3 Foolproof Methods For Long Term Forex Trading

Are there any foolproof methods for long term Forex trading? Well...there

are, but they only work for people who are not fools! Foolproof methods

of Forex trading exist for those who realize that the Forex market is

bigger than they are; for those who are going to engage in strict money

management; and for those who understand that they need to actually

stick with their chosen strategy and not flit about with impatience when

 they take a few inevitable losses. Long term trading on the Forex is

the only authentic way to make money. Going for the "Big Money" with one

 or just a handful of trades is the way to biting the dust, not the way

to that big money that you seek. Therefore, if you're nobody's fool, you

 will want to use methods of Forex trading that keep you focused on

making long term profits-so you will have to go for and expect smaller

gains and a gradual building of your Forex fortune. You will sometimes

have luck on your side and make a big killing in one day, but then again

 losses are inevitable, too, in this highly volatile market. Over the

long term, cutting your losses and mounting up your smaller gains is the

 only way that you can get rich in the Forex.So, let's look at the

"foolproof" basics of long term Forex trading.1. Trade the trends. There

 is possibly nothing more important to making money in the short and in

the long term with the Forex than trading on trends. Forget about the

usual error of trying to predict highs and lows. These are not only

nearly impossible to predict, but a new high or a new low is where the

new trending starts. When you spot-not predict, mind you, but spot-a new

 high or low, a movement that ends an old resistance point by at least

three pips, you probably have a new trend in the Forex market. This is

when you get in. Most investors, those who are trying to predict the

highs and lows, wait for the currency pair price to come back down, or

move back up, beyond the old resistance point, and then it's tool late.

They failed to understand a trend. They lost out on most of the

opportunities to make profits, and they often take heavy losses from

this folly, too. Spend your time learning how to accurately spot trends

and you'll make money in the Forex.2. Swing trading. Swing trading is

likely the best method for the novice Forex trader. This is because it

doesn't require the discipline or the experience with trend-spotting

that trend investing does. Swing trading is about looking for a price

spike either up or down, then mentally defining a particular area of

resistance and support, and then watching like a hawk for the momentum

to shift while the level holds before entering your trading signal.

Swing trades are for quick entry and quick exit. You only hold your

position most of the time from two to seven days. Swing trading works,

ironically, because of folly. But not your folly. It works because short

 term price spikes get caused by emotional trading driving the pair

price too far too quickly; and as a result, the prices very soon return

to fair value. You as the swing trader seek to over-by and over-sell the

 resistance and support levels and then trade into them.

3. Confirmation. This is a part of trading the trends, but it should be

viewed as a method in its own right. Confirmation means confirming

breakouts (newly starting trends) so that you don't get fooled by false

(illusory) breakouts, which as you can imagine do sometimes occur. (A

new trend fails to materialize as anticipated.) Confirmation involves

the placement of a few momentum indicators and using them to more deeply

 analyze whether a perceived trend is likely to materialize. The two

most important movement indicators for you to learn as a novice are the

RSI and the stochastic movement indicator.

There you have it. Practice and master these three foolproof methods for

 Forex trading and over time you could become very rich indeed.

Hope You Enjoyed It

Emmanuel

PRACTISING SWING TRADING IN THE VOLATILE FOREX MARKET.

This involves the process of capitalizing on brief and sudden spikes in price. The pair of currency can either be lower or higher. You can accomplish this by being able to spot sudden changes which indicate emotional trading is strongly moving the currency price in one direction or another.

NB: You should by no means practice emotional trading. This is bound to cause a temporarily break that passes a typical resistance point. This system of trading tends to capture gains from the changes in the currency pairs within a period of two to seven days. Traders who embark on this method of trading use technical analysis which greatly differs from fundamental analysis. They also make use of some market sentiment analysis which looks for currency pairs that show short-term price momentum. These traders look for opportunities to capitalize on short-term price trends and patterns instead of long-term trends which are usually used. Now Forex swing trading is a technique used in making a U-turn at a particular point while trading. It is sometimes confused with reversal trading, but unlike reversal trading strategy, swing trading is only engaged in for a short period of time whereas reversal trading looks for a change in trend. To have any effective technique for swing trading in Forex trading, you have to understand support and resistance.

Support: This is that price beyond which, historically, a currency pair's price has difficult falling under.

Resistance: It is that price which a currency pair, historically, has difficulty breaking past in an upward motion. It is the opposite of support.

Whenever a resistance or a support level is broken, it might mean that a new trend has started. These times are referred to as "breakouts" and they mean that a new lower and upper limit for that pair’s price is to be set. But, what swing traders are really looking for is not a new trend. Rather, they are looking for indications of emotional trading going on in a heavy way, and this has temporarily either increased or lowered the price of a currency pair to an unsustainably high or low level. The swing trader always seeks to enter into a position makes him/her profit in a short period of time.

Normally, in the Forex market, a swing is only maintained for two to seven days. Swing traders rely on technical analysis for their predictions. They have little or no interest in what is

known as "fundamental analysis". With technical analysis, they can analyse the historic trends in a certain currency pair's price changes. This will include recent, short term, and long term (up to three years back) research. If the trader notices what can be seen to be an anomaly manifesting in price movement, he may then turn to some quick market sentiment analysis. A common part of market sentiment analysis for the Forex trader is looking at "open interest".

Open interest refers to the number of contracts that are open but not exercised on a given day.

Below are some basic swing trading techniques you can practice:

• Make sure your Forex swing trading strategies are as simple as possible. Never take up any strategy that seem too complicated for you to easily understand or make your strategies more complicated than have to be. If you can't understand the simple basics of a strategy intuitively after a little bit of study, then you shouldn’t use it.

• Learn and utilize the Relative Strength Index (RSI) and stochastic indices

• When it seems that you are trading into resistance which is at a market high, consider using the stop reverse technique on a break-out. Why? Because the major Forex market trends begin when high resistance barriers are breached. You can stop-loss orders being executed by capitalizing on new trend followers.

• Do not hesitate, by trying to feed your greed. Be ready to take profits as they come.

Meaning once you have made a profit that is within your anticipated price movement range, grab it immediately. The Forex market is so volatile that your profits tend to vanish too quickly when you hesitate. Remember that small profits add up to big ones.

If you Study and practice these techniques used in swing trading you can profit from it in the Forex market.

5 proven methods of successful forex trsding

There are five common mistakes Forex traders always make. Only those

Forex traders with long standing experience and great years of practice under their hats

do not make these mistakes, but most of them learned this the hard way and

did make them or at least made some of them. This is how common these

five leading mistakes are. It is very important that you know about

these mistakes so that you can easily learn how to avoid them. If

you are new to Forex trading, being aware of these very common

mistakes help you avoid them entirely.

1.                       Having "Bad Psychology" About Forex Trading

Forex trading is very exciting. The market is quite volatile and, as a

result, there's always a chance to make big buckets of money. But this

excitement can lead people astray. You have to "cast a cold eye" on your

 trading decisions. Not only getting excited, but even having traits

that normally enable you to succeed, such as great drive and ambition,

can cause you to make bad decisions that may ultimately cost you money instead of make

you money.

You see, you don't control the markets. You can only make your educated

guesses at the way a currency pair is going to move and place your

educated bets. But when a trader gets overly ambitious, driven, or

excited, he begins subconsciously "forcing" trades. This results in

failure. In Forex trading, it is a rule than only cooler heads prevail.

2.                       Emotional Trading

This is related to the bad psychology trait, but it's a little

different. Trading on emotions is more than just trading on excitement or

 with too much ambition. Trading on emotion means that you allow your

emotions to dictate your decisions. Essentially you are caught up in the

 vicious cycle of greed and fear. No successful trader in Forex makes

decisions based on either greed or fear. Yes, as a trader you are

"greedy" in the sense that you want to make as much money as you can.

But a successful trader never ever breaks away from his calculated strategy

because he wants to make a killing with one trade. He's got his "pips

plotted out" and he remains within the confines of his rational,

well-studied strategy. He does not over-bet and he does not take

out-sized risks.

The successful trader also does not exit a position too soon because of

fear. He knows that sometimes he is going to lose money. He creates and

follows a strategy so that he will win more often than he loses and thus

 have net gains. You can't be skittish and trade the Forex with any

success.

3.                       Having Insufficient Funds

New Forex traders love the fact that Forex accounts can be opened for

very little money as compared to most other investment accounts. But

while this might seem like an advantage for a new trader, it is a

double-edged sword and really not a good idea. The reason for this is

that with only a few losses taken, the money is all gone. The new

trader, still learning how to refine her strategy, doesn't have the time

 to build up his/her account enough to where h/she can take a few losses and

still be alright.

Don't open a new Forex account for the lowest possible amount. Instead,

try to have at least $10,000 that you can use to open your account. And

never risk more than 5% of your total account on any one trade. This

gives you margin for errors while you refine your trading style and

stratagems.

4.                       Speaking of Trading Style...

You have to know what your trading style is. You need prepared

strategies. You cannot shoot from the hip and be some kind of

"improviser" when trading the Forex. Your strategic preparation begins

with you knowing your risk tolerance. If you don't know your personal

risk tolerance, get some advice about it from other traders or financial

 professionals.

You must be totally comfortable with your own approach to the Forex.

Study the various ideas and trading styles out there, but don't force

any of them upon yourself. And you should not be losing sleep over your

risks. Too many traders just don't understand this.

5.                       Not Knowing What You're Doing

In the Forex market, knowledge is power. Lack of knowledge is financial

death. And remember, a little learning is a dangerous thing. You want to

 have sufficient knowledge before you begin risking your money.

Practicing on a demo account, talking to Forex veterans, and reading up

on strategies are all essentials.

There you have it. Avoid these five all-too-common Forex errors and you’re sure to

Succeed in trading forex.

As you can see above, I have completely explained these mistakes and it is left for you to prevent them in the best possible way you can. Like I mentioned above, if you are new to forex trading endeavour not to make these mistakes as they are sure ways of making sure you do not make profits from trading Forex.

Regards

Omene Emmanuel