I speak to traders that spend every waking hour focused on trading. While this may be fine for some it is not for me, I know this because I used to be that guy. I originally became interested in trading because I dreamed of being rich and having the time to do what ever I wanted. I have a compulsive nature to begin with and I hunger for knowledge. This combination led me to work constantly, to learn more about trading. I maintained a full time job and studied trading strategy at night, often until midnight only to get up the next day at 4:30 A.M. to go to work. Studying the markets were a 7 day a week thing for me. This went on for a couple of years.

From time to time I would personally meet other traders and met some through the net. Over time I noticed that some traders did not obsess over trading the way I did. Most did but a handful did not.I thought that one day if I worked hard enough I would be like them. Then one day I met a man that changed my thinking. Through our discussions about trading I realized that he started about the same time as myself. He did not have as much experience as I had and it was apparent that his knowledge of the markets was not as extensive as myself.

The curious thing was that he traded only 2 hours per day and did not work any other job. The rest of his time he played golf and spent time with his family. I questioned him in hope that he would share his secret trading formula with me. To my surprise he did not have a secret weapon for trading markets. Instead he had a secret weapon for life in general. ENJOY IT!! That day I realized that I had lost sight completely of my original goal which was to have more time. I had ran completely in the opposite direction. Instead of trading freeing from a job it had become more of a job than my actual job was. My percentage of winning trades was not where I wanted it to be and thought that I could study my way to a better percentage.

After talking with him I decided to take a break from trading and come back with a new perspective. When I again started to trade I only allowed myself to spend 2 hours per day on trading. I was much more relaxed and I traded less often. This turned out to be great, my win percentage went up because I was more selective in my trades and I was not stressed out about everything. Today I enjoy life much more and trading is what I thought that it could be.... Thanks Robert

If there are people in your life who do not support your efforts to become a successful trader, avoid them. Avoid those who express negative energy on a regular basis and vent their hostilities towards you. Wherever possible terminate unhealthy emotional relationships that cannot be repaired, and if necessary, do it immediately.

Negative energy has a cumulative effect that eventually wears down your positive attitude and energy to be successful. Life is too short to be with those who do not believe in you or your abilities to achieve success. A loving partner takes an interest in your work, encourages your efforts, expresses compassion during difficult times, and always tries to help you grow.

Sometimes it helps to find a trading office where instead of getting a bunch of flack from those around you, you can find support, encouragement, and perhaps learn a few tricks from successful traders. I did say a trading office, not a newsgroup or chat room. All you will find in those places is a lot of negative energy, gossip, rumors, and most people who are so confused they can’t see the forest for the trees. For the most part, people who frequent those places, are no better off than you are, and in many instances a lot worse. You cannot believe much of anything you hear in newsgroups. Sorry about that, but it’s true.

Joe Ross has been trading for more than 47 years, and is a well known Master Trader. He has survived all the up and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits.

Joe is the creator of the Ross hook, and has set new standards for low-risk trading with his concept of "The Law of Charts." Joe was a private trader for most of his life. In the mid 80's he shift his focus and decided to share his knowledge. After his recovery, he founded Trading Educators in 1988 to teach aspiring traders how to make profits using his trading approach. He has written 12 major books on trading. All of them have become classics and have been translated into many different languages.

Joe holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, VA. Joe still tutors, teaches, writes, and trades regularly. Joe is still an active and integral part of Trading Educators.

Stock and option traders are often inundated with promotional material in the form of direct mail, seminar promoters, software vendors, and the occasional infomercial late at nite that implies if you just had the secrets they contain that you too can build your fortune by trading stocks, options, and the like. However, one thing that many of the authors of these materials don’t consider is the fact that many people have jobs, families, and businesses that require your attention. While many people are drawn to the markets and sincerely have the desire as well as the will to apply themselves many of these promoters and authors are unable to understand the needs of part-time traders. This, unfortunately, leads many aspiring traders to the false conclusion that they cannot trade profitably since they are unable to trade full-time but this doesn’t have to be the case if the individual keeps certain key fundamental criteria to make money trading the markets.

First, you have to trade your own time frame. It is critical that you adopt a trading style that fits your own time frame. Don’t choose to be a intermediate stock trader but then try to be a daytrader too. Part-time traders have a limited time and its best to find an approach that complements both. By trying to utilize several different methods a part-time trader will rarely find the success that he or she is looking for. One trader that I know of was deeply involved with another business and had to stop trading short term options but adopted an intermediate stock momentum method. He only made 8 trades that year but made a 200% return.

Second, adopt a method that suits your personality. Time is typically a factor with part-time traders and many find that swing trading, trading in the intermediate time frames, and trading options can give them the potential returns they look for while fitting the methods to their own personalities. One trader I know of is a writer but trades momentum stocks off of the weekly charts. On the weekends he checks his charts, adjusts any stops if he has any positions, and enters buy orders for any setups that may show up in only 5-10 minutes on the weekend. In the last 8 years, he has never reported a losing year and in 4 out of the last 8 years has had returns of 100% +. Another trader I know of swing trades stocks on a simple pullback method he developed using a simple indicator while still working as an engineer at one of the major auto manufacturers and during his first year he reported profits of over $200,000. Each of these traders found methods that work along with their personalities.

The third thing that aspiring part-time traders must do, as well as professional traders, is to absolutely have a system of risk control in place. It is almost universal trait that traders of all levels of experiences focus more on entries rather than exits. Containing your losses is going to 90 percent of the battle for part-timers because many will not be in front of the screen and must learn how to set stop loss points, learn when to reduce or increase the size of the position, and how to use diversification to control risk. If a trader loses his capital then can’t play this game and, in some instances, without proper risk control a trader can end up owing a lot of money if they traded on margin!

The fourth key that’s important for aspiring part-time traders to keep in mind is to identify low-risk trades and be more selective. If there are a handful of stocks that are offering compelling reasons for a long position spend some time and research them closely to select the best one or two. Which ones are in the strongest industries? Which ones are in the strongest sectors within those industries? Which ones are the strongest subsectors within those sectors? Is there a stock that has the strongest fundamentals or gives the strongest technical setups to trade? By spending a few more minutes and examining the key criteria that you look for in a trading setup you can potentially lower your risk and raise the probability for a profitable trade by becoming more selective in identifying low-risk trades.

The fifth key for part-time traders need to have is an edge. An edge is any trading technique, method, or tool that gives that trader an advantage that can be exploited for trading profitably. An edge can be how a trader reads charts, studies price/volume relationships, selects stocks to trade, a system of trade management, or reads price patters. One very famous swing trader uses technical analysis, chart patterns, and volume studies to trade. In the late 1990, he turned an $11,000 account into $43,000,000 in only 23 months! Edges can be very simple tools that a trader has refined and has great skill in trading with.

The sixth key is learn how to be at peace with the inevitable losses that come from being involved with the market. When we are young we learn how to exist within a structured environment thru a series of rewards and punishments. In your home as a child, your parents would reward your good behavior and punish your bad behavior. As a result, you learned your boundaries and how to exist within that structured environment. When aspiring traders come to the market, however, they find that there is no structured environment and that the rules they learned when they were young no longer apply. The keys listed here are to help you survive and eventually prosper but you must relearn your own behavior in order to find the success you seek in the markets. If you can learn to love your losses while sticking the rules of trading you have set up for yourself then you are on your way to financial success. But if you lose sleep at night or in a constant state of anxiety because you fear taking a loss or have experienced a loss then you need to stop trading till you find the kind of peace that successful traders have come to understand that losses are just part of the business.

Finally, the seventh fundamental key for successful part-time trading is developing self-awareness. Every trader, beginner or professional, must be aware of personal weaknesses that may impede trading success and make the appropriate adjustments. From my own experiences, observations, and research, I have come to the realization that all traders experience confusion, frustration, anxiety, and the pain of failure. Self-discipline, determination, and self-control are key attributes one must have or develop within themselves in order to reach the pinnacle of success they seek in trading or any part of their life. Fortunately, these key attributes are not inborn but can be learned and strengthened much like you exercise a muscle which becomes stronger in time. You only have to spend some times developing your self-awareness and then once you have a grasp of your strengths and weaknesses you can create a plan to take action on them. This is fundamental for you to be at peace with the daily swings in the market as well as your own emotions in dealing with the market.

These seven keys for successful part-time trading are going to be fundamental truths to discover the kind of success you desire in trading the markets. Part-time traders often have many advantages over those traders who watch the markets all day and it has been proven that many part-timers are just as profitable. However, many would-be traders spend a lot of time on the external things like trading systems, stock newsletters, hot tips, and the like but rarely do the fundamental truths in real trading. Sadly, even rarer do they succeed with their own trading goals because these simple keys aren’t as flashy as the latest $7,000 trading software or $5,000 daytrading seminar. By devoting some time to work on these seven keys now and throughout your trading you will build a stronger foundation for your success.

There are several things to consider before getting started in forex currency trading. Initially, you'll need to selct a broker that is right for you in order to facilitate your trades.

Compare Brokers for Better Profitability

The spread generally referred to as the bid/ask spread is what brokers charge instead commission fees. While comparing brokers you’ll notice that spreads in forex currency trading fluctuate much like in the stock market. Make certain you’re receiving the lowest spread available because it means more profit in your pocket.

Use Qualified and Reputable Firms

Forex brokers are typically associated with large banks due to the large amount of capital that is required to operate in the forex market. Make certain the forex brokers you’re considering are registered with the Futures Commission Merchant (FCM) as well as regulated by the Commodity Futures Trading Commission (CFTC) as a registered National Futures Association (NFA) member.

Evaluate Research Support Services

Forex brokers offer various trading platforms for traders like brokers in other markets do. These trading platforms provide real-time charts, technical analysis tools, real-time news and support for various trading systems.

Prior to committing to any one broker use free trials and practice accounts to compare trading platforms and services.

Keep Your Leverage Options Open

Leverage is a ratio of total capital available to actual capital which is the amount of money a broker will lend you for trading. Take for example the ratio of 10:1, this means that your broker will lend you $10 for every $1 of actual trading capital.

Select a Trading Account That Fits Your Budget

Forex trading brokers offer several accounts. The smallest account you can open is the mini account that only requires as little as $300. The standard forex currency trading requires a minimum of $2,000 initial capital to start and gives you an option to trade with a variety of leverages.

A premium account can require $5,000 – $10,000 to get started. It offers the same leverage options as the standard as well as additional tools and services. At the end of the day, select the broker that has the right leverage, tools, and services that meet your budget needs as well as your investment goals.

Basic Forex Trading Strategy

Forex trading strategy begins with fundamental and technical analysis. Here’s why each analysis is important for creating a solid forex trading strategy:

Fundamental Analysis

Attempting to value company stock is sometimes difficult. But valuing a country’s currency is a different ballgame altogether. Fundamental analysis is mainly used to foresee and better understand long-term trends in the currency market.

The overall political, economic, and social climates of a specific country are the primary issues measured in fundamental analysis.

Technical Analysis

Technical analysis is widely used to analyze the forex because it identifies and measures sustained trends. Some specific examples of technical analysis used in forex are:

• The Elliott Waves
• Fibonacci Studies
• Japanese Candlesticks
• Pivot points

Successful traders use a combination of the above to make more accurate predictions. Others prefer to create trading systems to consistently identify buying and selling opportunities.

Choosing Your Strategy

I recommend a combination of fundamental and technical analysis to develop a personal forex trading strategy. Your strategy will consist of three vital factors; the currency pair you trade, technical indicators for entry/exit plans and risk management.

One of the big reasons that forex trading is an entirely different animal than stock trading or futures trading is leverage. Forex trading leverage can be enormous, as high as 400:1, and in most cases you get to choose the amount of leverage or gearing you want to trade with.

Super high leverage is a selling point for many online forex brokers. How many times have you seen the tout ‘control $100,000 of euro for $250’? Those numbers are correct, and, yes, the profit potential of super high leverage is compelling.

This article neither encourages nor discourages forex trading at super high leverage. That’s a personal decision, but a decision that can only be made sensibly with a professional understanding of all the implications of leverage and what they mean to your chances of prospering at forex trading. It’s probably fair to say that unless you have a professional understanding of leverage that your chance of even surviving at forex trading is slim to none.

One of the fundamental terms of forex trading is PIP. You will see that XYZ Broker charges 3 PIP per deal, or that the XY currency pair has an average daily range of 100 PIP. We all know that the value of a PIP is a variable that differs with each currency pair, but did you know that the value of a PIP also varies with the current price of the base currency, and with the gearing on your account?

For example, with EUR/USD at 1.2723 and leverage at 100:1 the amount of a PIP is $7.86. At 200:1 leverage the PIP value doubles to $15.72. For forex traders with different gearing a 100 PIP move means entirely different things to their account equity.

Here’s a new way to look at leverage with the “K Factor”. The three most common leverage ratios available from online forex brokers are 50:1, 100:1 and 200:1. The K Factor for the 100:1 leverage ratio is 1. The K Factor for the leverage ratio of 50:1 is .50, and the K Factor for the leverage ratio of 200:1 is 2.

How can you use the K Factor?

There are three ways to use the K Factor. The first is using the K Factor to calculate the value of a PIP for the currency pair you are trading.

Since 100,000 individual currency units (usually dollars or euros) is the normal size of a single lot you can calculate the value of a PIP with this formula:

(100,000/current price with no decimal) * K Factor = PIP

Here’s an example: The EUR/USD current price is 1.2723 and your leverage is 100:1. With these facts the formula is:

(100000/12723) * 1 = 7.86.

The value of a PIP is $7.86. If your forex broker executes your trade at a spread of 4 PIPs you are paying $31.44 for executing the trade whatever euphemism the broker happens to be using for ‘commission’. If your leverage or gearing is 200:1 that execution will cost you $62.88.

The second way you can use PIP and the K Factor is to quickly determine the potential profit in a trade, or to know to a certainty the actual dollar risk in a stop-loss setting.

For example, if you go long the EUR/USD at 1.2723 and anticipate a move to 1.2850 what profit can you anticipate at 100:1 gearing?

12850 – 12723 = 127 PIP * 7.86 = $998.22 – execution cost.

If you objectively set your stop loss at 1.2715 what amount are you risking in this trade?

12723 – 12715 = 8 PIP * 7.86 = $62.88 + execution cost.

The third way to use the K Factor is to avoid what the forex brokers call the “safety net”, and what I call “kill but do not dismember.”

Margin is not a down payment. It’s cash-on-hand, your cash, that the broker uses to protect its own capital account from your mistakes. That’s all well and good because the global forex market will continue to work only if all participating brokers have adequate capital to meet their customers’ settlement obligations.

If losses from current open positions cause the equity in your account to fall below that required to maintain the total number of open positions, the broker’s trading platform will immediately close all your open positions, even when the unrealized loss on any individual position is quite small. Your loss is the aggregate number of PIP per position * K Factor + execution costs. In almost every case that’s just about everything in your account. This is the broker’s safety net because you will not lose more cash than you had in your account (as can and does happen with commodities futures accounts.)

Most people have now become familiar with the concept of arbitrages, and the opportunities which betting exchanges create in order to secure an arbitrage.

As a very brief explanation to those who may be unfamiliar to the term, an arbitrage is the practice of taking advantage of a state of imbalance between two or more markets. A combination of matching deals are struck that capitalize upon the imbalance, the profit being the difference between the market prices.

In the case of the betting exchange, the two markets would represent the back side of the bet and the lay side. In order to create a risk-free arbitrage, a punter would lay a horse at a price, and then back the SAME horse when it's odds have increased. The same applies to backing a horse, and then LAYING the same horse if it's odds decrease.1. Who do the top tipsters predict will win the race?

It is incredible just how huge the level of influence these tipsters have on the uk race market. Many top tipster have become household names, with the Sun's Templegate and the News of the Worlds Pegasus being two of the more common ones. If Templegates 'NAP' (best bet of the day) is priced above 5/1 more than 60 minutes before the race is due to begin, and there isn't any odds-on favorite in the same race to oppose it, the NAP's odds will regularly tend to decrease. In this situation You would back early, and then lay the horse closer to the start of the race as it's odds decrease. This will help you secure the arb.

A good source of NAPS can be found at http://www.dailynaps.co.uk which provides a free daily race-card of uk naps.

2. Watch for changes in the weather!

This may seem obvious to some, but the changes in the weather can adversely affect the outcome of a race. For example, you get up at 6am and hear on the news that there is a high probability of rain later that day. You notice on the exchange that the odds-on favorite in the 3:30 at Ascot is trading at 1.6. After some checking, you see that this favorite has only ever won on firm ground. If it does happen to rain, the ground will soften, and the likelihood of this horse winning decreases. So in this case you lay the horse early, and closer to the start of the race the odds should drift out, which is when you then back the horse. Again, creating an arb.