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Training- What a Good Forex Training Program Should Include
Should new Forex traders take Forex trading courses or join a Forex training program? Definitely yes; by now you have probably heard that only 5% of traders achieve consistent profitable results when trading the Forex market. The main reason for this is the lack of education. Don't get me wrong here, taking a Forex training program or a Forex trading course won't guarantee profitable results, nothing can, but choosing the right Forex training program or Forex trading course will definitely put the odds in your favor.
Before spending any amount of money on any Forex trading course or Forex training program there are some important aspects you need to take in consideration. There are many training programs available, but not every one of them suits the needs of every trader.
The first thing you should be looking in a Forex training program is the content of the material. Unfortunately, most courses or training programs focus or spend most of the time on basic concepts. Though these basic concepts are important, spending most of the course on them won't help the trader to make consistent results.
The following subjects are what I consider the most important aspects of trading and every training program or trading course should address:
Forex trading basics.
Review basic concepts such as: margin, type of orders, a little background, bid/ask, rollover, etc. You need to make sure you understand every single concept to perfection.
Main drawbacks of Forex traders.
Being aware of the common mistakes made by Forex traders and knowing how to handle them will prevent new traders from making those mistakes.
Technical and fundamental analysis.
These are the two main approaches adopted by Forex traders. Knowing how to properly apply each concept will definitely put the odds in your favor.
The three pillars of Forex trading. I consider that these three subjects have the most impact on every trader trading account.
Forex trading system development.
Having the right system is a must if you want to have consistent profitable results. Having a system that doesn't fit you will cause a series of problems that will make your trading account vanish away (second guessing the system, not following your system, etc.)
Money management.
This is considered by many successful traders to be the most important single aspect of trading. Money management helps to increase your profits geometrically and at the same time limit your losses (i.e. a good risk reward ratio of about 2:1 will make you money in a Forex trading system that is right only 38% of the time.)
Trading psychology.
Being aware and knowing hot to handle the psychological barriers that affect every trader decision will put the odds in your favor.
Other important aspects every training program should include are:
Developing habits for success (such as discipline patience, taking responsibility of every action, commitment, etc.,) understanding and taking our trading as a business, risk and trade management.
Another important aspect you should take into consideration when choosing a Forex training program is the mechanics of it, getting to know how the training program works.
A good Forex course will have the following:
A live conference room, to apply everything learned under live market conditions.
One-on-one coaching, every trader has different needs and requires special attention. For instance a trader wanting to improve the system and requires individual feedback from the instructor about it.
Online trading course, a course that could be accessible through internet. A plus is a course where you are able to access the course at the convenient time for you, so you don't have to change your lifestyle.
A forum, where members can talk just about everything related to the Forex market and the Forex training program.
Trading the Forex market is no easy task. It requires a lot of hard work. Making the right decision will definitely put the odds in your favor. Take your time when doing your diligence because it is a big and important step in a trader's trading career.
Some Quick Forex Informationforex made easy
I always try to pyramid while position trading medium-term once I am convinced of a new medium-term trend emerging. Like in USD/JPY position trading 135-132 as an initial position, adding in 132 and 129 areas. Same for AUD/USD and EUR/USD with similar strategies. But sitting on positions and watching the counter-rallies costing truck load of money is not easy job to do and causes lots of pain all the time. Most traders even among experienced ones cannot bear that pain and give up too early. But there is no other way to make a big money and we have to bite the bullet and "sit and accumulate" as long as the medium-term trend is intact. That is why I always believe psychological aspects of trading is far more important than anything else in successful trading. A mind game like those bluffing game of poker.
currency convertor
FX traders include governments, corporations and fund managers doing business with foreign countries, that need to exchange one currency for another, and speculators who seek to profit from price movements in the markets.
currency exchange rate
Basic forex pivot point trading is based on two prevailing tendencies. If a day�s price action begins above the pivot point, prices will tend to stay above that point (fulcrum) until it reaches a resistance point. Conversely, if a day�s pricing action begins below the pivot point, the price will tend to stay below that point until it reaches a support point. A resistance level is a price that tends to prevent further upward movement. A support price is a price action point that tends to prevent further downward movement
Forex News StoriesEuropean Morning Update 24th April 2008Thu, 24 Apr 2008 01:21:33 -0400
Dollar slightly firmer in Asian trading
Releases from Japan:
Forecast Actual
February All Industry Activity Index (MoM) - 0.5% - 1.4%
March Corporate Service Price (YoY) +0.7% +0.4%
Japan’s All Industry Activity Index inevitably followed the poor showing in the Tertiary Index earlier in the week with a -1.4% decline in February. Rather surprisingly it has been the weakness in the services sector that has provided the drag with lower spending on financial and insurance services.
However, given the breakdown of the services sector it is clear that the consumer has been limiting spending on services such as retailing, dining and travel which have been hit by loss of confidence and higher energy prices.
However, on the brighter side corporate service prices rose less than forecast. It was the 20th consecutive monthly rise but saw transportation costs rising by less – mainly linked to the higher value of the Yen.
Still, there were price rises going through at the beginning of April and this should maintain the upward pressure over the coming months.
The following economic releases are due today:
March
U.K. Retail Sales (MoM) - 0.3%
U.K. Retail Sales (YoY) +4.3%
U.S. Durable Goods Orders (MoM) +0.1%
U.S. Durable Goods Orders ex transp (MoM) +0.5%
U.S. New Home Sales (MoM) - 1.0%
U.S. New Home Sales 584K
April
French Business Confidence Indicator 108.0
French Production Outlook Indicator - 13.0
Italian Consumer Confidence Index 99.6
German IFO: Business Climate 104.3
German IFO: Current Assessment 111.0
German IFO: Business Climate 98.0
U.K. CBI Quarterly Industrial Trends
U.S. Initial Jobless Claims (19th) 375K
U.S. Continuing Claims (12th) 2960K
Hmmm, no follow-through for the Euro above 1.6018 yesterday and a pullback instead. In normal circumstances I may just feel more confident of having seen the top. However, the rally from the 1.5510 low has been anything but normal and until I see a stronger reversal signal I’d prefer to take the middle road.
The market does still seem to have its bit between the teeth in condemning the Dollar but frankly it really hasn’t performed that badly against the Swissie and Yen. It’s not a one way market by any means just yet at the moment. And the overall technical signals remain with the beginnings of bullish Dollar cycles which should last for the rest of the year…
So it does seem to come down to whether the Euro has satisfied its lust having had its way with 1.60 or whether it’ll go back for one more gloat.
Elsewhere The Pound dropped nicely back towards the 1.9744 low – and may well get there before a small pullback. However I feel there is room for 1.5690-1.5720 before a larger pullback – and if any correlation does return with the Euro then that may be where the latter may attempt to surmount 1.60 again.
And the other pair to watch to provide clues on the Euro is Euro-Yen. That 164.96 resistance held perfectly yesterday from where we have seen initial losses. I’m not sure it will accelerate too much just yet and while I do expect some minor losses at least I still can’t rule out further broad consolidation. However, this should eventually break lower and I suspect on the back of the Euro first. However, I suspect we’ve seen the top here.
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 104.63-90 1.5985-18 1.0249-82 1.9944-72
Res: 104.18-25 1.5914-26 1.0192-20 1.9830-70
Spt: 103.01-21 1.5814-32 1.0103-29 1.9741-70
Spt: 102.32-66 1.5710-65 1.0020-60 1.9690-16
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Forex Pivot Points- Mapping Your Time Frame
It is useful to have a map and be able to see where the price is relative to previous market action. This way we can see how is the sentiment of traders and investors at any given moment, it also gives us a general idea of where the market is heading during the day. This information can help us decide which way to trade.
Pivot points, a technique developed by floor traders, help us see where the price is relative to previous market action.
As a definition, a pivot point is a turning point or condition. The same applies to the Forex market, the pivot point is a level in which the sentiment of the market changes from �bull� to �bear� or vice versa. If the market breaks this level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand, if the market breaks this level down, then the sentiment is bear, and it is expected to continue its way down. Also at this level, the market is expected to have some kind of support/resistance, and if price can't break the pivot point, a possible bounce from it is plausible.
Pivot points work best on highly liquid markets, like the spot currency market, but they can also be used in other markets as well.
Forex Pivot Points
In a few words, pivot point is a level in which the sentiment of traders and investors changes from bull to bear or vice versa.
Why PP work?
They work simply because many individual traders and investors use and trust them, as well as bank and institutional traders. It is known to every trader that the pivot point is an important measure of strength and weakness of any market.
Calculating pivot points
There are several ways to arrive to the Pivot point. The method we found to have the most accurate results is calculated by taking the average of the high, low and close of a previous period (or session).
Pivot point (PP) = (High + Low + Close) / 3
Take for instance the following EUR/USD information from the previous session:
Open: 1.2386
High: 1.2474
Low: 1.2376
Close: 1.2458
The PP would be,
PP = (1.2474 + 1.2376 + 1.2458) / 3 = 1.2439
What does this number tell us?
It simply tells us that if the market is trading above 1.2439, Bulls are winning the battle pushing the prices higher. And if the market is trading below this 1.2439 the bears are winning the battle pulling prices lower. On both cases this condition is likely to sustain until the next session.
Since the Forex market is a 24hr market (no close or open from day to day) there is a eternal battle on deciding at white time we should take the open, close, high and low from each session. From our point of view, the times that produce more accurate predictions is taking the open at 00:00 GMT and the close at 23:59 GMT .
Besides the calculation of the PP, there are other support and resistance levels that are calculated taking the PP as a reference.
Support 1 (S1) = (PP * 2) � H
Resistance 1 (R1) = (PP * 2) - L
Support 2 (S2) = PP � (R1 � S1)
Resistance 2 (R2) = PP + (R1 � S1)
Where , H is the High of the previous period and L is the low of the previous period
Continuing with the example above, PP = 1.2439
S1 = (1.2439 * 2) - 1.2474 = 1.2404
R1 = (1.2439 * 2) � 1.2376 = 1.2502
R2 = 1.2439 + (1.2636 � 1.2537) = 1.2537
S2 = 1.2439 � (1.2636 � 1.2537) = 1.2537
These levels are supposed to mark support and resistance levels for the current session.
On the example above, the PP was calculated using information of the previous session (previous day.) This way we could see possible intraday resistance and support levels. But it can also be calculated using the previous weekly or monthly data to determine such levels. By doing so we are able to see the sentiment over longer periods of time. Also we can see possible levels that might offer support and resistance throughout the week or month. Calculating the Pivot point in a weekly or monthly basis is mostly used by long term traders, but it can also be used by short time traders, it gives us a good idea about the longer term trend.
S1, S2, R1 AND R2...? An Objective Alternative
As already stated, the pivot point zone is a well-known technique and it works simply because many traders and investors use and trust it. But what about the other support and resistance zones (S1, S2, R1 and R2,) to forecast a support or resistance level with some mathematical formula is somehow subjective. It is hard to rely on them blindly just because the formula popped out that level. For this reason, we have created an alternative way to map our time frame, simpler but more objective and effective.
We calculate the pivot point as showed before. But our support and resistance levels are drawn in a different way. We take the previous session high and low, and draw those levels on today's chart. The same is done with the session before the previous session. So, we will have our PP and four more important levels drawn in our chart.
LOPS1, low of the previous session.
HOPS1, high of the previous session.
LOPS2, low of the session before the previous session.
HOPS2, high of the session before the previous session.
PP, pivot point.
These levels will tell us the strength of the market at any given moment. If the market is trading above the PP, then the market is considered in a possible uptrend. If the market is trading above HOPS1 or HOPS2, then the market is in an uptrend, and we only take long positions. If the market is trading below the PP then the market is considered in a possible downtrend. If the market is trading below LOPS1 or LOPS2, then the market is in a downtrend, and we should only consider short trades.
The psychology behind this approach is simple. We know that for some reason the market stopped there from going higher/lower the previous session, or the session before that. We don't know the reason, and we don't need to know it. We only know the fact: the market reversed at that level. We also know that traders and investors have memories, they do remember that the price stopped there before, and the odds are that the market reverses from there again (maybe because the same reason, and maybe not) or at least find some support or resistance at these levels.
What is important about his approach is that support and resistance levels are measured objectively; they aren't just a level derived from a mathematical formula, the price reversed there before so these levels have a higher probability of being effective.
Our mapping method works on both market conditions, when trending and on sideways conditions. In a trending market, it helps us determine the strength of the trend and trade off important levels. On sideways markets it shows us possible reversal levels.
More Thoughts On Forexforex signals
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
foreign exchange students
In the field of Forex trading systems, mechanical trading systems are techniques that make trading decisions for you. You input the trading data, and the system generates a response that indicates the appropriate action. You buy, sell, or do nothing depending upon the formulas this system uses and operates upon. The latest computer versions of these mechanical systems are complete "black box" operations (you cannot have all the emotion involved when you follow a specific system). Perhaps, that is one of the reasons that these systems are called mechanical systems. But that doesn�t mean that they aren�t intelligent enough. Turn the computer on, start the system, and it updates your database, and generates trading recommendations, and places your orders directly to the brokers.
foreign exchange students
When you are trading and investing in any market, including the Forex, you must have the discipline needed to be successful. Although the system is enormous and there is a lot going on that you won't be involved within, you must actively protect your investments. Your investments will not be protected just because they are in the market. A lot can change throughout a day, so you have to always be aware of what is going on in order to be fully protected to your best ability. You should always make logical and researched decisions when trading. It is not a system to use to "get rich quick". It is a serious financial system that can break your pocket if you are not careful.
forex trading signals
For traders, Forex trading provides an alternative to stock market trading. While there are thousands of stocks to choose from, there are only a few major currencies to trade (the Dollar, Yen, British Pound, Swiss Franc, and the Euro are the most popular). Forex trading also provides a lot more leverage than stock trading, and the minimum investment to get started is a lot lower. Add to that the ability to choose flexible trading hours (forex trading goes on 24 hours a day) and you have the reason why so many stock traders have flocked to day trade currencies.
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Your Latest Easy Forex NewsEuropean Morning Update 23rd April 2008Wed, 23 Apr 2008 01:41:53 -0400
Dollar stable before the European PMI numbers
Releases from Australia:
Forecast Actual
Q1 CPI (QoQ) +1.1% +1.3%
Q1 CPI (YoY) +4.0% +4.2%
Q1 RBA Trimmed Mean (QoQ) +0.9% +1.2%
Q1 RBA Trimmed Mean (YoY) +3.8% +4.1%
Q1 RBA Weighted Median (QoQ) +0.9% +1.3%
Q1 RBA Weighted Median (YoY) +4.0% +4.4%
April DEWR Skilled Vacancies (MoM) -2.2% (prior) - 0.8%
April DEWR Skilled Vacancies (YoY) -6.8% (prior) - 3.9%
Not good news for Australia as inflation leapt much more strongly than expected in Q1 with the headline RBA measurements seeing a +4.1% YoY rise in the trimmed mean and a +4.4% rise in the weighted mean. This is well above the RBA’s 3% upper band.
Of course, no prizes in guessing that energy prices fueled the rise. Automotive fuel was up by a hefty 5.4% and even more in pharmaceuticals – a massive 13.1% gain.
The figures brought out the Treasurer Swan who commented that inflation was broad based across the economy and still looks to add to price pressures over the coming months. It boosted the Aussie Dollar to the next resistance point, and a 24 year high at 0.9515 as traders anticipate higher interest rates again.
Releases from Japan:
March Forecast Actual
Merchandise Trade Balance Total JPY 1405bn 1119bn
Adjusted Merchandise Trade Balance JPY 890bn 770bn
And the squeeze on Japanese exports continues… March saw the adjusted trade balance fail to reach forecasts returning a 770bn surplus. This is an annual decline of 30.2%. Of course, no prizes in guessing that energy prices fueled the rise in imports. Overall imports have risen by 11.1% YoY while export growth has dipped to +2.3% YoY as U.S. demand fell again for the 7th consecutive month.
The following economic releases are due today:
February
Italian Retail Sales (MoM) - 0.1%
Italian Retail Sales (YoY) +0.6%
Euro-zone Industrial New Orders (MoM) - 0.4%
Euro-zone Industrial New Orders (YoY) +5.7%
March
French Consumer Spending (MoM) - 0.3%
French Consumer Spending (MoM) +2.8%
April
French Manufacturing PMI (P) 51.6
French Services PMI (P) 56.8
German Manufacturing PMI (P) 54.8
German Services PMI (P) 51.5
Euro-zone Manufacturing PMI (P) 51.6
Euro-zone Services PMI (P) 51.4
Euro-zone Composite PMI (P) 51.5
The Bank of England minutes are due to be released
Euro 1.60 has finally been achieved and the divergence between this and the Swissie is quite clear. Still we haven’t seen the latter move back to even retest the 0.9870 corrective low. The same goes for Dollar-Yen where losses have been limited.
So we continue to watch the target I have outlined as being a potential top – at 1.6065 – to see if this can be the final high for the year. Technically just about all pieces fit – bottoming Dollar cycles, weekly, daily and now intra-day indicators are displaying Dollar bullish divergences. There is perhaps just a little lack of divergence in the 4-hour chart but otherwise perfect.
Now all that we need is a catalyst and this is where we need to be alert. Clearly there aren’t many who feel comfortable buying Dollars so it hardly seems to be a suitable time to buy Dollars and close your eyes. However, it wouldn’t do to totally ignore the technical signals either.
If there was any news overnight that really hasn’t been discounted then it was the fact that the fifth German bank was taken under the control of the Bundesbank yesterday suffering from lack of liquidity under the weight of its property loans. Add to that the U.K.’s second largest bank having to go cap in hand to its shareholders to ask for a massive GBP12bn to replenish its capital.
Tough times indeed. The biggest problem I see facing the global economy is the diversion of consumer budgets to pay for increased energy and food prices and leaving less for “real economy” products. That is something facing the entire world and not just the States.
As a caveat on the Dollar bottom which I have been pointing out should be coming, these technical conditions are ripe for a reversal. However, they always require confirmation. What can happen at these times is a break of supports which allows the underlying trend to resume – and normally quite aggressively. Thus while I remain more bullish than bearish, given the situation there are greater risks than normal to this type of outlook.
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 103.92-05 1.6110-56 1.0161-07 2.0047-69
Res: 103.27-59 1.6042-71 1.0065-82 1.9997-25
Spt: 102.32-66 1.5932-45 0.9966-96 1.9880-98
Spt: 101.50-77 1.5840-86 0.9846-70 1.9785-04
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