A Few Ways To Check If Your Trading Strategy Is Really Successful

You've finally settled on a trading strategy. But how do you know it's actually successful? Well, luckily, there are a few ways. Here are two:

1.) Back-Testing

Back-testing is a method of testing which will run your strategy against prior time periods. Basically, you're performing a simulation: you use your strategy with relevant past data to test its effectiveness. By using the historical data, you're saving a ton of time; if you tried to test your strategy by applying it to the time periods yet to come, it might take you years. The effectiveness of back-testing relies on the theory that what has happened in the past WILL happen again in the future.

2.) Paper Trading

Paper trading is a method of "risk-free" trading. Basically, you set up a dummy account, through which you can test your trading strategy with paper money. There are two methods to this: you can either pretend to buy and sell stocks, bonds, commodities, etc., and keep track of your profits and losses on paper, or you can open an account online, usually through your broker (and usually for free).

This is a fantastic way for traders to kill a whole tree full of birds with one stone. First off, you'll learn the tricks of the trade without putting your own money at risk. Second, you'll be able to gain some much-needed confidence when it comes to maneuvering in the markets. And third, you'll be able to test out your trading strategy in real-time simulation.

This is probably the best way to test a trading strategy, since it doesn't rely on historical data. On the other hand, it's the most time-consuming strategy, since it might take weeks or months until you have enough data for a statistically relevant performance report.

When testing a strategy, keep in mind that markets change.

When back-testing, there are definitely things you need to be aware of. It's not enough to just run a strategy on as much data as possible; it's important to know the underlying market conditions.

Either method of evaluating your strategy will require time and effort, but both will pay off in the long run.

Day Trading Timeframes

Day Trading 101: when you begin trading, you'll need a strategy. And part of that strategy will include the timeframe that you use for your trades. Obviously, for day trading, your timeframe will be less than one day.

Popular intraday timeframes are 60-minute, 30-minute, 15-minute, 10-minute, 5-minute, 3-minute, and 1-minute.

When you select a smaller timeframe (less than 60 minutes), usually your average profit per trade is relatively low. On the other hand, you get more trading opportunities. When trading on a larger timeframe, your average profit per trade will be bigger, but you'll have fewer trading opportunities.

Smaller timeframes mean smaller profits, but usually smaller risk, too. When you're starting with a small trading account, you might want to select a small timeframe to make sure that you're not over-leveraging your account.

However, when selecting a very small timeframe like 1-minute, 3-minute, or 5-minute, you may experience a lot of "noise" that is cause by hedge funds, by scalpers, and by automated trading.

You might think that you see an emerging trend just to realize that it was only a short manipulated move and that the trend is over as soon as you enter the market.

That's why I recommend using 15-minute charts. This timeframe is small enough for you to capture the nice intraday moves, but it's big enough to eliminate the noise in the market and correctly displays the "true trends."

When developing a trading strategy, you should always experiment with different timeframes. A trading strategy that doesn't work on a small timeframe might work on a larger timeframe and vice versa.

Start developing your trading strategy using 15-minute charts, and if you're unhappy with the results, change the timeframe first before changing the entry or exit rules.

Forex Trading Tips - Some Things To Keep In Mind

A bit of nerve, a bit of research and some handy Forex trading tips, and you could have a steady income every month through Forex trading. It is an intriguing opportunity and one that will be worth your while if you are willing to put in the time.

Time and research are very important, but the one thing that can give you an extra edge are reliable Forex trading tips. They do not only refer to the good deals and the good bets, and which the good investments are, but also refer to how to set yourself up and then stay calm, efficient and cool through the whole process which can be nerve wracking if you are not organized enough. So let us take a look at some of the easy and simple but essential things that you can do - some very simple Forex trading tips.

First and foremost, start with paper trading before you make the big leap. This is a very valuable Forex trading tip, and one that everyone starting out must adhere to. You might know the way the market swings in theory, but actual trading needs a lot of practice. Paper trading can help you settle on a strategy and see how it would work out in reality without risking losses.

Once you take the step up from paper trading, you have to make sure that you do not get carried away. Keep a check on yourself for a year - a year might seem like a long time, but it is no longer than necessary. The foreign currency market fluctuations will not give you any real sense of your financial situation in less time than that.

Making the change from paper trading to trading with real money can be difficult. One of the best Forex trading tips you can get in that situation is to keep your nerve steady. You have ample practice with paper trading, you have perfected your technique. If you find yourself hesitating because you feel a bit wary at all the money you stand to lose, stop for a moment and consider what you would have done if you were still paper trading. Then stick to your plan.

Make sure your accounts are in order. After each trade, check your account, make sure it was logged. Your records have to be in order for you to know what your position is.

The most important Forex trading tip you have to keep in mind is to not get emotionally involved and get rattled - keep the big picture in mind, take profit and loss in your stride and follow your plan.

Visit my blog for a handful of practical and valuable Forex trading tips and techniques.

Making Sure Your Trading Plan Works - The Ten Power Principles (Part 1)

Having a trading plan is like having a solid blueprint to build your home, or having a map when traveling to a new location. Even a professional trader won't survive in the markets without a good trading plan.

And once you've defined your goals and created your trading plan, you need to make sure it really works. So far, everything might look great, but how can you be sure that the system works when you start trading it with real money?

Evaluating a trading strategy is easier than you think. You just need to use the 10 Principles of Successful Trading Strategies. Below you'll find numbers 1-5.

Principle #1: Use Few Rules - Make It Easy to Understand

It may surprise you that the best trading systems have less than ten rules. The more rules you have, the more likely that you've "curve-fitted" your trading strategy to past data, and such an over-optimized system is very unlikely to produce profits in real markets.

It's important that your rules are easy to understand and execute. The markets can behave very wildly and move very fast, and you won't have time to calculate complicated formulas in order to make a trading decision. Think about successful floor traders: the only tool they use is a calculator, and they make thousands of dollars every day.

Principle #2: Trade Electronic and Liquid Markets

I strongly recommend that you trade electronic markets, because commissions are lower and you receive instant fills. You need to know as fast as possible if your order was filled and at what price, because you plan your exit based on this information.

When trading electronic markets, you receive your fills in less than one second and can immediately place your exit orders. Trading liquid markets means you can avoid slippage, which will save you hundreds or even thousands of dollars.

Most futures markets, all forex currency pairs, and the major U.S. stock markets are trading electronically.

Principle #3: Have Realistic Expectations

Losses are part of our business. A trading system that doesn't have losses is "too good to be true." Recently, I ran into a trading system with a whopping winning percentage of 91% and a drawdown of less than $500!

When I looked at the details, though, it turned out the system was only tested on 87 trades and - of course - it was curve-fitted. If you run across a trading system with numbers too good to be true, then it's probably exactly THAT: too good to be true.

Usually you can expect the following from a robust trading system:

1.) A winning percentage of 60-80%

2.) A profit factor of 1.3-2.5

3.) A maximum drawdown of 10-20% of the yearly profit

Use these numbers as a rough guideline, and you'll easily identify curve-fitted systems.

Principle #4: Maintain a Healthy Balance Between Risk and Reward

Let me give you an example: if you go to a casino and bet everything you have on "red," then you have a 49% chance of doubling your money and a 51% chance of losing everything. The same applies to trading: you can make a lot of money if you're risking a lot, but if you do, the risk of ruin is also high. You need to find a healthy balance between risk and reward.

Make sure your trading strategy is using small stop losses and that your profit targets are bigger than your stop losses. The perfect balance between risk and reward is 1:1.5 or more - i.e. for every dollar you risk you should be able to make at least $1.50.

Principle #5: Find a System That Produces at Least Five Trades per Week

The higher your trading frequency, the smaller your chances of having a losing month. If you have a trading strategy that has a winning percentage of 70%, but only produces one trade per month, then one loser is enough to have a losing month. In this example, you could have several losing months in a row before you finally start making profits.

In the meantime, how do you pay your bills?

If your trading strategy produces five trades per week, then you have on average 20 trades per month. If you have a winning percentage of 70%, then your chances of a winning month are extremely high.

And that's the goal of all traders: having as many winning months as possible!

The Ins and Outs of Performance Reports (Part 2)

Every trader should test the trading strategy that they're using. And, while testing your trading strategy, you should keep detailed records of the wins and losses in order to produce a performance report. Many software packages can help you with that, but a simple excel sheet will do the trick just as well.

Below are three things crucial to every performance report.

Average Winning Trade and Average Losing Trade

The average winning trade should be bigger than the average losing trade. If you can keep your wins larger than your losses, then you'll make money even if you just have a 50% winning percentage. And every trader should be able to achieve that. If you can't, reverse your entry signals as described previously.

Profit Factor

The profit factor will tell you how many dollars you're likely to win for every dollar you lose. The higher the profit factor, the better the system. A system should have a profit factor of 1.5 or more, but watch out when you see profit factors above 3.0, because it might be that the system is over-optimized.

Maximum Drawdown

The maximum drawdown is the lowest point your account reaches between peaks.

Let me explain:

Imagine that you start your trading account with $10,000, and, after a few trades, you lose $2,000. Your drawdown would be 20%.

Now, let's say you make more trades and gain $4,000, which brings you to $12,000 ($8,000 + $4,000 = $12,000). And after this, on the next trade, you lose $2,000. Your drawdown would be 16.7% ($12,000 - $2,000). The $12,000 was your equity peak; that was the highest point in the period we looked at.

If you started your account with $10,000 and the lowest amount you had in your account over a six-month period was $5,000, then you had a 50% drawdown.

You would need to make $5,000 from the lowest point in order to recoup your losses. Even though you lost 50% from your high of $10,000, you would need to make 100% on the $5,000 to get back to your original amount.

Conclusion

The above examples provide you with some guidelines, but it's up to you to decide whether the numbers in the strategy's performance report work for you or don't.

Ultimately, YOU'RE the one trading the strategy, and YOU'RE the one who has to feel comfortable with the expected results of your strategy.

6 Tips On How To Find The Best Forex Trading Brokers

There are just too many forex trading brokers in the market but only a few are truly competent and effective. Investment wise, it should always be your goal to identify and find the best brokers there are if you want to make sure your foreign exchange trading initiative would certainly be successful. Choosing the right and appropriate trading brokers is very essential in ensuring the overall viability and success of your investment efforts.

Here are six guidelines on how you could find and transact with the best forex trading brokers in the market.

1. Look for brokers who offer spreads around 3 to 5 pips. Spreads should always be kept tight and competitive particularly for frequent trading.

2. Choose brokers who are facilitating online payments and transactions. At the same time, make sure online transactions are always safe and secured. Doing so would help ensure that your Forex account can take online payments.

3. Trading brokers should guarantee loss protection. Thus, good brokers are those offering leverage, which is the main reason why investors are basically lured by currency trading. Potential profits can be maximized if the trading broker would be able to guarantee a minimum leverage of about 200:1. Likewise, forex trading brokers offering leverage of about 400:1 are great finds and should be hired at once.

4. A good trade broker would allow small time investors to trade in currency. Thus, if you could find brokers offering a trading account for as low as $100 should be commended. However, caution should of course be practiced when choosing such brokers.

5. The best brokers are those using a good and effective trading platform. If you are aiming for reliability and ease of usage or functions, you should go for those with popular and proven effective trading systems and platforms. Good brokers are also those that develop and maintain their own platforms.

6. Lastly, the best brokers are those who are highly educational. By this, it means that the broker of your choice should be able to orient you well and little by little educate and familiarize you better about foreign exchange trading. Such brokers are apparently resourceful and are informative. You could infer that in times when you will need important and useful information, such forex trading brokers would always be readily available to assist and guide you.

Cherry Picking Stocks and Stock Scanning

Modern examples of cherry picking are all over the street. Investors follow large institutions and investors like Warren Buffett, who is known for quality trades. Cherry picking is simply following the trades of a profitable trader or institution that has a long history of trading success. For the cherry picker, trading structure is based around the proven techniques and strategies of other investors. Cherry picking provides easy profits in both bear and bull markets. Professional traders are quick to follow the advice of other professional traders.

Following the Big Names

When firms like Berkshire Hathaway take positions, investors follow suit and invest in the same company with minimal research of their own. Rather than using their own investment techniques and strategies, they rely on the track records of other investors. When word hits that Warren Buffett made a sizable investment in a company, various firms are quick to follow and rapidly push up prices. Day traders and swing traders also make large amounts of money by following the advice of TV personalities like Jim Cramer by entering a position based on his take, as other investors will likely follow suit.

Save Time on Researching

Cherry picking can be used to make quality trades without using technical analysis or studying the business. Cherry picking saves time for the swing trader who would rather rely on the history of others than use their own algorithms to define worthy investments. A cherry picking strategy is usually profitable for swing traders in both the short and long terms; short-term volume pushes the stock prices up, while history's best investors rarely make terrible long-term trades.

Cherry picking can also be used much like momentum trading, or buying stocks that have already done very well. A quick look at a mutual fund prospectus will show the best performing stocks out of an already good list of investments. The cherry picker thinks that the stock is likely to do even better because the stock is doing the best out of stocks that were already heavily researched. Cherry picking is like picking a lawyer from Harvard, knowing they're the best in the business without checking out the credentials of the particular individual.

Shop at the Bottom

In much the same way, cherry pickers also find stocks that have bottomed. Mutual funds only take quality trades that have been well researched and studied. If a stock has tanked since the fund made an investment, sentiment would be that the company is even more of a buy at its deflated price than it was when the fund invested. Swing traders and day traders find it easy to profit when the prices are already deflated and ready for a big run.

Finding Chart Patterns That Can Lead To Big Profits

Professional traders have their own set of patterns and indices they use to predict the markets. Profitable traders are aware enough to generate a profit in nearly every market. Sideways trends, up-trends, and even down-trends can all be profitable with the proper tools and investment strategy. Creative techniques will help you preserve trading capital while generating huge profits. To master day trading, you must first understand the basic chart patterns.

The Double Top and Bottom

The best and easiest chart pattern to recognize is the double top or double bottom. It is marked by two consecutive peaks or dips in price to about the same level. This chart pattern works because the first movement tests new boundaries, and then investors take profit and push the price down. Then investors re-enter and push the market again to test its new area, while the market again corrects - although this time, there is usually plenty of buying or selling interest that is removed by the large price movements, and the price either tops or bottoms. When the price moves to a position twice, it encounters plenty of orders that were left at the last peak. On a double top, seller sentiment is extremely high, and investors are looking to short the stock hard. Very rarely do people buy when they see a double top, further compounding the move.

Flagging Trendlines

Pennant flags are also a very identifiable charting pattern. A pennant flag is a sideways trend that forms where two trendlines meet. When two trendlines touch, buying and selling pressure battle each other out and usually end in a huge downtrend or uptrend immediately following the breakout. Professional traders have developed very popular strategies such as "straddling" a position, or placing a short order below the pennant and a long order above the pennant. When the breakout does happen, in either direction, a trader will automatically enter a position and profit from the breakout.

Head And Shoulders are Important

Head and shoulder patterns are also very popular with professional traders. A head and shoulder formation is created when the stock makes a three topped chart, with one high peak in the middle surrounded by two lower peaks on each side. These usually mark a downtrend at the top of a chart and an uptrend when found upside down at the bottom of a chart. The head and shoulders shows large buying strength that eventually tapers off as investors take a profit.

Reading charts are important in finding profitable opportunities in the market. Developing your ability to recognize patterns is key to growing a portfolio.

Automatic Forex Trading - Use These Simple Tips To Pick The Best Trading Systems

Automatic trading software is seen by many as a great way to trade forex markets. It requires no previous experience, is very time efficient and the good ones can build long term. How do you choose the ones that make money let's find out...

The first point to make is that most of the automatic forex trading software on the net simply won't make you money, if you think you are going to get rich for the price of a night out your mistaken.

Forex trading is not east that's why 95% of traders lose money and while automatic trading software can work you need to be very careful in how you choose one and this is what were going to look at now

First - if you see great advertising copy which looks to good to true it probably is and chances are you will also see the warning below NEVER consider software with this on it here it is:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

These track records are not worth the paper their written on - there made up knowing the closing data and that's easy.

I made the mistake 20 years ago of buying software that claimed 100,000 in profits quickly and bought it for under $100.00 -, now looking back I found the old sales copy (which was great) but also the disclaimer but of course being new to the industry and nave I bought it without considering that it was so cheap and hadn't been traded.

Huge numbers of traders make this mistake and it is guaranteed to lose you money so beware of the disclaimer.

Just think to yourself - if the vendor hasn't had the courage to trade his own software why should you and why if its that good are you being told about it and offered it so cheap? You know the answer now!

What you need to do is look around for software which has either been independently tracked by third party or has been traded for real with an audited track record and that means broker account statements

These software packages will tend to be in the $1 - 10,000 + range and many are well capable of producing more than there cost - but again be careful, only buy ones you understand the logic of and you have confidence to follow.

If you don't have confidence - you won't have the discipline to stick with them through losing periods and will throw in the towel when you hit a few losses. Keep in mind if you don't have the discipline you may as well not have bothered buying one.

Automatic forex trading systems are all the rage today but stop to think before you buy and do your homework and make sure you find one that's tested, you have confidence in and can follow with discipline - if you do that you have a good chance of making some great forex profits.

Forex Education - How Ordinary People Became Millionaire Traders After 2 Weeks

In the late eighties I was reading the excellent book "Market Wizards" by Jack Shwager and was fascinated by a story of how ordinary people were taught to trade in just 14 days and went on to make hundreds of millions of dollars. How was it possible? Let's take a look at the legendary story of the turtles.

Trading legend Richard Dennis was having a debate with his business partner and was trying to convince him anyone could be taught to trade, providing they had the right mindset and education. His partner disagreed and felt trading was a god given gift - Dennis set out to prove him wrong.

He gathered a diverse group of people together, from all walks of life who only had one thing in common - they had never traded before. They were a very diverse group and ranged from a security guard, to a female auditor to a boy just finishing high school.

He then taught them to trade. After 14 days, they were all given trading accounts and real money and the rest is history. This group went on to make hundreds of millions of dollars and become trading legends.

So what can you learn from the story?

The first point is - trading success is open to anyone and all the basics of trading success can be learned. Sure, you may not become as rich as this group but there is a big difference between something being impossible and something that can be achieved.

I personally found the story an inspiration and it was one of the major reasons I opened a trading account.

The other point from the turtle story is that simple trading systems work.

The system taught was very simple (a basic long term following breakout method) and of course all the students learned it in just 14 days. So complex systems, you can forget - keep it simple!

The reason Simple systems work is, they are more robust in the brutal real world of trading than complex ones, whose numerous elements snap under the pressure of volatility.

Dennis of course knew that having a simple trading system was all well and good - but you have to follow it with discipline and employ strict money management criteria to win and this point was rammed home to his pupils.

The problem for most traders is learning methods is easy, applying them is hard, very, hard and if you think its easy you are not a trader.

The Problem is you need to keep applying a system with discipline, even when its taking loss after loss and the market is making you look stupid. This is tough furthermore, and just as important, you have to hold your winners as open equity continually eats your open profit - again this is hard.

If you have confidence in your system and know why it works long term you can acquire discipline like the turtles were, just be prepared for some mental turmoil.

The story should be required reading for any budding trader and in addition to the information in Market Wizards, check out the book - Way Of The Turtle by Curtis Faith, the most successful turtle of all. He gives you all the info on the experiment, the system and his experience, so you have a great view from the inside.

Like I said earlier, you probably wont make as much money as the turtles - but maybe, just maybe, with the right forex education and a burning desire to succeed you could do very well and remember:

Everything about trading can be learned.

Do you have the desire to succeed and a willingness to get the right forex education?

Then try forex trading and see, currency trading success could be within your grasp

Good luck!

10 Easy Steps To A More Productive Trading Day

Being a successful market trader can encompass your entire life. The market bell may sound before your morning coffee is ready, and it runs through your lunchtime. When the day is over, you may be too exhausted to even heat up that gourmet dinner. By taking 10 easy steps, however, you can ensure that your mind, body, and portfolio are enjoying a more productive trading day.

1. Turn Off the TV - The TV may provide some financial information, but can be very distracting. Turning down the volume or putting it in an out of sight location will help you focus on day trading. Your trading style can easily be affected by the things you're hearing without you even knowing.

2. Keep in Touch - Skill-building activities will help you stay in the state of mind you need to be profitable. An online home study course is a great tool to get away from the stresses of trading and to learn more about trading. Leveraging your down time into something productive will yield better results.

3. NetWorking - The secrets of profitable traders can only be learned by networking. Indeed, in the financial market, the phrase, "it isn't what you can do but who you know" still reigns true. Professional traders usually know someone who trades and talks to them to bounce off trading ideas and strategies.

4. Take a Lunch - Don't keep yourself tied down to your trade station. Resuming normal activities, such as taking a lunch then a brief break, will make life more normal. Day trading is stressful, and you need the time off to unwind.

5. Look for Quality Trades - Consistent profits don't come from taking every single trade. You need to force yourself to make only quality trades to cut down on commissions and the stress that comes with many open positions.

6. Develop a Trading Plan - Develop a trading plan for certain markets. It is always wise to have your trading plan down on paper so that you instantly see it and act accordingly. If you have extra time, fine tune your strategy with a trading plan planner for certain market conditions. The time investment more than pays off in your portfolio returns.

7. Day Trading Is Not Investing - You're not buying for the long haul so plan your investments around the current time. Avoid stressful situations by selling before the market close. Holding positions overnight is a quick way to wreck your trading capital.

8. Trade With the Market - Only take positions that go with the overall market. If the decliners are outpacing the advancers, it probably wouldn't be a good time to go long, regardless of how great the trade looks.

9. Avoid the News - A complete trading plan should touch on topics such as news events and other large market movers. However, avoiding the daily news will keep random variables from hurting your capital and make you a more productive trader.

10. Take Days Off - If you need to, take a day off from trading to relax. Stressful traders are not productive traders.

Online Future Trading Systems - How I Nearly Lost My Shirt

Does your trading story read like mine? For the first twelve to fifteen years in the business, I read every book I could lay my hands on. I attended seminars and day trading courses, and invested in software programs to help devise my own "mother of all trading systems".

But what I did manage to develop was a smaller bank account. And I am not even complaining about the time I lost. Nothing worked; the books, seminars, programs, indicators, and most commodity trading software and systems are all limited in their use. They all trade behind the market movement.

What You Should Look For In A Good Commodity Trading System

What eventually matters is learning to read the price of the commodity you trade in. The truly successful traders make profitable calls, consistently, without using indicators or studies, often resulting in ten point trades and more. They call trades in real time and most entries are called well in advance of the market movement.

Make sure that the commodity future online trading system you rely on works under any market condition. Also, you should be able to use it for any future, commodity, or stock trading, including E-mini day trading.

What Future You Should Trade

My personal recommendation is to trade a future that allows you to day trade even if you're only an individual without much liquidity.

Any future will give you sufficient leverage and you have many to choose from - the same futures traded by large institutions. At the same time, it must not cost you the earth for a contract. Most importantly, it should not involve investing hundreds of hours in research, or employing stock screeners or revewing charts in every time frame.

You should be able to fill the contracts immediately, and the market should usually move favorably.

How A Good System Could Make All The Difference For You

A good system will teach you to read the charts like a book. Once you see such a system and understand it, you will wonder why you had never noticed it before; admittedly, it isn't easy to see unless it is pointed out to you. And when it is, a whole new world of trading opens up to you.

Day trading, which seems so complicated, can be very easy. You can have fun making great money in future system trading, without any of the stress and worry normally associated with day trading. It's all in knowing how to read the charts and if you learn enough, you can become a successful trader for the rest of your life.

As I told you at the start of this article, even my best day trading strategy only resulted in my losing money on the market. Until I found this program. It is not the Holy Grail, but it is the closest thing to it I have found.

How To Be Sure The System Is Really Good

There are a lot of commodity trading advisors who claim they have fool-proof commodity trading software. Always remember that the proof of the cake is in the eating. The next time you hear about a wonderful online future trading system, tell the vendors you want to look at their trading record.

How much money have they made on the open market, over a reasonably long time-span? Do their traders average ten points a day? Would they allow you to watch them call the market in real time in advance of the market movement with any level of accuracy? Would they give you a free trial?

If you venture into day trading online without having clear answers to these questions, you run the risk of losing your shirt, like I nearly did.

Day Trading Stock Tips And Lessons - Networking With Trading Industry Participants

Here is a day trading stock tip not often mentioned: networking. With the advances in technologies, lowered commissions, and certain "edges" no longer effective in the day trading industry, consider networking as often as possible.

One of the appeals of day trading is that you do not have to deal with people very often. Once your account, computer, software, and strategies are all established all you have to do is flip on your computer and trade all day. Many day traders who trade from home or the office enjoy not dealing with the headaches and problems brought by dealing with others during the work day. While this is appealing, be sure to network with like-minded traders every once in a while as you will pick up useful knowledge in one way or another!

Here are just some of the benefits to this day trading stock tip:

• You might meet a possible mentor who will help you get to the next level
• You might find a new strategy to help you in case your current strategies are underperforming
• You might hear about a new way someone used a chapter in a trading book you own
• You can discover if another firm has lower commissions and/or better software
• You could hear about possible industry changes which might affect your trading style

In all, networking with other day trading industry participants gives you a chance to better understand what you are doing right or ways in which you can improve. If there are no industry groups in your area then join one of the respected online forums; and consider traveling to day trading events around the country.

Trade Forex On Autopilot Beware Of Curve Fitting Or Lose

There are numerous systems that will tell you that you can follow the signals they generate and make similar gains to the track records they show. There is a problem with most of them and that's curve fitting which, means most forex robots lose - lets take a look at it.

Curve fitting is when a vendor simply runs system rules across back data and bends the rules to make a profit.

It's of course easy to make a profit in hindsight, as you know what happened and we can all make money if we know the prices in advance however, it's much harder going forward not knowing them!

Most systems worth their salt, will have been traded and have a real time track record presented with them. This doesn't mean the system will win in future, as past performance never guarantees future results - but it at least it gives you confidence the system is on soundly based logic.

If you see any forex robot that has track record that looks good, look for the disclaimer below and if you see it pass it by - it's unlikely to make you money and about 99% you see will have it - here it is:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

Many traders simply don't bother reading the above, or ignore it totally.

Keep in mind if you are putting your equity in the hands of a forex robot or automated trading system, surely it's a good idea to at least make sure someone has traded it?

The problem is most vendors who sell these robots curve fit them and as no two portions of data ever replicate themselves exactly, there doomed to lose in the real brutal world of trading.

Forget hyped copy and simulated track records and look for one with a real time track record.

Once you have found one, make sure you know how it works and that you have confidence in its ability to make money. If you don't know how it works and have confidence, you won't have the discipline to follow your chosen forex trading system with discipline and without the discipline to follow your system, you don't have one!

There are some good systems out there will real time track records (or at least independently tracked ones) which can and do make money. You're probably looking in the price range of $1 - $10,000 for a decent one and they will pay for themselves many times over if you do your homework on them.

Trading forex on autopilot is great idea in theory - but beware of the curve fitted, simulated track record ones that are cheap with track records that look to good to be true - they are. Be realistic, be sensible and take your time choosing the right forex robot for you.

Some Simple, Yet Effective Forex Trading Techniques

Experts will always assert that one of the surest ways to succeed in currency trading is knowing and implementing forex trading techniques. Foreign exchange is truly a dynamic and demanding investment avenue and there is the need to understand and truly comprehend such trading if you want to make your capital grow from it.

What are forex trading techniques? To begin with, such strategies are special and are schematic processes or styles of trading that are designed and implemented with the principal aim of generating higher revenue or income. Just like in any other form of trading, there is also a need to know and implement proper and working techniques to make your money grow through currency trading. Thus, it would be helpful if you would be familiar with several simple, yet proven effective forex trading techniques.

The first simple technique would be buying low, selling high. In general, this is the principal principle that should be practiced. Through this, investors should always strive to buy currencies that have lower values than what your currency form is. Thus, you would realize that you are actually making your capital valuation instantly. Then, you should wait for sometime until that currency appreciates and when it does, it would be the perfect time to sell it, which would return your money into your base currency, but this time in higher value.

Another simple technique is to convert your capital into US dollar as a base currency. If you are already having the dollar as a base currency, you could stick to it, but otherwise, it would be advisable if you convert into dollar. From there, you could easily convert into other currencies. Almost all currencies have direct dollar conversion rate, making it easier for traders to determine and actually run transactions.

Lastly, trade currency based on to market and economic factors. This technique employs the value of research about the factors and risks of the economy of particular countries. For example, if you want to trade into Japanese yen, it would be helpful if you would first understand what is going on in the business environment in Japan. This way, you could easily foretell if your converted money would rise or fall.

As an investor or trader, it should always be your goal to make your capital grow. Know and adopt effective forex trading techniques and see how your money could attain its real growth potential in no time.

5 Guidelines For Evaluating Your Trading As A Business

Trading is just as much of a business as any other industry. Treating what you do as a business will help you improve your trading, allowing you to trade with less emotion. Constantly set trading goals to work towards, just as you would create goals for any business. Here are a few tips to improve your trading as a business, helping you reach your trading goals.

1. Your Trading Plan is Your Business Plan - Your complete trading plan is much like a business plan. Included in your trading plan planner should be a concrete statement on how to generate profits and your specific strategies. Much like your own business, you should have a plan in place to reach your trading goals. Setting swing or day trading goals is critical to producing consistent profits and staying "in business."

2. Profit Loss Sheets - Bookkeeping may come second to technical analysis and e-mini futures, but it is just as important as day and swing trading itself. You should prepare a profit or loss statement every month and track where you've made money and lost money. If you're finding yourself losing money in the 10 am - 2 pm period of the trading day, you might consider closing up shop during that time.

3. Have a Routine - If you were going to the office every day, you wouldn't go in sweatpants and a t-shirt. You should be dressing the way you want to perform. Getting up early and getting ready just like you would for any other occupation will keep your mind in the game and bring in consistent earnings. You need to treat yourself the same as you would with a business. Set a trading goal for each day and strive to reach it with profitable trading strategies.

4. Use Profits to Grow - Businesses need more capital to expand and make more money and so does your portfolio. Spending a few extra dollars on advanced trading techniques, tools, and strategies will help you be a better trader. Mark each expenditure against the value of your trading portfolio as you would against the bank account of your business. Each investment is an investment in yourself, and it is also tax-deductible, just like any other business expense.

5. You're Buying and Selling a Product - Shares of stocks are products just like an article of clothing or a pound of carrots. Trading is buying and selling a stock for a profit, much like owning a business is buying and selling a product for a profit. Think of each stock like a product; you might have to have "sales" to get rid of extra holdings or to cut losses, but it is all a part of running a business.

Organizing your trading life like your business increases your probability of market success. When you take time to manage your business, invest in your business, and treat yourself professionally, these are the tools to make consistent profits.

Forex Trading Education - Do You Really Need To Be Educated In Forex Trading?

Forex trading education is for sure the best and only road to take when trading foreign exchange. As a trader or investor, you should thoroughly and effectively learn how the currency market tick. As you see and understand, currency trading is not about guessing over which currencies will rise and fall and where to lead investments of capital. More importantly, foreign exchange trading involved your money, which could grow and further accumulate on sound and effective investment techniques and strategies or deteriorate, deplete and be gone due to unwise and unprofitable trading practices.

There are many advantages of taking a proper forex trading education. First of all, currency trading is a dynamic market practice. That is the reason why you should understand the market better as well as all the influencing and affecting factors that dictate how the market behaves. Forex trading is a profitable, yet risky investment activity than can make or break an investor and a trader. Without basic market knowledge, it is important to make and implement sensitive and wise decisions, which are necessary when aiming to make the capital grow.

Forex trading education helps investors and traders get to know, pick and actually use functional and helpful tools and technologies for currency trading. There are many foreign exchange trading platforms and systems that are abounding in the market. Choosing the right and appropriate one always entails having the right knowledge and information about such an activity.

Currency trading is all about bidding and closing deals. As such, there is a need to learn and practice how to read various useful charts and documentary reports. There are published information, which could not be used and utilized appropriately if the user is not educated enough about the perks and risks associated to currency investment.

Surely, getting the knowledge and skill about correctly reading and interpreting forex charts and information is very important when aiming to progress in foreign exchange markets. As such, wise and patient people are always favored. Without the proper education and trading, how could anyone be able to protect and maintain his own investments and overall investment welfare.

Begin by learning elementary concepts about forex trading. Thus, such trading is always prioritized and recognized. It would be hard to imagine living without much savings for the future, especially for workers with limited access to cash and capital. Forex trading education is very popular these days especially for workers and immigrants who would endure being away from families and friends.

Introduction to Commodity Pyramid Trading

This article discusses the how to to profit from commodity pyramid trading.

These key points will help you learn this technique:

1. What is Commodity Pyramid Trading?


2. Commodity Pillar Trading Comparison


3. Commodity Pyramid Trading Comparison


4. Commodity Pyramid Trading Useful Tips

1. What is Commodity Pyramid Trading?

This is a method of trading commodity futures contracts in such a way that when the profit from a single trade equals the current margin for the commodity, the profit is used to self-finance an additional futures contract. This self-financing process can take either of two methods: Pillar trading or Pyramid trading.

The Pillar trading method involves adding one futures contract to your position during each self-finance round, while Pyramid trading adds one futures contract - but from each active futures contract with each self-financing step. This results in a doubling of your position during each self-financing step.

Both pyramid trades and pillar trades (hereinafter referred to as pyramid trades) should exhibit several characteristics which make them high profit potential candidates. These characteristics include:

• The market is quiet and has exhibited low volatility for several months.


• The margin for the commodity is relatively low.


• The market is set up for a major move. This is evidenced by extreme commercial/public signal, as well as a 12-month high or 12-month low on the daily price chart with a likely 1-2-3 Top or Bottom price chart pattern in the process of unfolding.

A VERY IMPORTANT NOTE: The biggest danger in any futures trade is a limit move which goes against your position. With a single futures contract, this is risky enough. With multiple futures contracts, this risk is seriously compounded. However, if you monitor the market conditions (both technical and fundamental market conditions) and the financial news on a daily basis, you will generally receive a timely warning of an impending limit move which may go against your position - giving you time to close out your position before that occurs.

The Pyramid Trading Form

The Pyramid Trading Form is at the heart of helping you to successfully implement and manage these trading strategies. It contains areas that will let you monitor and track up to three commodities using this trading strategy. Each area allows for up to 7 futures contracts to be held in the pillar trade position, and up to 64 futures contracts in the pyramid trade position.

How To Identify A Good Pyramid Trade Candidate

At any point in time, there will be several commodities with differing degrees of profit potential. However, it is important that you identify the commodity which has the best chance of being a profitable pyramid trade. This means that you must perform a current analysis of all commodities to identify the commodity that meets the following requirements.

a. You must first use the Commercial/Public selection tools to identify the commodities that appear to be ready to make a major move.

b. Of these commodities, identify those that appear to be making either a 1-2-3 Top or 1-2-3 Bottom in the daily price chart. Calculate the daily 50% retracement target for each one. Also calculate the dollar amount the move represents.

c. Where applicable, use the weekly chart to calculate the weekly 50% retracement target for each commodity. Again, calculate the dollar amount the move represents if the weekly target is attained.

d. Identify the margin requirement for each commodity. The ideal pyramid trade will be one with a relatively small margin requirement and with a dollar amount profit potential that is at least three times the margin requirement for the commodity.

e. The commodity that you select must be a quiet commodity - that is, one which does not have wild price swings.

f. The commodity you ultimately select as the best pyramid trade candidate must also have enough time to allow the move to unfold. This means you need to get into a more distant month to minimize loss from commission switch requirements (which can be expensive with 16 or more contracts in your position). Select the more distant commodity contract month that has 120-180 days available until the Last Trading Day (LTD).

g. The commodity which you have selected must have a daily volume of at least 10,000 contracts for adequate liquidity. Open interest should also be 10,000 or more.

It's important to remember that once you are in a trade, you must religiously perform an analysis on a daily basis so as to identify any changes in the original analysis that may adversely impact your trade. In addition, you should always monitor fundamental "news" which will affect the price of the commodity. For example, if you're short Orange Juice - and Florida has a freeze warning - close your position fast!

2. Commodity Pillar Trading Comparison

The commodity pillar trading strategy is the least risky of the two strategies because you only acquire one contract with each applicable price (profit) increase.

An example pillar trade resulted in $12,650 profit (before commissions). During the trade, your total risk was confined to $400 or less. If you had traded only one futures contract (with a 93.79 entry price, and a 94.92 exit price), your gross profit would have been $2,825. The pillar trading strategy produced the additional profit.

3. Commodity Pyramid Trading Comparison

The commodity pyramid trading strategy is the most risky of the two strategies because you acquire two contracts with each applicable price (profit) increase. This results in a risky "inverted pyramid" position which, if not intelligently managed can produce significant losses.

An example Pyramid Trade resulted in $72,200 profit (before commissions). During the trade your total risk was confined to $4,600 or less. Again, if you had traded only one futures contract, your gross profit would have been $2,825. The pyramid trading strategy produced the additional profit.

4. Commodity Pyramid Trading Useful Tips

There are several things which you must do when using the commodity pyramid trading technique described in this course. Failure to do so will likely invite grief into your life.

* You must perform an analysis of the markets to identify an ideal pyramid trading opportunity. Having done that, you need patience and commitment to wait for the inevitable move in price. Your previous efforts at paper trading have given you the confidence and skills to identify major moves. Trust your skills.

* Get into the more distant futures contract to avoid the need to "switch" contracts. The commission on 64 contracts at $40 per contract will cost you an extra $2,560 in commissions each time you switch.

* You must monitor your position daily. This involves being aware of what the analysis "tools" (described in my complete Commodity FUTURES Trading Course) are telling you about the current state of the market.

* Be aware of any "news" items which would have an impact (positive or negative) on the commodity you are trading. For example, if you are short in Orange Juice, a "freeze" warning in Florida will cause price to move against you, and can likely result in a limit move - a catastrophe you should immediately take steps to avoid!

* A price move generally results in a series of minor retracements; leaving a support point during an increase in price, and a resistance point during a decrease in price. It is a sensible strategy to place the stop-loss a little below the support point for the uptrend and above the resistance point for the downtrend.

* Timing of the order entry is critical. You need to predefine what your entry strategy will be during each phase of pyramid trading.

Closing Advice

You must do your homework and try different strategies using various price charts. By covering the price chart with a sheet of paper so you can't see price action beyond the entry point, you can slowly move the sheet of paper rightward exposing subsequent price action. This technique lets you retroactively "simulate" various strategies and react to market changes. Of course, you should also be entering the applicable data into your Pyramid Trading Form to track your "simulated" trade. This will give you skills and confidence to use this pyramid trading technique.

Special Note: There is substantial risk in trading commodity futures and options.

(C) 2008 Thomas Wnorowski

Forex Scalping Systems - A Route To Financial Freedom Scalping Regular Small Profits

Forex scalping is a method of trading price moves within daily periods, with the aim of making small profits with low risk. The ultimate aim is to make big long term profits. It's the most popular form of trading for novice traders - let's look at the basics of success using this method.

Unfortunately forex scalping sounds good in theory - but does not work in practice.

There are however numerous vendors claiming it works all with great track records, so how do they do it?

Well the disclaimer below will answer this question, take a read and you will see why these track records are not all they appear to be:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

Find a forex scalping or day trading system online for sale with a track record of gains and your almost certain to see the disclaimer above (Or similar wording) and of course there is then a problem with the track record - in term of you making profits.

The track record has been simulated in hindsight KNOWING the closing prices.

I am sure by 10 year old daughter could beat George Soros, if she could trade knowing the closing prices however, that's not reality - the reality is trading real time not knowing what will happen next is very hard.

So why doesn't forex scalping work?

The answer is easy, the time period is to short to get the odds on your side, all short term volatility is of a random nature and daily ranges cannot be used to get the odds on your side.

The problem is there are traders in every corner of the globe, all with different forex trading systems, strategies, varying levels of expertise, with diverse opinions and you can throw emotions into the mix as well.

So millions upon millions of people trading and you are going to try and calculate what this vast diverse group will do in a few hours or minutes? Good luck to you, if you fancy a try, I have been trading for 25 years and it's a challenge I think is impossible.

Many novice traders simply throw themselves head first into forex scalping without questioning its dumb logic.

They follow systems that have never been traded and then wonder why they lose - don't try it, unless you want to wipe your equity out.

The first thing you need to do is trade longer term, where you can calculate the odds.

You then need to be realistic about what you can make and get the right forex education.

You can make a lot of money in forex trading and in some instances the money made can be life changing; it remains one of the few ventures in life where you can start with small stakes and get rich, just make sure you get the odds on your side first, learn the correct information and you can enjoy forex trading success.

Forex Currency Trading - How To Make Consistent Profits In 4 Simple Steps

Forex, currency trading whatever you wish to call it is an opportunity to build wealth however, the fact remains 95% of traders lose money. This is not because they can't make money but because they make simple errors. This article is designed to put you on the road to forex profits in 4 simple steps.

Step 1 - It's up to YOU

No one can give you success for no effort so forget all the automatic forex trading systems and forex robots people try and sell you on the net which for a few hundred dollars are going to make you rich - they won't!

Mind you, if you are serious about forex trading you knew the above already so, what you need to do it to this.

Step 2 - Work Smart NOT Hard

Forget about all the mentors or gurus trying to sell you secrets there are none - forex trading is down to learning the right information and getting the right forex education. This should not take long a couple of weeks maximum.

Keep in mind you don't get paid for effort in forex trading, you get paid for being right and that's all.

Many traders make the mistake of thinking the harder they work, the more they make - Not true, that may apply in a 9 - 5 job but not in forex, currency trading.

Once you have learned the right information you then need to have a forex trading strategy you have confidence in and can trade for profit.

Step 3 Your Forex Trading System for Gains

Many novice forex traders think building a forex trading system is hard not so you can build a simple, robust profitable quickly and you need to keep it simple!

Simple strategies work best as they are more robust than complicated ones with fewer elements to break in the brutal real time world of trading.

A good way to start is with a simple breakout system.

This is a timeless way to make money and is easy to understand, implement and will make you money. We don't have time to discuss in full here - but look up breakouts, support and resistance add some momentum indicators and your all set - we have covered building a system in other articles, just look them up.

Keep in mind this once you have your system you have one key element you must pay attention to and that's:

Step 4 - Get the Mindset for Success

While a robust simple trading system will work, you still need to apply it with discipline.

Discipline is the real key to long term gains. If you don't have the discipline to apply your forex trading system, you don't have a system - Period!

If you have built your own forex trading system, you will have confidence in it - this is vital for you to stay with your system through periods of losses ( don't believe anyone who tells you can make a regular income - you will have losing periods that's life) with discipline to achieve long term success.

The Challenge is there are You UP For It?

Forex, currency trading is not hard if you work smart and get a simple robust system you can apply with discipline.

Most traders thing other people can give them success - that's not life your on your own but with the rewards on offer that's the best place to be.

If you have desire, a willingness to work smart and the mental attitude to succeed, you can make big gains at forex, currency trading and enjoy success - its as simple as that.