onlinefinancialtrading.com

Forex Spread Betting – The Missing Link

“You can get rich with forex”. That’s the message we see so often from purveyors of phoney forex trading information and software, who don’t actually trade themselves.

The tragedy is that not only is this a lie, in the sense that the information being sold invariably will not make you rich, but the victims of it are usually people desperate to replace a lost income and who simply cannot afford to throw what money they have left down the drain, or worse still, get into debt they cannot repay.

Why do these forex systems not work? Briefly, because the forex market is manipulated and yet volatile at the same time. Yes, we know it’s supposed to be so huge that nobody can manipulate it, but the fact is that it’s dominated by no more than around 20 multi-national banks, who have thousands of experienced, market-hardened forex traders working for them round the clock.

These traders make returns for their employers of around 30 per cent a year. This is a truly impressive return, especially now, when interest rates on deposit accounts give hardly any return at all. But compare it to the fantastic claims made by forex information sellers – typically that you can start with a few hundred and be making thousands a week within a couple of months.

If the market-hardened traders working for multi-national banks and who have all their millions to trade with can’t make such proportional returns, what hope has the newcomer, unused to trading in the financial markets?

Well, there is some hope, actually, and the missing link is this: day trading.

Everyone purchasing information or software promising to make them rich from forex is directed towards day trading. That is quite simply insane advice. The traders who actually succeed in making money from trading forex seldom do any day trading, i.e. opening and closing a trade the same day.

Nearly all successful trades in the forex market last at least a week or so, often several months. The main reason for this is the volatility in the market. When all the indicators and all the latest news says a currency pairing has to go up, it may well go down 50 or 100 points before it goes up. Or it may go up 20 points and then go back down 50 points before resuming its upward course. That’s just the way forex is – you can’t do anything about it.

But if you’re trading with just a few hundred, or even a few thousand, and have tight stop loss levels of just 20 or 30 points, as instructed by all the so-called experts selling phoney forex courses, then you’ll end up losing all your money. You may have one or two successes but they will soon be eclipsed by the losing trades that you will inevitably have.

Successful forex traders have learned how to cut out this weakness. They trade will sufficiently large stop loss levels, so they can withstand the volatility in the market. This means they have to have at least a couple of thousand in their account, and trade at no more than one dollar (or pound, or euro, depending on their own currency) per point until they have thousands more in their account.

They also take a long view. They disregard any short-term signals, which are completely unreliable anyway, and have their trades open for at least a week, and more usually several weeks.

Of course this is a simplified explanation of how to really profit from international currency trading. You really need an experienced and successful trader to copy, and you can do this quite easily, and not too expensively. And don’t take any notice of the wild claims of the sellers of forex information, who you will find don’t actually trade themselves, but make money selling their phoney “information” that doesn’t actually work.

You’ll find that there are far more profitable financial markets than forex. Just go to our home page and complete the form for your free mp3 interview with Vince Stanzione, Secrets of Successful Trading, to find out more.

Philip Gegan

Online Stock Trading Software – How To Use It For Maximum Profits

Online stock trading software – it had to come, and it’s well and truly arrived now. You can even get “robots” that do all your trading for you – at least, that’s what it says on the box. But, whichever one you select to help you make trades, how exactly do you use it, and how much can you rely on it? Can you stop having to keep abreast of news and developments in the market?

Before we get into that, let’s check our priorities. And number one there must be to select one that is right for you. As someone seeking to be a successful financial trader, or investor, you should select one that gives you the information you need, without burdening you with masses of data that you’ll never get through. So, should it be one that is a “robot” or makes recommendations, or a simpler one that merely provides raw data, charts  and a few indicators?

I believe a simple program that nevertheless covers a large range of financial markets and instruments is ideal. Whether it comes from your broker or not isn’t so important, though probably a program independent of your broker is preferable. “Robots” and other programs that “suggest” trades are too unreliable for the serious trader. They are for games, not for putting your real, hard-earned money on the line.

The key point is this. All the successful financial traders use online stock trading software strictly as a supplemental aid to making trading decisions. Their actual trades reflect the information they obtain, not from this software, but from simply keeping abreast of developments and news in the particular market or markets that they specialise in.

And this is what I suggest you do as well. Copy the successful traders, and specialise in just a few markets. Get to know the company and its stock before you put money down on its expected price movements. Get to know the commodity, if you’re in commodities, and any production problems, what the likely demand is likely to be in a few months’ time, and so on. If you prefer international currency trading, study the currency pairings you plan to specialise in, get to know the state of the economy of both countries concerned, their prospects, their problems, and the way they intend to deal with them.

You can easily obtain this information from newspapers and magazines, and on the internet, from specialist web sites and forums. Once you start doing that, the charts and indicators you study relating to the same market will start to make sense. The wise beginner will resist the temptation to trade with real money at this stage, but will use a demo account or simply trade on paper until he is confident he has mastered that market and can predict what is most likely to happen.

Too many people trading for the first time make the mistake of thinking the software program they use can give them all the information they need to make profitable trades. Probably it can’t. There’s something else, and it’s not just research of the market that I mentioned above. But it is something your financial trading mentor can tell you.

You’ll find a strong clue in your free copy of my mp3 interview with Vince Stanzione, Secrets of Successful Trading. Get yours from OnlineFinancialTrading now.

Philip Gegan

International Currency Trading – 3 Golden Rules

International currency trading, or forex, is back in favour again as the recession forces more and more people to search for other ways of making a living. Unfortunately many of them will end up losing money and making matters worse for themselves and their families.

These people invariably trade by way of spread betting. If you are thinking of doing the same then here are three golden rules to help you avoid the fate of the 95 per cent who fail.

1. Open a demo account first, and keep to that for two or three months

One of the most useful things online foreign exchange brokers provide is the demo account, where you can practise trading in forex without risking real money. You should take advantage of this and run one for at least two or three months, trading with it every day, before you open a real account.

Treat the “make believe” money as if it were real. Of course, it’s fun to be trading with big numbers, and many traders start trading at $10 or $20 a point just to see how “quick” they can get “rich”. But remember that at this stage it’s not how much “money” you make or lose that matters, it’s the number of points you earn.

Select just two or three currency pairings to trade. Don’t try to master every currency there is to choose from in a matter of months – you won’t do it. Keep to those two or three and get to know them intimately. Study the charts, but also keep informed of news and developments that will have an impact on the price. This takes some dedication that most people, who ultimately fail, just don’t have.

2. Avoid small stop losses

International currency trading is subject to great volatility. The market frequently doesn’t react as it “ought” to react. Often news, whether good or bad, has already been leaked and the market has “discounted” it by the time it breaks.

At other times the market behaves in an extreme manner, shooting up or falling by a hundred points or more in just minutes. It can have “reversals” at any time before resuming its previous course. All the charts and indicators now available will be of little help in trying to predict all this.

Amazingly, many of the so-called experts selling their courses and information, robots and other software on making money in forex instruct their students to set up tight stop loss levels. This is meant to protect against large losses when the price suddenly moves against you. Whilst you prevent a single large loss, the trouble is that you tend to collect several small losses very easily, and these add up to a very large overall loss.

You can only survive by having realistic stop loss levels. Your risk on each trade is therefore large, even if you are staking only $1 a point. This, unfortunately, is a fact of life which we can’t change. All we can do is act in accordance with the third golden rule, which is . . .

3. Learn currency trading from a successful financial trader who is willing to teach you

You’ll learn that the only people who make money through day trading forex with a spread betting account are the big banks and financial institutions who have countless millions to trade with. The forex market may be the biggest market in the world but it doesn’t mean that it isn’t manipulated. It is dominated by the world’s 20 or so largest banks, and it is their traders who make the money at the expense of small traders, mostly new to forex.

You’ll learn that the smart way to do international currency trading is not through spread betting (unless you too have millions to trade with) but through other methods such as covered warrants, where you don’t get stopped out by the volatility. Warrants may not be as fast as spread betting, but you stand a far better chance of making money with them.

To learn more, just go to our home page and complete the form for your free mp3 interview with Vince Stanzione, Secrets of Successful Trading.

Philip Gegan

So You Want To Learn Currency Trading?

The whole world wants to learn currency trading, or so it seems sometimes from the numbers buying the courses, the “robots” and the information on forex, and signing up with a forex broker. Most of them are going to fail, we know, but a minority will succeed in making regular profits.

Let’s have a look at just three things that every newcomer to forex should have if they are to stand a chance of success in this treacherous market.

1. A Demo Account.

This is available from almost any foreign exchange broker. You can have as many as you want but one should be enough, with funding of $10,000, usually, of make-believe money.

Treat this as if it were real money, if you want to really learn. Of course you can have some fun trading it at $20 a point to see how much “money” you can make in a day, but, really, you should use it to learn, and to do that you have to pretend it’s your own real, hard-earned money.

Don’t trade everything. That’s what losers do. Pick and choose. Study your currency pairings and keep them to just two or three. Get to know everything about them intimately. Then when you see a chance for profits, jump on it. That’s what the professionals do.

The objective is very simple – to show a consistent profit from one week (or month) to the next. You can learn to do this trading at no more than $1 a point. Over 95 per cent of newcomers to currency trading fail to do this, and most of them will have skipped or severely shortened the period when they actually learn currency trading by way of a demo account. Don’t let this happen to you.

2. The Simple Moving Average

The simple moving average is the only indicator, out of the dozens available, that most highly successful financial traders, like Vince Stanzione, use. It is usually used in double format (though you can use more), e.g. a 5 day moving average and a 75 day moving average. When the shorter moving average crosses the longer one it is often a signal – to buy (or close a short position) if moving up, and to sell (or close a long position) if moving down.

Just make sure you learn this aspect of currency trading thoroughly. Decide early on which currency pairings you are going to profit from and keep to those. Work out which two lengths of simple moving average give the most reliable indication of imminent moves in price, whether you’re day trading the currency market, or trading longer term.

3. A Mentor who is a Successful Currency Trader

This is your third vital ingredient, and is to be differentiated from someone simply selling information or software on how to get rich in forex. I mean someone who actively trades in the foreign exchange market and can prove that he has made consistent profits.

It’s a mistake to think you can succeed on your own. Even the most successful traders have invariably had expert guidance at important points in their career. You’ll know here I’m referring to Vince Stanzione, who has made his millions in the financial markets.

To learn currency trading properly is a most profitable and worthwhile activity undertaken by a tiny minority of traders in the currency markets. Make sure you become one of that minority.

Just go to our home page and complete the form for your free mp3 interview with Vince Stanzione, Secrets of Successful Trading.

Philip Gegan