Finding Simple Forex Trading Systems

By Tim Barnby

If you spend any time at all in forex (FX) trading forums you'll see constant questions like: "What's the best FX trading system?, what's the best free forex trading system, or where do I find good forex trading signals?" There are so many expert advisors (EAs), indicators, and systems available that it's nearly impossible for a novice trader to find a decent FX trading system, or one that produced consistent results. Still, given a little information, traders should be able to identify a system that will work for them. Any FX trading system worth following will have four traits:

The FX trading system will trade with the long term trend. The system will provide inflexible rules. The FX trading system will use a very limited set of indicators and will rely on an easily identified setup. Finally, the ideal FX trading system will provide a positive financial edge.

Whether you are trading stock, commodities, or a Forex market, following the overall trend should be your first priority. Trading against the trend might get you a few winning trades, but a prudent trader sticks with the overall trend. Chasing retracements is okay if you want a rush. If you want to make money, you need to manage your trading like a business. That means that we make purchases at a lower price than the projected sale price. Counter trend trading goes against that rule. There are several methods for determining a trend. I recommend the Blue Zone, or a similar method for determining the health of a trend.

The ideal FX trading system will provide you with an iron clad set of rules for trading. Your trading results will be tightly correlated to your adherence to rules. When selecting a trading system, make sure you can live with the rules. If you cannot, find another system. If you find that your emotions will not allow you to follow these rules, find another way to make money. A system will only work if you use it correctly and consistently.

When reviewing messages in the Forex trading forums, you'll often see charts. Some of these charts are so covered with indicators that you can hardly see the price action! The best FX trading system will only use a couple of indicators. The Blue Zone system, as an example, only uses three simple moving averages (SMAs). It uses these to determine the health of the trend. The best FX trading systems will couple these few indicators with setups that are incredibly simple and easy to identify. There are systems that use ascending triangles, multi-candle setups, and complicated crossovers. Those are just too complicated to be of much value, and in my opinion, lack consistency. The Blue Zone system uses a single candle setup. This single candle is highly predictive of reversals and will provide consistent results. Of course you have to know which times to trade it.

Finally, any FX trading system can be judged on one metric alone, the Financial Edge. Financial edge is a simple formula. It states: E= (AW*PW) - (AL*PL) Or, in English it states Edge equals the difference between the average winner times the probability of winning and the average loser times the probability of a loss.

Example System: Average Winner: 200 pips Probability of win: 15% Average Loser: 25 pips Probability of loss: 85% Edge = 8.75 pips.

The above example illustrates how important edge is and how unimportant percentage of winning is. We only won 15% of the time in the above example. Using the system consistently, however, would give us nearly 9 pips per trade! Our goal in forex trading is not to win more often. Our goal is not to win at all. Our goal is to make money. The sooner this is learned, the better.

When reviewing the numerous systems available for forex trading, if you remember the preceding facts, you'll be well on your way to finding or developing the perfect FX trading system. - 23200

About the Author:

No matter which Forex trading system you choose, to be profitable in Forex you must gather three elements: Money Management, Proper (Instructor Led) Education and the Mental Game (comes from the first two). We provide everything you need from live trading rooms to intense individualized mentoring programs at The Market Mover Edge

You Need To Check Your Emotions At The Door Before You Invest In The Stock Market

By Marc Abrams

We have all been victims of other people's stock advice. "This stock is a sure-fire winner!" Sometimes the advice comes from a neighbor, or a close friend. Many times it comes from our trusted investment advisor.

Human nature gets us thinking. Do I want to risk losing out on these supposed gains? Without batting a rational eye, we invest. The end result isn't usually pretty. However, we continue on and repeat this cycle over and over again.

What is wrong with our thinking? The answer, for most of us, is that our emotions take control of our decisions. They are so powerful that we often ignore our rational, logical thoughts. The opportunity for a quick dollar or hope to "get rich quick" heightens our emotional thinking. You must realize that it is not the rational side of our brain that is tripping us up, but the emotional side!

We tend to ignore many sound investment plans due to emotions. You can, however, quiet that emotional side that forces you to ignore your well thought out investment strategy if you work at it. You can learn to stick to your investment plan through both good and bad times.

Some investors, however, cannot shake the investing demons that compel them into making the same mistakes over and over. It is the casual trader that has the most trouble overcoming emotions in investing. They often lack the experience that allows them to treat investing like a business, and not like a game of poker.

The main emotion driving many investors is the fear of losing money. Making a quick buck is the next one. Don't forget about the king of all emotions, greed. These emotions cloud your judgment and don't allow you to clearly see how a particular decision affects your portfolio. When this type of thinking is in play, disaster can strike rather quickly.

My emotions were extremely difficult to get under control when investing. I managed to finally tame that beast and let my rational side control my investing decisions. In order to do this, I developed a system that I use to invest with consistent success. I have set parameters to follow that guide me to the right kinds of investments. It is a logical system in black and white. Sure, the emotional beast tries to rear its ugly head from time to time, but I remain diligent and stick to my strategy.

Don't feel ashamed when you make poor investment decisions over and over. There is good news, you can change things starting now! I have had tremendous success investing in the stock market since I made that change. I also managed to do this when the stock market was in a sharp decline! Please believe me, all you need is a solid investment strategy and the will to keep your emotions in check to be a successful investor. Take the advise of someone that did that very thing! - 23200

About the Author:

Marc Abrams is a CPA with over 15 years experience in financing and investing. Visit Marc's website to learn more about successful stock market and option trading strategies that will get your retirement back on track.

Commodities and the Global Macro Trader

By Bruce Soros

The typical image of the floor of the Mercantile Exchange being filled with a bunch of guys that couldn't get jobs anywhere else is very outdated and wrong. Instead commodity traders are increasingly becoming some of the most sophisticated investors on earth.

The largest group of traders are definitely the upstairs trader, or traders that are not on the floor of the exchange. Some have floor experience while others do not. The largest group of these are systematic long term trend followers while there are smaller subsets that do purely fundamental and others a hybrid model.

Global macro traders are the next major group of players in the commodity markets. Some are heavily involved and some barely trade them but all macro traders track the commodity markets to give them a better look into the worlds macro economic situation.

One of the easiest to comprehend examples is that of the oil markets. When oil is climbing Mt Everest like Carl Lewis in the Olympics then you know that there will be some huge dislocations in the economy. Oil and oil service companies will be climbing like no ones business but other companies like airlines and trucking companies will be getting whacked like a rat in a mafia movie.

Precious metals are another area of great concern. Long looked as a fantastic inflation gauge gold and silver are also looked upon more and more as alternative currencies since most fiat currencies are looking like junk these days. As you can see precious metals are very useful to key in on currencies and inflation.

Industrial metals are also a big deal as almost everything you buy or use has some type of metal in it. Copper for electrical wires, lead for batteries, aluminum for cans, etc. The list is virtually endless and between the MERC, the NYMEX, and the LME you can trade basically all of it. If you aren't tracking industrial metals then you are not pricing out the number one cost for most manufacturing and industrial companies.

Agricultural commodities are the last major group of commodities and the ones that tend to get the shortest thrift. This is a mistake as the worlds economies continue to grow and more and more people become more prosperous they eat better and better. This coupled with the fact that there is less water on earth and you have the potential for a large increase in the price of food worldwide.

As you can see commodities can be a very useful and profitable asset class. With several sub sectors as well as the fact that most commodities are so universal that they only trade in one currency and it should be obvious that you need to track if not trade commodities. - 23200

About the Author:

If you need actionable trading ideas then check out The Macro Trader It is a weekly global macro investor advisory publication with frequent intra-week updates for time-critical analysis and actionable trading ideas.

Forex Trading Strategies - Enrich Your Trading Arsenal

By Steve Maenshel

Forex trading strategies are essential for a trader. A trader should know when to be Bullish or to be Bearish. Forex trading strategies help you analyze the market and to take the last step of your analysis - to buy or sell a contract. This is the most complicated part of the whole process. Determining the time of the opening and closing of positions should be as accurate as possible.

The decision often must be taken within a few minutes or hours, using various tools of technical analysis.

The most common Forex trading strategies are:

1. Using Support and Resistance levels

Sound Forex trading strategies, similar to this one, remain profitable, even though they started to be used long ago. When Resistance is broken, it can serve as a good sign to buy. This new position can be secure with the aid of a stop-loss placed directly below the level of a break. The level of a break now will become a level of support. New positions can also be opened, when in a descending trend the prices rise up to the Resistance line. New positions can also be opened, when in an uptrend the prices fall down to the Support line.

2. Scanning for the intersection of trend-lines

Most important is the intersection of a proven and several times checked trend-line, which would allow a trader to enter / exit early. At the same time, it is better to also keep an eye on other technical indicators. If you are using the trend-line as your Support / Resistance, buy when prices fall to a solid upward trend line and sell when prices rise to a solid downward trend-line. This is one of the sound Forex trading strategies.

3. Scanning the breaks

Forex trading strategies usually include 3 main options to trade in the break:

- If you think you have predicted the upcoming break, open position prior to its occurrence;

- If you see that the break occurred, trade for the rollback, virtually inevitable after a break.

- Wait for the inevitable roll-back after the break, because in the market after a break, there is usually a correction.

You can additionally use a combination of the above Forex trading strategies, and try to open a position in each of these phases, i.e. before a break, after the break and during a correction, which is likely to follow a break.

4. Choosing a suitable time frame

1). Holding a long position- for days or months - (is a moderately safe one of the Forex trading strategies, based on time-frames). It is best suited for strong trends. For best results, also look at the immediate options. Since this is a long position, you should also use fundamental analysis.

2). Medium-term trends, up to several days. Medium-term positions are more stable for profit, although the analysis for the decision-making is more complex in this case. It is also very important to choose the right time of opening and closing positions. When you open medium-term positions, be sure to not only use technical analysis but also fundamental. This is one of the safest Forex trading strategies.

3). Forex trading strategies, based on short positions, i.e., ranging from several minutes to several hours. Fundamental analysis is in fact useless in this case, so you can fully concentrate on the technical analysis. The price will not change unexpectedly at your absence, because you'll be constantly following it. However, risk of losses is very high, making short-term positions more suited to professional traders, and not for beginners. Another drawback is that you'll have to have focus on the prices throughout the whole day. Try to also use the volume indicators, which will help more accurately determine the direction of the market. Also, this type of position is good for trade in breaks, and rollbacks. Generally, these positions are not very suitable for the novice trader; a novice trader is better to stay with medium-term trends.

Sound Forex trading strategies will aid you in finding the best times for your transactions. Sound Forex trading strategies remain useful for decades. - 23200

About the Author:

Author Steve Maenshel has been a professional trader for ten years. He can help you understand forex trading strategies. For more forex trading information, visit his forex resource center.

Learning How to Read the Stock Market Screens

By Sheryl Bocelli

The exchange market covers various sectors and how to read the stock market with various commodities is important to consider and be familiar with. Every investor and trader must learn how to read the stock market signals and symbols for him to understand the lingo of the industry. For a simplistic view, all these goods or products offered in the marketplace are popularly referred to as stocks, actually refers to ownership rights in a company. Trading is the focal point of the business. It may involve buying or selling of stocks to be executed in a certain sector of a marketplace where products offered come in the form of stocks, bonds, securities, and many more which are usually intangibles.

The exchange industry is one kind that is among the first to be affected always in any economic change due to price fluctuations of commodities at stake. Stocks play a vital role and produces considerable impact to the status of the company owning them. In reality, the stock market is the physical representation and reflection of the recent condition of the economy. Whatever is the status of the economy always affects the exchange business.

Any trader or investor in this business is presumed to understand and know how to read the stock market charts, the most important trading tools. The valuable indicators that can influence players of the exchange in executing their trade moves are reflected on these trading tools. The techniques which are involved in charting vary for each trader or investors ease and convenience which is always relative to any trader or investor.

Any type of chart is important for technical analysis and very influential in creating execution strategies on the trade floor. It is of utmost necessity for a trader or investor to learn how to read the stock market chart in order to understand the dramatic changes of the exchange. Charting is an art that can be developed into a skill by any good trader.

Charting is an opportunity you can avail to practice and learn online. If you want to perfect your charting skills, you can check on websites that provide free charts for your practice online and analysis. You will be confronted with the names, numbers, codes, signals and symbols of the stock screens for in that way you learn how to read the stock market. - 23200

About the Author:

How to Read the Stock Market? This is a question anyone should know about to be able to gain more profits and lesser losses in the Stock Market. As you can see the stock market is variable, or say, changeable and would need an expert to be able to distinguish when it is the right time to trade. Simply visit this site at www.tradestocksamerica.com to know more about it.