Learn to Avoid Emotions in Currency Trading

By Ahmad Hassam

One of the overlooked yet the most crucial element of successful trading are maintaining a healthy psychological outlook while trading. At the end of the day, currency traders who are unable to cope with the stress of the forex market fluctuations and unpredictable nature will not withstand the test of time. No matter how skilled you may be as a trader at the scientific elements of trading, you need to be emotionally strong.

Good traders need to be emotionally detached in making trading decisions. Your trading decisions must be independent of fear and greed. One of the attributes of good traders is that they accept losing. They make decisions based on an intellectual level. Traders who get emotionally involved in trading make substantial errors. After a few losing trades, they try to whimsically change their strategies or after a few winning trades become carefree.

Good traders are emotionally balanced. In the midst of a losing streak, they try to take a break before fear or greed starts to dominate their strategy. You cannot win every trade; you must be psychologically strong enough to cope with losses. Even very successful traders go through stretches of losing trades but they are emotionally strong enough to cope with it.

If you are going through a bad stretch in your trading, take a few days off from watching the markets. Try to clear your mind. You should think of taking a break. It can breed greater losses and ruin your psychological confidence, if you keep on trading relentlessly during tough market conditions.

Make no mistake about it, no matter how much you study, practice and trade; there will be stretches of losing trades. You cannot always win. The key is to make losing trades small enough in order to live to trade another day. By using good money management rules, you can overcome a lot of bad luck in your trading. Never ever put more than 2% of your equity at risk in a single trade.

In order to become a master trader, you need to control your emotions. Despite many new methods that have been introduced to traders, one constant is the human emotional behavior. After all, markets are just people selling and buying and only a reflection of these emotions.

Buy on a rumor and sell on a fact. People afraid of losing their money start to sell on rumors. Fear of losing money makes the market prices go down. People become greedy and buy trying to catch a free ride. Fear of losing a good opportunity makes the market prices to rise up and up, creating a bubble.

As a forex trader, you learn technical analysis to help capture profits from a movement in the price. You should understand and learn how price action takes place by developing a forex trading system that is ruled based and does not depend on emotions to make decisions.

The best method to overcome emotions in trading is to develop your own trading system that is ruled based. It should be mechanical in nature. Trading is an art. Learn trading as an art. There will always be 10% of discretion in each trade. Develop a trading system that has clear cut rules for entering and exiting a position and rules out most of the discretion. Discretion means using emotions. Make rules to avoid discretion. Use those rules consistently. There maybe a few losses. With a good forex trading system, you can be sure the number of winner will be greater than the losers. - 23196

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Trade Dow Futures. Learn Forex Trading.

The Forex Pip Defined

By Bart Icles

A Pip is the term for Percentage In Point or Price Interest Point. It is the smallest measurement for the smallest value (price) change of a currency. This term is one of the most important one among many in Forex currency trading, and should be properly understood by any new Forex trader.

Since Forex spreads are relatively very small, and Forex transactions involve mostly large amounts of currency, the currency pairs of majors are quoted accurately to the fourth decimal place, with the exception of the Japanese yen. For example, if the USD/EUR shifts from 1.2345 to 1.2346, the change is 1 Pip. If it shifts from 1.2345 to 1.2305, then it moved by 40 Pips. The 6 most liquid and widely traded currency pairs globally are the:

* EUR/USD, also called the 'EURO" * GBP/USD, also called the "CABLE" * USD/CHF, also called the "SWISSIE" * USD/JPY, also called the "NINJA" * USD/CAD, also called the "LOONIE", or "BEAVER" * AUD/USD, also called the "AUSSIE"

Of the 6 majors, the EUR/USD is the most widely traded currency paired, with an average of 100 Pips per day.

Profits and losses in Forex use the Pip as an accurate means of measurement, but the Pip for a USD/JPY pair has a different value compared to the Pip for USD/CAD, as it is set to the 2nd decimal place since it's value is smaller comparable to a cent/hundredth of other major currencies.

If the currency pair of USD/JPY moves from 110.95 to 111.00, it has gained 5 Pips. If the USD/CAD goes from 1.0234 to 1.0224, it lost 10 Pips. So if the USD/JPY went from 77.48 to 77.53, the increase would be 5 Pips. If you trade with the majors' like the AUD/USD and the exchange rate is at 1.9876, then 1 Pip for this trade is .0001, since it is set four decimal places.

So, in Forex trading "30 Pips" would mean thirty units of value in trading. Since individual currencies have different quotes in terms of Pips, it's important to take note of such differences so as not to get confused in your trading. Dealing with large sums might seem daunting at times, but will get easier gradually as you begin to get acquainted with Forex trading as time passes.

The important thing to remember is that most currencies are placed at the fourth decimal place, such as those paired with the USD, or .0001, except the Yen. If you always keep in mind what a Forex Pip is, as also that each respective currency pair has a different value to it, you'll do well in your everyday trading. - 23196

About the Author:

Click to find out where to receive forex trader training. Also, come learn more about a forex day trading system that might work for you.

Technical Analysis - A Forex Training Guide

By Bart Icles

Being a beginner in the forex trading world can be very challenging. If you are looking forward to participate in actual trading, you might end up frustrated when you learn that you will still need to invest most of your time knowing more about the different factors that affect the market. Learning the basics is gruelling but this is the only way for you to effectively start a successful career in currency trading. In fact, a forex training on the basics of the market is not a guarantee for success, it merely makes it easier for you to understand the market and accept potential frustrations. One important thing that you will need to learn more about is technical analysis. This is a very important topic to know more about, especially if you are planning to participate in day trading.

To start, technical analysis is an effort to calculate currency price movements through an analysis of various market data. These data include volumes, historical price trends, open interests, and a lot others. Technical analysis is pretty much based on a historical principle, where there is always a possibility that things will recur over time. One should take note that although technical analysis involves an evaluation of actual data, it still cannot guarantee an absolute forecast of how things will turn out to be in the future.

If you think that indicators generated from a technical analysis will help you understand what will most likely happen to market prices over a certain period of time, you are more likely to be correct. Technical trading hinges heavily on charts and graphs. If you are looking into participating in day trading, it can be wise to invest on at least one charting or graphing software that can help you better read, understand, and plot data for your own reference.

Typical indicators involved in a technical analysis include simple moving averages, relative strength indices, moving average convergence or divergence, parabolic SAR, and Fibonacci numbers. You can find a forex training course on such factors in many online resources.

You might think that there is security in technical analysis because it takes into account historical market trends. However, you must remember that engaging in forex trading based on technical analysis alone can be risky because not everything that has happened in the past will happen the same way in the future. On the other hand, you cannot disregard a forex training on technical analysis, especially if you believe you will be making more short-term decisions than mid- or long-term calls in your forex career. Still, using a balance between technical and fundamental analyses appears to be the safest way to make investment decisions. - 23196

About the Author:

Forex Training starts with a desire to learn and a drive to become a great trader. Becoming a Forex Trader takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

3 Easy Ways To Find Out How To Decrease Your Car Insurance Rates

By Adam Lecan

There are a number of ways you can do to reduce your car insurance rates and gain a better perspective on how car insurance works. If you know how to minimize your car insurance rates you will save a lot of cash in your lifetime. So here are three simple techniques to save on auto insurance.

The simplest method to save on any insurance policy is to shop around. Whats best about this scheme is, this can be done in less than five minutes by simply completing an online quote form. Regardless of your credit rating, driving history, or age, you can avail the best deal by comparing the car insurance rates of various companies.

The next best thing to shopping around for car insurance is to just drive safely. If you follow all the traffic laws, avoid minor details like speeding tickets, you will save a lot of money in the long run. Your driving record is probably the single greatest factor when a car insurance company is determining your premium. So be careful, and keep your driving record clean.

And lastly, anyone can save money on their car insurance by adding to their premium. If you are eager to pay more, the car insurance company will have to pay less when you submit a claim. Once more, anyone is eligible for this type of discount. Just make sure you can afford your deductible in case an accident transpires.

Another pointer so you can save on your car insurance, maintain good credit. A good credit score will lessen your car insurance rates. Insurance companies will definitely consider your sense of responsibility when giving you an offer. If you have bad credit, don't worry because you still have a chance of availing the discount on car insurance by simply building up your credit. This will take time but will be worth the effort. Your rates will just decrease if you have a good credit rating.

Use these simple techniques in lowering your car insurance rates, and you will be saving thousands of dollars in your lifetime. If you refuse to follow these guidelines, then prepare to pay for higher rates for car insurance. These pointers are simple to follow so utilize them to save on cash. There are other aspects to consider when considering you car insurance rates, but this is just a short guide. - 23196

About the Author:

Now, to answer the question how does car insurance work head over to the how car insurance works website for more car insurance tips and how to get the best rates.

Using Stock Market Software

By Michael Swanson

When you have acquired some experience in stock trading, you might find it beneficial to use stock trading software. The software is generally of more benefit to the experienced trader because you need to program in your own rules or criteria, and you will need to have some understanding of stock trading in order to do this effectively.

Many traders agree that using software benefits them in their trading endeavors. The advantages of stock trading software include helping you to manage your portfolio and to monitor the stocks that you have. Software also assists you to have control over your risk reward ratios.

Human emotions control stock trading with the fear and greed syndrome, and decisions made when being pulled by your emotions often have less than desirable results. Stock trading software helps you to be in control of your emotions and limit the number of emotional trading decisions you are tempted to make.

Time is money, as they say, and using stock trading software saves you considerable time when searching through the thousands of possible investments. The software can scan faster and more thoroughly than you could manually. Because you have entered your rules into the software, the results found by the software will be in line with your trading strategies.

The software works by scanning available investment opportunities according to the criteria you have entered beforehand. It will find suitable stocks and give signals regarding buy or sell, based on your criteria. Some software places the orders for you; some require you to do this manually. You will need to have had sufficient prior experience in stock trading to be able to understand technical analysis and basic investing concepts in order to be able to write profitable criteria for your software.

There are several good stock trading software programs available and you need to find the one that fits best with your trading goals. Try and look at how different programs work and choose software that offers a money-back guarantee for your protection. - 23196

About the Author:

When it comes to stock trading software I personally use TC2000 to sort for stocks.