. It will need a convenient means to transfer its currencies virtually every business day. Companies like this and the banks they employ to exchange the currency are the real market, and small time traders are incapable of trading in this environment; we simply don't have the significant amounts of capital that would be of interest to the real currency players.

That's why retail Forex brokers trade with their own customers. These brokers can take in smaller trades of the variety we can do, and then they just bundle them together. Then they execute more substantial offsetting trades on the broader market making use of agreements they've made with 'Liquidity Providers'. With our tiny accounts we could never attract the attention of the big time banks. It just wouldn't be reasonable for them.

And so, retail brokers needs to give out price values to its clients, but there's not any central exchange that assures the prices at any given time. A broker must work with prices fed to it by its bank(s) which may not be in tune with the prices provided by other liquidity providers. Those variations are evident in the variation between broker quotes. From this fact arises the necessity for a brokerage to make the market for its clients, not purely from a penchant to screw them (although some few most likely do). Any ethical retail broker will not endeavor to gain from its clients by manipulating prices, but it has to nonetheless take the other side of its customers' trades so that they can honor them.

So, to sum it up, we see that retail brokerages have the need to take the opposite side of all except the most sizable of their clients' trades, however they should not use this to unethically work to their detriment. With these circumstances the Forex speculator - particularly if he is just starting to learn forex - has to look out for his or her own interests. It is important to always carefully watch the price quotes and trade executions of their agency, and to pick that broker sensibly. It would be uncalled-for, though, to conclude that a broker who takes the other side of a client's trades is doing so to screw them. It is an indispensable, if distressing part of the retail foreign exchange business model.