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Monday, November 25, 2013

Create a Successful Forex Trading Strategy

I came across a very nice infographic which covers the cornerstones of creating a successful forex strategy. I thought I share this with you guys and hope that new traders will find it beneficial as it not only helps you on your road to success as a forex trader, but can also speed up the process a bit.

Creating a successful forex trading strategy is one of the most import steps for any trader who wants to be successful. It may also be the most challenging task as it requires plenty of time and traders can't rush this process. This step has to be preceded by a proper education first in order to have a deep foundation on which you can build a strategy.

Check out this inforgraphic which can help you shorten the time as you learn how to create a proper trading strategy:

From: PaxForex

Now you are armed with the key aspects which go into creating a successful forex trading strategy. Take what you read in the above infographic and combine it with your previously amassed research and knowledge about forex trading and start to work on your very own trading strategy.

It is time to profit, don't you think?

Tuesday, November 19, 2013

Is your Stop Loss killing your profits?

Since we have a very slow economic news week so far with very little to move the markets either way I thought I will take a few moments in order to cover a topic which many new traders may find very beneficial. It appears that new traders are clueless about how to use a stop loss order properly and follow popular advice which causes them to stop their profits as well.

There is a growing number of new traders who determine a strategy where they are able to generate profits, but never realize them. They get their analysis right, make the right call and end up with loss after loss after loss. The side effects of this are severe and over a longer time period it leads to total loss of the trading account.

In case you belong to this group of new traders who analyzes a currency pair correct, but fails to profit from it then the problem may be located with your stop loss order. You are getting stopped out of a trade and after you closed it successfully for a loss price action turns around and you could have earned money from it.

Somewhere in the moronic forex marketing world the idea was circulated that real traders, regardless if you trade forex or other asset classes, use a stop loss order to protect their account and manage risk. This notion is complete non-sense. For starters only inexperienced and uneducated traders use a stop loss order so they can close a trade for a loss.

Real traders do use a stop loss order, but not to manage risk. A stop loss order is used to close trading positions for profits.

A lot of new traders then are so terrified of trading that they place a stop loss order 20 pips, 30 pips or 50 pips away from their entry and stick to their risk-reward ratio of 2:1. This basically means that if they place their stop loss 30 pips away they will place their take profit 60 pips away. At the end of the day they think they are trading properly.

Those who want to succeed as forex traders need to drop this moronic idea and understand that using a stop loss to close trades for losses is not intelligent risk management. Furthermore, placing a stop loss order very tight to your entry is getting close to gambling and has nothing to do with trading anymore.

Don’t let your fear combine with your stop loss order and kill your profits, learn how to trade properly!

Thursday, November 14, 2013

Janet Yellen – The Joke is on You

Every so often events in financial markets we get a few good jokes to laugh at and today is Janet Yellen’s Senate Banking Committee confirmation hearing. There are little doubts that she will be confirmed which would make her the first female Federal Reserve Chief. For starters, who cares if she is the first female or not! It really does not matter, but it does show the narrow minded thought pattern of the general public who will make a big deal out of it.

Do you guys remember when the first half-white socialist was allowed to run an administration?

Yes, he is still in office. The media frenzy was terrible and nobody cared about merits and qualifications. The moronic media outlets which support the democRATS claimed a victory on racism and ignored that they only fueled racism with their pathetic coverage and currently the US has not been more divided across every line you can possible draw since the pre-Civil War era.

Do you know when racism has been eliminated or at least redcued?

When nobody cares about the skin color of the person in the White House and people simply refer to the person as President. The same holds true about gender, religion and heritage inequalities. When dumb media outlets and their even dumber followers, readers and viewers stop pointing out those things we have truly taken a step in the right direction.

Now, let us get back to the soon to be new joke at the helm of the Federal Reserve. Janet Yellen may be excited and happy with a certain itch in the wrong place in order to get started, but I am wondering if anyone will point out to her that she was the second choice and the only reason it is her sitting in front of a few selected Senators is because the primary choice withdrew his nomination.

Picking Janet Yellen is nothing more than picking the best choice out of the terrible candidates who would even consider an appointment by Mr. Dumbama to head the Federal Reserve. The Septic Tank, Ben Bernanke, will leave a toxic mess behind which nobody wants to touch. Bernanke’s inability to create a connection between two function brain cells led to his ouster as he was essentially fired. Many have asked him to return back to teaching at Princeton where he can prep the next generation of failures and to leave big boy business to the big boys where he clearly does not belong.

I have had long discussions with my colleagues about the next butt monkey who will get a chance to display extreme stupidity when it comes to real world economic principles and Janet Yellen was the second best choice. It must really suck a very big magic wand to know that you were second choice and not sophisticated enough to understand that accepting the nomination will put you on the world stage where you will show how well the system has educated you towards total failure.

Yellen lacks any type of fiscal intelligence and equity markets cheer a dovish and incapable Fed Chief as long as stimulus will keep flowing and take away the ground they stand on. At some point you have to pay the piper and the bill won’t be bearable by the US economy.

Wednesday, November 13, 2013

Banks begging Hedge Funds

I wanted to share a rather interesting story of how government stupidity as displayed from the US to Japan and from Germany to Greece has changed the landscape of the financial system once again, but this time for the better. With a drain in liquidity banks had to search at alternative places for it and my colleagues and I discussed this topic during a conference this past weekend as I was asked if I was interested in getting on board as well.

What am I talking about?

A new little asset which is gaining popularity among niche hedge funds called Capital Relieve Trade or CRT. A CRT is referred to when banks hand off a portion of their risks associated to loans they made to a third-party in order to meet capital requirements.

Moronic governments and regulators have unleashed a serious of counter-productive rules designed to kill financial innovation and hurt competitiveness which has caused banks to scramble and choke off business units, stop lending and cut their overall business in order to meet the new set of rules and regulatory guidelines designed to crush profitability which is exactly what socialists who are allowed to govern desire.

Most banks decided to throw their hands up in the air and kill their business units, put their tail between their legs and get leashed by regulators. Then there are the few fighters out there who turned to the only sector of the financial system which never needed nor asked for a pathetic bailout; hedge funds. While CRT’s are not exactly popular with hedge funds, there has been an increase in assistance from this sector to the banking sector.

The reason why CRT’s are not very much liked not traded around global hedge funds is that often those banks who get down on both knees and beg for help, this is dumb money asking smart money for assistance, have already accepted some sort of government assistance and therefore have the morons from the regulators as well as government socialists breathing down their neck. Most smart money hedge fund managers stay away from this toxic mess as it only invites the government and its puppies to the sole untouched sector of the financial world.

I have no interest in trading CRT’s and could care less if banks go bust, but it is a rather interesting development and those banks who want to show regulators the middle finger are always on my radar as I appreciate their will to fight. 

Wednesday, November 6, 2013

PaxForex Trading Recommendations November 2013

PaxForex Trading Recommendations are published every day over at PaxForex and I want to bring them right to you as well. Follow them if you want to get on board and earn over 1,000 pips every month. Feel free to give your feedback and share your success stories here.
Monday, November 4th

Tuesday, November 5th

Wednesday, November 6th

Thursday, November 7th

NZDUSD Second Put

Monday, November 11th

EURUSD at Twin Support

Tuesday, November 12th

USDJPY at Resistance

Wednesday, November 13th

AUDNZD Final Call

Thursday, November 14th

GBPJPY Reversal

Monday, November 18th

AUDJPY Second Put

Tuesday, November 19th

NZDJPY at Resistance

Wednesday, November 20th

CHFJPY at Resistance

Thursday, November 21st

EURGBP at Support

Monday, November 25th

AUDCHF Last Call

Tuesday, November 26th

GBPUSD Second Put

Wednesday, November 27th

EURAUD Double Top

Friday, November 29th

USDJPY Second Put

Total Losses: 170 pips (First Monthly Loss)

Tuesday, November 5, 2013

Forex Price Action Overview

Instead of giving you guys a quick update on events which happened today I wanted to take the time to answer a question which is often asked by new forex traders. First of all I hope everyone has done the proper amount of basic research about forex trading. Those who have done so at least came across the term price action and those who are clueless don't even bother trading and get back to educating yourself.

The more research you will do the more you will read about price action and how many forex traders who claim to be profitable swear by trading price action only.Before you read any further, there is no one right approach to trading currency pairs or any other asset you trade; it all depends on the individual trader.

Here are some key facts you need to know about price action trading:
  • Price action traders only look at charts without any indicators. This is also known as naked trading as you only look at the charts and nothing more
  • Candlestick charts are the most common used chart for price action trading 
  • Trading signals are generated by chart formations as well as candlestick formations
Trading price action sounds very simple, it is very simple but it is not easy. It requires years of experience which you need to gain in a live account and not in a demo account. Those of you who still think you can accomplish anything in a demo account please read the following post and check out the infographic: