The investment strategy followed by the majority of investors “buy low sell high” will lose money for those investors who follow it. Let’s look at the facts and you will see why it fails over the longer term and discover a better way to trade.

Buying low you can’t do it! Why? Quite simply, it involves predicting the market and not reacting to price strength. In hindsight charts prove it simply does not work. Traders like to buy low on a dip to support, but how often does support fail? The answer is most of the time.

Most traders are so keen to buy low they keep buying into support and then get stopped out. They then lose their equity after a number of trades, as the odds simply are not in their favor when they try this and loses eventually see them wipe out their account equity.

Buy low sell high, is only a good strategy if you have hindsight and can see what happened on the charts and you don’t have the benefit of this when you enter the trade.

We have all heard of the predictive theories of Gann and Elliot, but if they worked and we all knew where prices were going in advance, there would be no market.

The price would simply be known to all traders and their would be no market. Leave the above theories to the far out investment crowd and the dreamers and base your strategy on the reality of how and why markets really move.

Back to basics

So what should a trader do?

The answer is revealed in the well known phrase “a trend in motion is more likely to continue than reverse".

When do the odds most favour this?

The answer is when prices break to new highs and a trend in motion accelerates at a rapid rate from a new price high. Look at any currency chart and you will see the biggest price moves normally take place from important market highs with NO pullback.

FACT: A "buy low sell high" strategy will see traders miss the majority of major moves.

Traders who wait to buy low never get in to the trade and miss the trend, as the price accelerates away from them and never looks back. These traders therefore never get a chance to enter the trade.

The secret to buying a market and catching the big profitable moves is “buy high and sell higher”, accept the wisdom of this phrase and you will be in on all the major trends.

It’s hard to buy a trend in motion.

The reality is the odds favour that a trend in motion will continue and when a market has broken out to new highs, the odds of a continuation of the trend are at there highest.

Many are afraid of being involved with forex trading because it is 'risky'. This appears to be a very common misnomer so here we will elaborate on the potential risks of forex trading, vs. the risks of other investments and business in general, as well as outlining risk/reward and risk management policies.

First of all, currency trading especially, is not so much about gaining and losing, picking entry and exit points, but risk management . But herein lies the problem: if you are NOT trading forex, you are still exposed to the risks in the currency market! Even if you are not an importer or exporter, and do only domestic business, whatever your investment, it is exposed to currency risk as your investment is denominated in some dollars which are likely to appreciate or depreciate. This may not be reflected as a loss in your bank account, but you will quickly notice it in the purchasing power of your dollars, the interest rate you are getting at the bank, as well as the health of the overall economy. Therefore, it is only risky not to trade forex, because then you have a static position in certain dollars, which may be severely depreciated very quickly, at which point you can do nothing but wait for them to return to value.

Consider that the US Dollar Index was once at 120, and is now at 85. Americans who have not been making 40% to 50% per year in the forex market (most likely buying Euros and selling their own US Dollars) are now exposed to high gas prices, increased commodity prices, skyrocketing real estate, and an overall shift which among other things, is destroying the middle class. It is no secret in the US that prices are increasing. However many brokers and economists are selling this to the public as profit, when in fact this is what is known as inflation. Now it costs in many places twice as much to purchase a home for your family as it did a few years ago. Wages and other income have not kept up with that price increase. This is the definition of inflation! Your dollars now can purchase less, they have less purchasing power than they did 3 or 4 years ago. So the fed says inflation is 3% a year, but really this is economic newspeak.

Americans have become divided into two classes in the last few years: 1) those who are making more money than they ever dreamed of and 2) those who are struggling to make ends meet. This is transparent to previous social class structure, in other words, these 2 categories apply to the rich as well as the poor. There are for example, extremely wealthy people who are struggling to make their monthly payments because of rising financing costs, and because their investments are not doing so well. As well, there are poor people who have reaped in huge profits never seen before by investing in real estate and other high yield investments. So it is not isolated to specific demographics of people - we have become polarized economically, not politically. This was highly seen in the last Presidential election. Finally, the US economy is a benchmark for the rest of the world, for many complex factors not to be mentioned here (being the reserve currency of the world, the Petro Dollar, and being a leader in market based capitalism).

By now you might be thinking that this trading business requires somewhat more effort than you first thought. And you would be right! In fact, that's the subject of todays lesson.

Mistake Number Five - Not Putting In The Required Effort

It's a strange phenomenon that seems almost unique to the field of internet trading; people believe that they can read a book, open an brokerage account, and start making huge amounts of cash just like that.

I used the analogy of an airline pilot in the last article, so lets continue with that theme here. Not many people would expect to decide on Monday that they wanted to fly long-haul airliners, buy and read a book on the principals of flight on Tuesday, and start work as a Captain on Wednesday. But with trading, such a short learning curve appears to many to be perfectly expected.

Whilst I certainly agree that, proportionally in relation to other activites day trading can provide much greater returns for much less effort, it nonetheless does require some effort to get going.

Trading, like any other skill, takes time and commitment to learn and become proficient. However, unlike many other skills, that time to become sufficiently adept need not be costly, or at the expense of existing obligations. In other words, a novice trader can learn the markets and practise their trading whilst continuing in their day-job, and without significant outlay.

Indeed I would advise any would-be trader to have a steady source of income when they start out. The absolute need to generate a profit can have a hugely detrimental effect on trading decisions.

A problem a lot of student traders I work with have is that they start out with a healthy dose of motivation, but when the going gets tough they start to lose interest. Suddenly it becomes too much like hard work. The first losing trades make for a powerful reality check. Motivation goes out the window, and plans to quit the day job are quietly forgotton about. Part of this problem is down to unrealistic expectations at the outset, and part is due to a lack of accountability. In a regular job, we're normally answerable to someone. If something doesn't get done, there's usually someone higher up the food chain ready to kick our butts.

When we're trading our own account, that concept no longer exists. We're only accoubtable to ourselves. For many people that's a first. The solution is to get back to that written trading plan. If the plan has been well thought out, it will include the all important mission statement, and perhaps a set of attainable goals. Re-reading these every day will help reinforce self-accountabilty and motivation.

Trading isn't difficult (something I'll talk more about in the next article), but neither is it an instant source of riches there for the taking. Like anything worthwhile, you get back what you put in. The difference between trading and other activities is that once you have mastered the skill, relative to the amount of time you spend "working" you will get back much more more than you ever put in!

By now you might be thinking that this trading business requires somewhat more effort than you first thought. And you would be right! In fact, that's the subject of todays lesson.

Mistake Number Five - Not Putting In The Required Effort

It's a strange phenomenon that seems almost unique to the field of internet trading; people believe that they can read a book, open an brokerage account, and start making huge amounts of cash just like that.

I used the analogy of an airline pilot in the last article, so lets continue with that theme here. Not many people would expect to decide on Monday that they wanted to fly long-haul airliners, buy and read a book on the principals of flight on Tuesday, and start work as a Captain on Wednesday. But with trading, such a short learning curve appears to many to be perfectly expected.

Whilst I certainly agree that, proportionally in relation to other activites day trading can provide much greater returns for much less effort, it nonetheless does require some effort to get going.

Trading, like any other skill, takes time and commitment to learn and become proficient. However, unlike many other skills, that time to become sufficiently adept need not be costly, or at the expense of existing obligations. In other words, a novice trader can learn the markets and practise their trading whilst continuing in their day-job, and without significant outlay.

Indeed I would advise any would-be trader to have a steady source of income when they start out. The absolute need to generate a profit can have a hugely detrimental effect on trading decisions.

A problem a lot of student traders I work with have is that they start out with a healthy dose of motivation, but when the going gets tough they start to lose interest. Suddenly it becomes too much like hard work. The first losing trades make for a powerful reality check. Motivation goes out the window, and plans to quit the day job are quietly forgotton about. Part of this problem is down to unrealistic expectations at the outset, and part is due to a lack of accountability. In a regular job, we're normally answerable to someone. If something doesn't get done, there's usually someone higher up the food chain ready to kick our butts.

When we're trading our own account, that concept no longer exists. We're only accoubtable to ourselves. For many people that's a first. The solution is to get back to that written trading plan. If the plan has been well thought out, it will include the all important mission statement, and perhaps a set of attainable goals. Re-reading these every day will help reinforce self-accountabilty and motivation.

Trading isn't difficult (something I'll talk more about in the next article), but neither is it an instant source of riches there for the taking. Like anything worthwhile, you get back what you put in. The difference between trading and other activities is that once you have mastered the skill, relative to the amount of time you spend "working" you will get back much more more than you ever put in!

A day of worry is more exhausting than a week of work." -a forex trader

The forex, or foreign money exchange, is all about currency. Money from all over the globe is bought, sold and traded. On the forex, anyone can buy and transfer currency and could maybe come out ahead in the end. When dealing with the foreign currency exchange, it is conceivable to buy the currency of one state, sell it and make a gain. For instance, a broker might buy a Japanese yen when the yen to dollar ratio increases, hitherto trade the yens and buy invest in American dollars for a yield.

The forex and the stock market possess varied similarities, in that it involves buying and trading to make a gain, but there are some differences. Unlike the stock market, the forex has a much high liquidity. This means, much more money is shifting hands day-to-day. Another key distinction when comparing the forex to the stock market is that the forex has no place where it is exchanged and it never closes. The forex involved trading between banks and brokers all over the world and provides twenty-four hour admittance during the business week.

Other variation between the stock market and the forex is that forex transaction has much higher leverage that the stock market. When some person decides to put in in the forex, they can anticipate much higher yield when they are competent and recognize how it works. There can also be the possibility for bleeding much more money as well.

For those who are just getting started in the forex, myriad brokers supply the utility of exchange using the mini-forex system. This has a paltry minimum deposit, customarily $100. This makes it easier for those learning how to trade on the forex to suffer less of a fate of bleeding a lot of savings and to discover how the system goes.

There is a lot of jargon when dealing with the forex. Learning to exchange on the forex can be fairly daedalian for the apprentice trader. When anticipating at the names utilized in the forex, a symbol is composed of two parts. The first one that is used is one It is important to learn what currency symbols imply when mastering about the forex. There are many books and websites dedicated on teaching traders about using the forex.

For those using the forex, a stockbroker is normally a commendable idea. Brokers are professionals when it comes to trading on the forex and their familiarity is priceless, markedly to the new dealer. When it is time to find a broker, there are some factors to ruminate. One thing to scrutinize for when choosing a forex broker is to go with some person that offers low spreads. The spread is designed in pips, or the variation between the valuation at which currency can be purchased and the appraisal it can be sold at any set time. Because forex brokers do not charge a fee, they will make their money off of the spreads, or the difference. When picking a broker, look at this info and refer that with different brokers.

" A smooth sea never made a skillful mariner!" - Quote by an Addicted forex Trader

The forex, also designated the foreign trade market is the largest and greatest liquid exchange market in the planet. Unlike the stock exchange, the forex does not suffer a specified trading location or termination period. Instead, over $2 trillion are traded and sold every day. The forex never closes and exchange takes place twenty-four hours a day along the business week.

There are currently six significant currency pairs that are utilized and traded each day on the forex. These six pairs explain for up to 90 percent of the selling bustle each and every day. These embrace the euro and the US dollar (EUR/USD), the Japanese yen and the US dollar (JPY/USD), the US dollar and the Swiss Franc (USD/CHF), the Australian dollar and the US dollar (AUD/USD), the British pound and the US dollar (GBP/USD) and the US dollar and the Canadian dollar (USD/CAD).

Each of these currencies operates a bit differently in the forex and fluctuates a little on a regular basis. The Euro is extremely vital in the foreign exchange currency. It does not simply stand for one country, but a sum of twelve countries in Europe. The countries that are members of the European Union and identify the Euro as currency are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and Sweden. Out of the fifteen members of the European Union, just two do not respect the euro as the authorized currency. These are Denmark and the United Kingdom. Sweden recently began using the euro in 2005.

Currently the euro is comparative to the US dollar and is worth around 90 cents to the dollar. In 1999, all of the European countries locked the cost of their own currencies in reference to the euro. This implies that all of the currencies were valued round the same as the euro. These countries before long began using the euro as their money so that the currency could be utilized across the region and utilized immune from the demand for obtaining variant forms of currency. This change helped bloster the euro and become a more accepted form of currency.

The use of a unified currency across myriad countries has both advantages and disadvantages in connection to the forex. One of the notable advantage of the euro is that the barter rate is lowered, thereby making investment across environs easier. There are risks in the changes in the cost of the currency. This implies that companies see it risky to import or export beyond their currency domain and that yield could be lowered. Using a broad form of currency eliminates this worry. It creates a additional gamble free import and export room, which once relies thoroughly on intra-European exports.

Additional advantage of numerous countries using the euro is that it eliminates the demand for adjusting fees. When a individual or corporation has the requirement to exchange money, there is a fee desired. Many financial institutions levy assorted manner of percentage for adjustment and while it is a relative small amount, it adds up. Multiple changes add up all across Europe. Dropping these fees saves the economy in the long run.

When evaluating at the forex and the way the euro performs, it is crucially vital to recall that using one form of currency creates a deeper monetary market. This implies that the European markets are much more liquid than in the past. There The idea that it will create a deeper financial market implies it will act upon they way the consumers expend the currency all across the region. This will in turn, prompt to increased amounts of money that is played out on the stock market.

Now that the euro has become one of the biggest currencies in the planet, trading for it and with it will increase on the forex. The forex is customarily bedevilled by the US dollar, but the euro is forcing a hefty stand. The use of this currency all about the European countries is delightful in numerous ways and it is thoroughly established all over the globe. Both businesses and individuals gain from the use of the euro in these countries ,free of the fret of having to switch the money as much as in the past.

Although perhaps not as well known as some other markets, the Foreign Exchange (or Forex) market is the largest securities market in the world. Actually, if you combine all of the other markets in the United States together, Forex is 30 times bigger than even that. On average 2 billion dollars are turned over every day in Forex trading. Clearly, then the Forex market is something we should be interested in taking a closer look at.

I am sure you are familiar with the stock exchange where people buy and sell shares in companies. Forex also involves buying and selling but in global currencies rather than stocks. A trade in Forex will involve selling one countries currency in order to buy another's. For example, I may believe that the Euro is going to strengthen and so I sell some of my US dollars to buy some Euros.

In the stock market, the shares of hundreds of different companies are traded on a daily basis. With Forex, the situation is a little bit simpler in that around 85% of the daily trading involves a small set of major currencies. These are the US Dollar, British Pound, Euro, Japanese Yen, Swiss Franc and the Canadian and Australian Dollars. These currencies are the most liquid which means there should always be a buyer available to accommodate a seller and vice-versa.

Trading in Forex begins in the morning in Sydney and progress across the world over a period of 24 hours before arriving back to start again in Sydney the next morning. This is a further benefit of trading in Forex as traders are able to take advantage of any important fluctuations and changes at any time of the day.

Technology is opening doors for us everyday. It’s making the world smaller, communication faster and making restrictions obsolete. It endows you with the power to do many things, to change the way you work and live, and to be heard. Beyond that, the internet revolution has given you more ways to make money. The fastest growing one is forex trading and with it, forex currency trading training. Think about it. So many people are out there looking to make money with forex trading, but so many lose money or break even. Qualified traders can sometimes lose money on the exchange. Isn’t it important to take time to gain some good solid forex currency trading training?

One way to do this is to use brokers to manage your account by signing up with a brokerage firm that deals in forex trading. They will handle the account, at a price, and you can be involved at every step until you are confident that you are ready to take over. This is expensive and you might find yourself leaving things to them instead of following the trades and learning. Another way to get forex currency trading training is by using the free trial demos that trading firms offer, and perfecting your trading skills by practicing regularly until you feel able to cope with the real market in place of the simulation. This is a good way to learn what mistakes you can make and how to avoid them. It can also help you become comfortable with your risk appetite and invest only what you can spare. However, this method by itself cannot teach you best strategies and technicalities.

Joining a forum of small time investors gives you access to their shared knowledge and grass root techniques used by a variety of investors. You can get an idea of what amounts others are investing and how much money they are making with that amount. The benefits of this type of forex currency trading training are also limited. The most effective way to learn to trade forex is to learn from professionals. Financial gurus write manuals, conduct seminars and offer courses that help you learn to handle your own portfolio, think like a pro and translate strategies into money. While many of these supposed experts can be frauds, there are lots of genuine professionals out there, dispensing useful tips. So research carefully into their credentials and pick ones that are well-known. Understand the strategies and try to think for yourself to make them more effective in making cash.

Finally, be aware that there is a learning curve when you start trading and you will get better as you go along. Don’t expect to make lots of money as soon as you start and don’t invest your life savings. Begin with a mini-account and play it safe till you are ready to use your topped-up capital on riskier trades. Forex trading can be highly profitable so don’t let the downside scare you off. Start cautiously and invest in good forex currency trading training, that’s the key to continued success!

Why Does The Non-Farm Payrolls Report Cause Volatility?

The NFP generally falls on the first Friday of every month and offers an insight into the health of the US labour market. A healthy labour market is an important driver of consumer spending which, in turn, stimulates economic growth and prosperity. The health of the US economy is directly proportional to the strength in value of the US Dollar. This grabs the attention of banks and individual speculators alike. Therefore, few markets feel the effects of this data release like foreign exchange, especially the dollar currency pairs such as EURUSD (Euro vs. US Dollar) and GBPUSD (Great Britain Pound vs. US Dollar).

What Were We Dealing With?

Price reaction to a Non-Farm Payrolls report can vary from a uni directional rally to a mess of chop with no clear directional bias. Given the choice every trader would love to see one-way traffic every time but as we know that is not a reality. On the day in question we saw a brief, but rapid dollar sell off, followed by a sudden directional change. This resulted in a nasty whipsaw. We will go into the reasons for this below. (Images

If you are looking for a beginners education in Forex Trading the best place to look is on the World Wide Web. Simply type in a “beginners education in forex trading” into a well known search engine like Google or Yahoo and you will be presented with scores of websites offering you step by step articles and also full downloadable e-books and e-courses on the subject. You can get this type of material from either an affiliate marketing type site that specializes in linking you to the different Forex traders or you can go directly to a Forex trading site.

Most Forex trading sites offer a beginners education in forex trading. Sometimes this is conveyed through a Help or FAQ section on the site and other times it appears in a series of articles. Some well known futures trading companies simply put all of their beginners education in forex trading right on their site as they take you through the process of actually doing some trades.

Although learning as you go will probably work for most people it might also be a good idea to invest in an e-book or check out some of the more general sites that offer free online how-to articles and guides about a beginner's guide in Forex Trading. This is because any mistakes that you make as a beginning trader could be expensive, especially if you have never gambled with funds by investing in the online futures market before.

There are tons of ways that you can learn forex online currency trading without having to spend a lot of money. The first way is to simply research the subject. However before you do this try reading some glossaries (online alphabetical dictionaries that supply essential definitions) to give yourself a primer in the subject.

Online you will also find lots of glossaries that can provide a quick study if you are planning to learn forex online currency trading. In fact one learning tip might be to read a glossary first before you try to learn forex online currency trading. Many of the big forex currency trading companies offer glossaries like this as part of their website and so do many of the big informational brokerage style sites about this topic. Perusing these company glossaries can really help you be familiar with some of the terms, acronyms and because it is really helpful to learn some of the popular terms used in the practice before you start trying to understand any of the materials that you will find on the internet.

Of course another way to learn forex online currency trading is through a course or workshop. These are often offered by self-styled gurus on the subject through organizations such as the Learning Annex. However this is not as good as having all of the online tools, calculators, calendars and feeds that are often part of a true currency trading learning experiencing.

If you prefer to learn forex online trading in a very structured way there are plenty of forex futures gurus online who have concocted all kinds of courses to show you how to get rich quick investing in this way. You can often buy these types of courses as a download or burned onto several CDs.

There is no other market in the world that can compare itself to the foreign exchange market. With almost USD 2 trillion in daily average the Forex market is bigger than all the stock and bond markets of the entire world. A better way to understand its enormous size would be to compare it with any national stock exchange. Let's use the New York Stock Exchange as an example. The total volume of trading in Forex is more than one hundred times the daily trading on the NYSE on an average day.

With a volatile currency environment in this age of globalization and free market, the investors and financial institutions have found a new battle-field in the global Forex trading to prove their financial power and also to cut a sizable profit. Why do you think, this Forex trading has flown to such a great height in the recent years? Well, there are several reasons behind this immense growth.

The operations in stock market are supervised by a centralized exchange. But in Forex market you will not find any such exchange. It works on the "interbank" market, making it similar to an OTC or over the counter market. The two parties in the trade interact with each other directly either over telephone or through the electronic networks all over the world. Thus in Forex trading you do not have to pay commission to the share brokers for your every buy and sell of the stocks. And this opportunity of trading without commissions makes it particularly lucrative as an investment option for seasoned investors who frequently take part in day trading.

The five major cities of the world take the center stage in Forex trading and they are: Sydney, Tokyo, London, Frankfurt and New York. Thus unlike the domestic stock exchanges, Forex market is functional internationally and the market operates 24-hour a day. Starting from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT) you can carry on with your speculative endeavors in the Forex market. It lets you take the advantages of happenings world over affecting the markets internationally.

Then, Forex market is exceptionally liquid. You will always find buyers for your currency and sellers to buy from. If you are dealing in the major currencies, you can rest assured of the price stability and narrow spreads. It is mainly the leading banks with global presence that provide liquidity to investors, companies, institutions and other market players.

Leverage that you enjoy is rather high. It allows you to hold assets 100 times more than your margin deposit. Suppose you have a deposit worth of USD 10,000. It allows you to trade on the volume worth of USD 1,000,000 through leverage. Then you can leverage the first USD 25,000 of your investment up to 100 times. But for the additional collateral, you get the leverage up to 50 times.

Are there any good free online forex trading courses on the Internet? It all depends who you talk to. Before you decide to believe everything that you read after you download free online forex trading courses there are a few issues that you should be aware.

First of all, the best things in life are not always free and the same can be said of these free online forex trading courses. Consider who is offering the free online forex trading course. Why are they giving the book away? Are they promoting a particular forex trading site or trying to get you to enroll it? How pushy is the material inside the book when it comes to getting you to invest on a certain website? The answers to these questions could all be factors regarding the integrity of the information you are being handed for free.

Another mark of better quality free online forex trading courses is a lack of replication of widely available information. You know you are reading a book that is probably not written by a good expert if most of the information in it can already be easily found by surfing on the Internet. You might be better off simply sticking with the advice and how-to articles offered on the company sites rather than being guided by a badly written e-course or e-book.

The best free online forex trading courses will not be limited to the discussion of how just one company trades. It will give you a comprehensive view of how all of the sites run by major corporations work when it comes to the process of futures trading.

Many sites that offer futures trading also offer free online forex trading courses. This is part of their incentive to get you to sign up with them. These courses are invaluable, especially if you have decided you will already sign up with a company as a futures trader.

In essence forex mechanical trading systems are designed to make trading decisions for you. However is letting a software program that runs on auto pilot a good place to put your fiscal responsibilities as an investor?

Obviously the idea of having trading software is irresistible to most people as it is very appealing to think of your decisions being made for you while you are asleep. This is because the forex market is open twenty-four hours a day and seven days a week. Also they are seduced by the lavish hype used to sell forex mechanical trading systems, which often promise huge profits.

Of course many forex mechanical trading systems simply do not live up to their promises. People find them hard to operate or find themselves confused during a stock market crisis of some kind when the program continues to invest in ways that may no longer be appropriate.

Another drawback of forex mechanical trading systems is that they need historical data inputted into them in order to calculate what might happen in the future. Of course what has happened in the past is not always an accurate predictor of how any kind of stock will behave in the future. If this was true then we would all be rich!

Another element missing from mechanical trading systems is the human element of intuition. No machine can replace that gut feeling that some traders have after watching something on the news that affects their futures trading.

The best forex mechanical trading systems are not optimized in any way and are simple in design. They are user friendly and easy for you to stop if it starts trading in a manner that you dislike. This means not having to uninstall the program in order to stop it from investing your money