Friday, 7 February 2014

Discretionary Trading vs. Robots

I have been trading for more than 15 years now.

When I first started, in 1994 as far as I remember, there wasn’t a lot of softwares on the market and of course we didn’t talk about forex yet.

But, “magic systems” were already spreading over the web. You were finding different kind of gurus selling their black box that only professionals use, of course, promising you a fortune in a matter of days or even hours…

One after the other, the gurus disappear leaving place to others.

Today, you can find thousand of “wonderful” systems if you type “trading system” on any search engine. You may read numerous articles promoting the success of such expert advisor or trading robot.

Speaking of robots, it’s amazing how people believe in automatic trading. They think they can go to work in the morning, leaving behind them this wonderful robot catching pips on the forex market all alone. Have you been given the chance to get this ultimate trading system only used by banks or institutionals ? Just be patient, a smart guy will soon propose a good one, maybe the best.

I use an ironic tone on purpose because I am tired to see all this disillusion from people who still believe in Santa Claus. Get back on earth, my friends, there is no easy way to earn money on the financial markets. Most of the traders, living from their activities, won’t share their work with you.

The good news is you can learn to trade by yourself. Today, you can get very good trading courses on the web, free or not. You have access to valuable ressources if you take the time to select websites.

Now, what are we supposed to do with all these trainings and advices, you might ask?

Well, if you want to be successfull in trading, whatever the market, you will have to learn to become a trader. You will have to develop your system, or trading approach, and adopt a good attitude through a back-tested money management (the one you feel confortable with and which works).

So, as a summary:

learning the trading basics from books or online ressources (technical analysis etc.)
develop you own trading system which could be as easy as efficient
use a money management system which is a necessary condition to make your trading system profitable
learn how to behave properly while trading (have you heard of the emotions control…)

When I use the word “system”, I don’t make reference to any automatic trading or robot. Besides the fact I can’t stand automatic systems, it has been proven that systematic trading doesn’t work on the long term.

Why is that ? We know that patterns always repeat themselves cycle after cycle so we could imagine a easy way to benefit from this repetition. The answer relies in the human being behavior on the market. Traders are filled with emotions like greed or fear. Even if most traders now recognize the usual patterns and knows how to follow a trends, most of the time they let themselves overwhelmed by emotions when the market doesn’t react like it should…

That leads this question: why discretionary trading works?

Dicretionary approach consists in following a trading system (because you always need some king of system) through the human eye. A trader, controlling his emotions and analysing the market with objectivity, has the ability to understand the market crowd represented by all the traders. He will be able to understand the excesses and adjust his trading accordingly.

A robot will enter a position as soon as a resistance or support is broken or when a 38% fibonacci retracement has been reached etc. Of course a trader would initially adjust his robot parameters according to his strategy but he won’t be able to “play” new market conditions for exemple.

The market likes to defeat all automatic systems which tend to setup logical stop losses and profit targets. Have you ever seen the wonderful spikes on the forex market, in particular after news releases…

A discretionary approach will never prevent you from losses. Any trader will suffer from losses. It is part of the activity. If you don’t want to loose, you should try no-risk investments offering 2-3% a year.

But at least, you will always control what you are doing, knowing exactly what the market is leading and if this is a good moment to enter a position or not.

You have obviously a set of rules, explaining the “when & how” you enter a position, but you may adjust your strategy according to certain market conditions.

Be careful though. You need to stick to the plan you implemented when developing your trading system and money management. It’s a very important aspect of the trading. But once again, there is no automatic entry position. For the exits, it’s a bit different because you can set a profit target in advance and exit the position automatically. You developp this aspect in your money management rules.

I hope I gave you the desire to become a real trader using a discretionary approach, far from automatic systems which definitly don’t work. Trading can be fascinating if you give yourself the means to do it properly.

by Sebastien Duval

source:Kewords: Forex Currency Trading, Forex Forecast, Forex Learn Trading, Forex Mini, Forex Mini Account, Forex Mini Trading, Forex Trading, Forex Trading Platform, Forex Trading Software, Forex Market, Forex Strategy, Forex Signal, Forex Forum, Forex News, chicbull.com

Important Lessons to Get You on Your Way to Profitability

Trading in the foreign exchange market is not based on any rocket science as there is no such thing called holy-grail in it. There are numerous things in it that you learn by the time and whatever you know today about it; chances are that after a few months you would think how less you knew before. Optimizing the number of green trades in your account can only be possible by your experiential learning; had reading the books were the only key to profitable trading then almost all of us would be rich within no time.

However, if you don’t have enough expertise then you could at least learn from other traders experience and the tactics they followed that didn’t work out. Let’s have a look at some of key lessons that would certainly help you out in maintaining trading discipline and optimize profits.

1 – Control your Emotions

Never let them interfere while you are trading. Greed and fear both are detrimental as having greed for more profits usually ends up in losing the already-earned money. Fear of losing your trades compels the trader to close the position at loss and he does so too, and soon after that he realizes that the market has started moving in his favorable direction. Therefore, the market always supports those who keep calm, are patient with their trades, and avoid getting overwhelmed by unfavorable market movement.

2 – Say No to Overtrading

Once the trader has incurred loss in previous trades, he thinks to cover that loss up and enters the market again thinking that he would cover it up easily. But unfortunately, he keeps on losing more as the positions entered were based on emotions rather than rationale. This really brings his confidence level down and his fear increases due to which he often fails to enter in the market when the direction is clear. So opportunity cost doesn’t let his account grow.

3 – Trading Style & Session

Trading styles differ among traders, depending on their time feasibility and ease with which they can trade. However, most traders prefer trading in the European or U.S session as the market usually does not have choppiness in it and has 80% probability to move in one single direction.

4 – Closing the Trades

The fundamentals including the speech or conferences by the policymakers have been reflecting a deep impact on the market, so it is highly recommended for the traders to close their positions before such events as the technical points normally fail because of high volatility. Plus, don’t forget to close your trades on Friday before the market closes for weekend because you never know what news or decisions might come up by the policymakers on weekend, due to which the market may open in huge gaps.

5 – Trend is your Friend

Breakouts occur both in the bearish and as well as in the bullish trend, but that doesn’t mean you try to make the most out of the market and enter the market ‘against’ the trend to get each and every pip in your favor. Always follow the trend; for instance in a bullish market when you see a bearish breakout, selling is not a good idea rather you should buy more on the dips. The same is true for the bearish trend, where selling on bounces may optimize your profits too.

To identify the trend, follow the 200 EMA on daily, four-hour, and one-hour chart where the price moving above the EMA line represents a bullish trend, whereas price movement falling below that line means the trend is bearish.

6 – Adding to your Positions

Once you are done with identifying the trend and breakout, do not enter with a huge lot at that very same price, instead enter small lots repeatedly if the price is moving in your favorable direction. This decreases the risk to a great extent and makes sure that you are getting profits on each trade you enter one after the other. For instance, if you went long on EUR/USD, enter you buy positions after every 5 to 10 pips gap from the initial one, if the price is continuously moving upwards.

If you are new to trading, playing it safe is what you need to focus on along with building up your confidence and balance because once it’s lost at the beginning then you might end up quitting forex trading as it may seem to you as a futile thing.

by Nils Rehfeldt

source:http://chicbull.com/important-lessons-to-get-you-on-your-way-to-profitability/

Kewords: Forex Currency Trading, Forex Forecast, Forex Learn Trading, Forex Mini, Forex Mini Account, Forex Mini Trading, Forex Trading, Forex Trading Platform, Forex Trading Software, Forex Market, Forex Strategy, Forex Signal, Forex Forum, Forex News, chicbull.com

REST — the Key to Success in Financial Investments

In order to be profitable in any form of investment, a trader needs to put every defining factor into perspective. Although the market is dynamic in its nature, it is important for every trader to have some established rules that govern their trading. This means that by fixing some aspects of your trading, you are indirectly taking care of your emotions, and thus giving yourself an edge to succeed in your chosen investment. “REST” above stands for Risk, Entry, Stop loss, and Target, and in the following paragraphs, I will explain why it is important to fix the above parameters if one aims at becoming successful in trading.

RISK: This is one easily overlooked aspect of trading. It is nothing but wise for any trader to be conscious of the risk that they are taking in any particular trade. Before taking a position, traders need to know how much money they might lose, and make sure it is within their comfort zone before they place the trade. Without proper risk management , traders cannot make defined claims on the profitability of their trading approach. For example, a trader might be over- risking during a losing streak or under-risking while they are scoring home runs. There are many different models of risk management in the investment world; however, there is one very nice model that requires a trader to risk a fixed percent of their equity in any trade that they take. The aim here is to increase your profitability during winning streaks while reducing your potential losses when the losing trades surface. This is the model that I personally use for my trading and it works well.

ENTRY: Based on the experience that I have garnered over the years, I have come to believe that it is also very important for traders to have a fixed entry for their trades. This might sound a little confusing; nevertheless, it is pretty simple. Anyone who has been around the block for a while should know that round numbers are good levels of support and resistance. These are numbers that end in .50 or .00; for example, 1.4200, 1.4250, etc. The reason behind this is that most of the big investors tend to base their entry and exit at round numbers, thus causing a change in market bias at those price levels. That being said, not all round numbers serve as entry prices, but when they are in the neighborhood of a bullish or bearish confluence, they tend to serve as near perfect entry levels.

STOPLOSS: before entering a trade, it is important to have pre- determined stop loss levels and actually place the stop loss order while you are placing your entry order. Under no circumstance should you move your stop loss further away from entry price after you have entered a trade. If there is need to trail your stop loss, it should be towards the entry or against the direction of current market bias as a way of minimizing potential loss. One big mistake a lot of traders make involves the idea of mental stop loss. This basically means that the trader determines a stop loss level; however, they don’t actually place the stop loss order but are willing to manually close the position should price get to that level. Please, this approach is not acceptable in the world of profitable trading. I mean, if you already know the price level you are willing to exit your trade, why can’t you just place it as a stop loss order? It is that simple. Market volatility can change instantaneously, thus moving price hundreds of pips in a couple of minutes. For example, on 6th September, 2011 during the SNB intervention, the Swiss franc pairs moved more than 800 pips in less than 5 minutes! Imagine you were using mental stop loss and stepped out to go and get a cup of coffee just to come back 5 minutes later and see your live account in red. Remember, such news is not usually posted on economic calendars. So, be warned.

TARGET: Just like in the case of stop loss, it is also necessary to have a pre- determined profit target level before entering a trade. Don’t let your emotions take charge of your trading by deceiving you to believe that the current market volatility will continue in your favor past your target level, thus causing you to get greedy by modifying your target in search for more pips or worse still, remove it completely. Fix your targets and make sure they are logical also. The market usually shows repetitive price patterns, and you can benefit from this by reading price action and setting your target levels accordingly.

It is only when you fix the “REST” above that you can have some rest and leave the rest to the market.

by Chinedu Ilobinso

source:http://chicbull.com/rest-the-key-to-success-in-financial-investments/

Market Mechanics — Understanding Market Movements in the Foreign Exchange Market

Have you ever wondered what causes price movements in your forex charts? Or why the market usually retraces at some point even in clearly established trends? Or better still, why some retracements finally become strong enough to form a whole new trend? This article is aimed at answering the questions above. Notice that a good understanding of market mechanics will definitely help you as a trader by fine- tuning your entry, exit, and stop loss levels, thus yielding better trading results.

Before we delve into the topic, I will like to explain four major reactions that lead to price movements, and in what direction each of them effects their movement in the market.

Buyers entering the market: definitely, buyers entering the market will create a bullish reaction, thus causing upward price movement.
Sellers entering the market: in a similar manner, there would be a downward price movement when sellers enter the market thereby creating a bearish reaction.
Buyers leaving the market: when buyers are leaving the market, it gives a similar reaction as sellers entering the market. Therefore, this will cause a downward price movement.
Sellers leaving the market: sellers leaving the market will create a bullish reaction, thus causing upward price movements.

At every point in time while the market is open, a combination of some or all of the above is occurring. This means that the final price movement you actually see on your chart is the resultant of the market vectors listed above. For example, if we are in an uptrend, and are spotting bullish market reaction, it means that we have more net buyers than sellers which are causing the resultant upward movement. Now, as the swing tops out, those buyers who have been scoring profits all along will begin to bank their profits, thus buyers leaving the market. When this is happening, it causes a downward price movement as indicated above which we term retracement. Also, some sellers who were able to predict the end of the bullish swing will also jump in thereby augmenting the downward retracement. As price retraces to a bullish confluence below, those sellers, who entered at the top of the bullish swing, will begin to take their profits( sellers leaving the market), and more buyers will enter the market hoping to continue with the trend to the upside- the general result being a net bullish market reaction. The opposite is the case for a bearish trend.

So, what happens during a trend change? Most trend changes are signaled by fundamental analysis or by bigger investors massively closing out portions of their position which are usually huge enough to break levels of confluence in the previous direction of the trend. When this happens, emotion sets in, and other traders around the world will be keen in taking positions against the previous trend. This action increases the net volume in the new direction, thus creating a whole new trend.

by Chinedu Ilobinso

source:http://chicbull.com/market-mechanics-understanding-market-movements-in-the-foreign-exchange-market/

8 Tips To Improve Your Forex Trading

It is a well known fact that the vast majority of Forex traders do not make money. However, on the other hand, I believe many people can massively increase their chances of being successful by following the simple tips below.

Start with a demo account

If you are new to trading, don’t risk your money right away. You’ll probably lose it. Practice on a demo account for a few months, or if you are extremely eager to get started, at least a few weeks. The longer the better really. I know what it’s like at first, you just want to be trading!

Take time to choose your broker

Choosing a Forex broker is not a task to be rushed. There are so many to choose from, all have their own strengths and weaknesses. You can afford to be picky.

Bid/Ask spreads and execution are often the most important factors for short term traders. Longer term traders may want to pay closer attention to the “swap” rates paid by brokers. Especially if you are looking to make money on the interest rate differentials between currencies, such as a long AUD/JPY position.

Make sure you full know your platform inside out

It sounds simple, doesn’t it? But from reading the various Forex forums, it’s amazing how many people talk about making basic errors, such as incorrect position sizing, stop losses, limit orders etc.

Your trading platform is what you are going to be using to place your trading and orders, so it’s vital you know exactly how it works. Play with the demo account until you know the platform like the back of your hand.

Have a strategy and stick to it

Making impulsive trades that are not part of a trading strategy usually ends in tears. Having a solid strategy that has been thoroughly tested is imperative. Never deviate from your strategy, no matter how tempting it might be.

Forward test and back test your strategies first

Many Forex traders like to back test their strategies. This is where you see how your strategy would have performed in the past. There is nothing wrong with this, it can be helpful, but just because a strategy you have created has performed well in the past, there is no guarantee the strategy will work when future testing. This is because when you back test strategies, you are usually “curve fitting” to some extent.

So once you have backtested your strategy thoroughly, be sure to test it on a demo account for a good few months before trading it live.

Use proper risk management

Always be sure that you have a solid risk management strategy and never deviate from it. For example you may want to risk 2% of your entire account on one trade. Perhaps you want to move your stop to break even when your trade is up 1%. Whatever you decide, stick to it.

Never chase the market

I know it’s tempting to make a trade just so you can be “in the market”, but always be patient and get the best possible entry. This can massively lower your risk and improve the chance of your trade ending positive.

Don’t get cocky or arrogant

It’s so easy to get cocky when you have had a long line of winning trades, you can begin to feel invincible. This can lead to rash and impulsive decisions. Remember, when you trade Forex, you are a very tiny fish in a very big pond. You must always respect that to be successful.

by Karl Marrion

source:http://chicbull.com/8-tips-to-improve-your-forex-trading/

Forex Knowledge — 5 Things to Consider Before Trading

In certain aspects Forex has been around us, since there was no electricity in caves. Long ago people always traded currency they had: whether it was food, animals or some shiny minerals. With the creation of modern money (coins and then paper) different nations traded one currency for another. In modern times currencies are widely traded by the world’s major financial organizations. The birth of a retail market in mid 1970s allowed non-commercial players to trade Forex. However, the most crucial change to the industry came in 1996 when Forex trading was put online.

Nowadays, the Forex child grew up and became the real giant. Over $4.5 trillion is traded daily in the Forex market where almost $1 trillion belong to the activity of such traders like me and you. These numbers strengthen Forex reputation and tell us about the broad opportunities for making profit with it. However, where the benefits, there come the dangers. Not every Forex-teaching company tells you about them — these guys need you to be thoughtlessly attracted to trading.

In this article, I want to give you the basics — five steps to put your thinking along the way of desirable profits in this biggest market space in the world.

1. The Hype Makes It Wipe

One trade makes me a millionaire. Hail Mr. Soros! This is what brokers want you to think when you are about to start with Forex. Relax and refer such words to what they call “True lies.” Not a Schwarzenegger movie, but a twisted reality. You can strike rich in Forex — it’s “true.” However, “lie” is that it comes an easy way. If you don’t be disciplined, prepared and patient, your winning chances are close to lottery. Approach market responsibly with a balanced frame, set your goals and stick to them. Like in fishing, success comes to those who wait and then strike.

2. Don’t Stay Hungry

I basically don’t mean that you have to trade Forex after having a nice breakfast. No. Before putting any cent into this venture, think if you are ready to lose it. Don’t leave your family without any food or clothes after betting all on ”black” and losing with “zero.” Trade a capital that you can afford to lose without affecting your common life strongly. As a trader, I have to admit — more than 80% of new traders lead to losses. So think twice. If you are ready to say “good bye” to your investments and still carry on, you have a chance get into those 20%.

3. Read, Listen, and Learn

Like you wouldn’t borrow your hard-earned to some guy Phillip you had met only once. You would not jump into such a risky and volatile market like Forex without knowing “who,” “what” and “why.” Your complete research on the subject should include all the market aspects: how it has developed, where it is going, etc. Study the FX history more carefully than I put in first paragraph. Then you could speak to other traders and hear what they say (e.g. go to forums) about the worthy trading practices, best FX tools and services, the surest tips on predicting the market movements, etc. Also learn to read charts, understand and distinguish the Forex news, and (most important) learn your strengths and weaknesses to work on them henceforth.

4. Use Many Baskets for Your Eggs

The way to success in Forex (if I may call it like this) is thorny so treat your capital with care. Do not put all of your hopes on one trade — use the certain percentage of your equity. Although these numbers are up for debate, but take a loss into account, try to predict where your account will be after you lose a trade. My receipt here: use Stop Losses and Take Profits, trade smaller trades, “kill” your greediness, and DON’T even think to overcompensate for losses. Loss means loss. Extending your Stop Losses in hope the market will reverse itself is worthless. Usually, it does not do that. Your “best friend”, a trend, could become your worst enemy. I would also recommend you to trade several currencies to branch out the risks in terms of trades and currencies.

5. Don’t Let It Go to Your Head

It’s like a deep-town rock band, nominated for a musical award: they haven’t finally won but already turned into mannered and arrogant creatures. As for traders, there is no good for them to get too excited and anxious with trades. Any given second they can reverse. If you let your Forex successes go to your head, it will change your trading philosophy so you might take risks where you never did.

Be consistent and get it one by one. Like deserts are thankful for the rain, be grateful for what you win. And carry on with the current scheme if you are profiting. Stick to your plan and be deaf to your hunch calling to move Take Profit or extend Stop Loss.

As an ”after word” I would like to say thatt Forex marke is immensely huge. You can profit quickly and get large returns. However, if you are betting on ”black” because it’s your favorite color, you can win in casino, but with Forex in the end. Address it like a business (with same responsibility) and it will get back to you with the benefits.

by Alexander Collins

source:http://chicbull.com/forex-knowledge-5-things-to-consider-before-trading/

Understanding the NETELLER Payment System

When choosing a Forex broker, it’s critical that you do your research and make sure the broker is reputable, reliable and regulated. When it comes to choosing a payment system, the same research should be done, so that you can make sure you’re paying the fewest fees and getting the most reliable and secure service. Following the collapse of Liberty Reserve earlier this year, traders have been more conscious than ever about choosing a payment option, and rightfully so. Fortunately, there are several options, among them NETELLER, a long-standing option that has grown into one of the most reliable and respectable online payment systems in the world. We’ve chosen to do a full NETELLER review to help traders (both new and experienced) decide if this is the right payment processor for them, or to see if there’s a better solution than time-consuming wire transfers or risky credit card transfers.

NETELLER is serviced by Optimal Payments Limited which was founded in 1999. For over a decade, NETELLER has been supplying individuals and commercial enterprises with a secure method of moving money from one place to another in a way that is both quick and easy to execute. Today, NETELLER is one of the world’s largest independent money transfer businesses, processing more than a $1billion worth of transactions each year.

Of specific importance is the fact that Optimal Payments LTD is authorized by the Financial Conduct Authority (FCA) for the issuing of electronic money. NETELLER maintains the highest standards for their services around the world using advanced physical and electronic security measures and Anti-Money Laundering protocols such as 128-bit encryption technology, identity verification and real-time transaction monitoring to ensure total protection from identity theft and fraud.

eWallet

The NETELLER eWallet or digital wallet is straightforward to set up and is used for both deposits and withdrawals. There are many options for funding the eWallet account, including free debit card deposits, local bank deposits, credit cards, international bank transfers and many other local options.

NETELLER offers low-cost options for depositing money into your eWallet account or into a merchant’s account. Fees for taking out money with one of their withdrawal options or costs for transferring funds to an individual are far below standard charges. Cashing out from a merchant site can be done directly to your eWallet without any charge for the transaction. Transfers from member to member are also free.

With the NETELLER eWallet, payouts are immediate for both personal and business members and with the option to have payments 100 per cent indemnified from customers world-wide, businesses are protected from chargebacks. The transaction limit at NETELLER is $50,000.

Net+ Prepaid MasterCard

Another transaction option at NETELLER is the Net+ Prepaid MasterCard which looks, acts and functions like a traditional debit card and credit card. The card is linked to the balance in your NETELLER eWallet account. After loading the card with funds, you can make withdrawals at ATMs and purchases at any POS location that accepts MasterCard. There is no annual, monthly or dormancy fees with the Net+ Prepaid MasterCard and no credit checks are required in order to qualify. Because it’s a reloadable prepaid card, you’ll never pay interest, overdraft or late payment fees when you use it and since the card only lets you spend the money available in your account, there is no risk of accumulating debt.

NETELLER is one of the preferred payment methods for Forex traders. The eWallet is available in 13 languages, 19 currencies and offers a host of local options for depositing and withdrawing money online in nearly 200 countries. Together with the Net+ Prepaid MasterCard which uses 8 different currencies–GBP, USD, EUR, CAD, SEK, DKK, AUD and JPY– transferring funds for Forex trades anywhere in the world is convenient and reliable.

Using your eWallet to accept payouts from individuals or other sites and the Net+ card to instantly access the funds in your account at ATMs worldwide is a great combination for moving money for any reason from wherever you may be.

Earn Money

Making transfer transactions at NETELLER can also be a money-making event. The NETELLER VIP program is based upon the transfer activity in a member’s account. There are five VIP levels–Bronze, Silver, Gold, Platinum and Diamond and members are automatically awarded as soon as they reach an activity requirement. A clear table outlining all the relevant information for each account is presented on the NETELLER website.

There is also a Reward Points program where you can earn rewards each time you use your eWallet to move USD or equivalent funds in or out of your eWallet. The points are rewarded according to the VIP account you have signed up for. When you’ve built up your points balance, you can redeem them for electronics, gift cards and even cash credited to your eWallet.

Conclusion

The NETELLER website is well organized and easy to navigate. Information is presented visibly in a manner that invites trust and confidence. A comprehensive FAQ page provides precise explanations of how the NETELLER programs work and how to get started and email, chat support and phone services are available 24/7 to 13 countries. Fast deposits and withdrawals, secure transactions and friendly support make NETELLER a high-quality online payment service for both individuals and businesses.

Source:http://chicbull.com/understanding-the-neteller-payment-system/

Forex Robot Scams

When it comes to investing, there are endless ways to scam a trader. Many brokers manage to get away with their fraudulent activities for a period of time. Then they are either ‘caught’ by a regulatory organization or they succeed in absconding with their clients’ funds, never to be seen again.

Broker scams come and go. Some move underground only to pop up again at a later date. There are always unethical brokers looking for schemes to fool investors and it takes only a few big deals to make the whole endeavor worthwhile.

Still scams must be done in a clever, convincing manner. They must also be convenient for the trader. The easier it is for the trader to seemingly make money, the more a fraud will succeed. The latest entry into the Forex scam market is the Forex robot. Forex robot scams are only now beginning to be uncovered but not everyone concurs that Forex robots are scams to begin with.

Forex Robots

Forex robots or Expert Advisors (EAs) are programs that claim to automate Forex trades. It’s like putting a plane on auto pilot. Traders can sleep through the night calmly knowing that their trades will be placed exactly at the times they designated. Sounds easy, right?

Forex robots are getting a lot of hype of late and Forex robot scams are not far behind. Almost every Forex broker currently offers its account holders the opportunity to use a Forex robot for their trades. They back up the legitimacy of these robots with tremendous profits and lull the trader into a false sense of security only to end up broke.
Most Forex robot scams are easy to pinpoint and would seem obvious to any investor. But even with blatant false promises of huge profits “while you sleep” millions of dollars are dropped into these Forex robot scams every day. Even those brokers that are successful, exaggerate their numbers to attract new clients.

Online Robots

And one needn’t depend on the Forex broker for these robots. Forex Robots are available online. Even Amazon.com sells the software package made available by one Forex company under the heading, “Make Money While You Sleep – Advanced Forex Auto Trading Robot.” Costs for a Robot program hover around $1000 for the package so most traders opt to use the AE provided by the Forex Broker. This is what leads so easily to Forex robot scams.

Since 99% of traders who purchase a robot end up asking for a refund, most experienced Forex traders recommend never purchasing one. Objective Forex traders suggest never putting a Forex robot on a live, real money Forex account until it has been tested thoroughly through a demo account. If the Forex vendor is genuine, then he should advise his traders NOT to use an EA until they fully understand what the robot is all about.

Forex traders who have used robots in the past suggest that traders learn enough about the workings of the AE program so that they can place the trades themselves and not through a broker. This will provide them with a sense that they are in control of their money and are not leaving it in the hands of a broker. This may not lead to profits but it will eliminate the feeling of being taken in by a fraudulent Forex robot scam.

source;http://chicbull.com/forex-robot-scams/

Kewords: Forex Currency Trading, Forex Forecast, Forex Learn Trading, Forex Mini, Forex Mini Account, Forex Mini Trading, Forex Trading, Forex Trading Platform, Forex Trading Software, Forex Market, Forex Strategy, Forex Signal, Forex Forum, Forex News, chicbull.com

How to Choose the Best Forex Robot

With today’s fast paced trading options, choosing the best Forex robot has taken on a major role in Forex trading. The use of a Forex robot is basically one of the methods employed by a trader to buy or sell on the Forex spot market. It is often referred to as ‘autotrading.’ Although autotrading was originally used on the Chicago Mercantile Exchange as far back the 1970’s, it emerged big time with the advent of the internet in 1999. Today, most online brokerages offer Forex robots.

There continues to be a debate, however, as to which is a more beneficial manner for placing Forex trades—using autotrading or employing the service of a human trader. Obviously, an automated trading situation can accommodate more trades per market than any human can cope with. Additionally, with autotrading, trades are placed in real time and a trader can replicate these actions across several timeframes and on more than one market. What’s more, robots are not subject to the emotional ups and downs of human traders.

On the other hand, even the best Forex robot can be subject to scams and frauds. Traders do not always understand how the system works and this leaves them vulnerable to all sorts of broker rip-offs. It can lead not only to traders placing inappropriate trades but can result also in shrewd brokers closing up shop and absconding with clients’ funds. In addition, robots are not easy to set up and choices for customized trading strategies can be complicated for novice traders. If not fully understood, trading activity can go unmonitored and consequently lead to losses.

The Best Forex Robots

Choosing the best Forex robot is not always an easy task. There are hundreds of online brokers with each one touting to offer the best Forex robot software, the most outstanding platforms and the finest technical analysts. The most advantageous way to reach a decision is to speak to people who have used Forex robots for a while. Referrals from experienced traders go a long way in weeding out brokers who do not abide by industry regulation or who are not bona fide Forex brokers. Ongoing Forex traders are also privy to information concerning brokers who have not performed in the manner they promised or are rumored to have conducted business in an unacceptable manner. After all, the robot is only as good as the brokerage offering it.

Likewise, there are literally hundreds of Forex robots that are offered not by brokers, but by individual traders looking to make a quick buck. While some of them may be profitable, there’s a higher chance with these robots that losses may occur. Make sure to verify the robot’s success before registering, and if possible, see if the company is registered or regulated anywhere. If these things aren’t available but the Forex robot still seems interesting, try asking for references or seeing if the company offers reliable testimonials. Without some sort of validating feature, your service of interest may not actually be the best Forex robot available.

Source:http://chicbull.com/how-to-choose-the-best-forex-robot/

Forex Scams

Trading Forex has become very popular of late. Disgruntled stock traders are moving their money out of the equity markets and into Forex markets. Indeed, Forex markets claim to make the investor a great deal of money in a very short period of time.

Because most Forex traders don’t have any deep understanding of how Forex markets work and what the function of a Forex broker is, it is quite easy for a Forex broker to fool the trader through any number of fraudulent schemes. Even many experienced traders fall for a cleverly formulated and subtly executed Forex broker scam.

These Forex broker scams can come in many different forms, but the end result is always the same: The trader loses his money; the broker pockets all the funds and usually absconds before he is caught.

Forex is the largest trading market in the world with an estimated $3 trillion changing hands on a daily basis. Most Forex trades are sold OTC-over the counter-and there is no accountability. Over the years, scams have come and gone. With the serious enforcement actions by the Commodity Futures Trading Commission (CFTC) and the 1982 formation of the self-regulatory National Futures Association many of the old popular scams have ceased. However, new ones are always ready to fill the gap left by the old ones.

Old Scams

The Forex broker scam put in place in the past involved computer manipulation of bid/ask spreads. The point spread between the bid and ask basically reflects the commission of a back and forth transaction processed through a broker. The point spreads differ widely among brokers and differ between currency pairs. Since brokers don’t usually offer the normal two- to three-point spread in the EUR/USD, for example, but go for spreads of seven pips or more, any potential gains resulting from a good investment were eaten away by commissions. These commissions found themselves in the broker’s pocket.

Today, it is unusual to find a broker that claims he takes a commission. Don’t be fooled by this promotion. He is still making his money from the difference in the spread but spreads are now regulated and only smaller spreads are permitted. However, there are still offshore retail Forex brokers who are not regulated by the CFTC, NFA or their nation of origin and it’s quite easy for these firms to pack up and disappear with the money when confronted with investigations of irregularities.

Many U.S. based violators still exist ready to defraud their account holders with this type of scam. Forex broker scams never disappear totally.

Commingling

Another subversive scheme used by some Forex brokers is the commingling of funds. Individuals cannot track the exact performance of their investments without a record of their unique accounts. Commingling funds gives Forex brokers the opportunity to pocket much of an investor’s money without the client ever noticing any discrepancy. The broker benefits financially during the trading and eventually disappears with a customer’s money.

Despite the introduction of Section 4D of the Commodity Futures Modernization Act of 2000 which addressed the issue of segregation, there are still innocent traders who get taken in with promises of huge profits by these Forex broker scams.

If a Forex trader looks carefully and states vigilant he/she can pick up are certain warning signs which can alert him/her when all is not on the straight and narrow. If a broker won’t allow the withdrawal of monies from investor accounts or if problems exist within the trading station, the trader should take immediate notice. Additionally, guarantees of high performance levels-some much higher than those offered by other Forex brokers-should be viewed with considerable skepticism.

EA-Robots

In order to keep profitable, unethical Forex brokers continue to come up with new scams. Presently, most Forex broker scams are in the form of trading systems. It seems that overnight, brokers have begun ‘selling’ automatic trading systems which can generate automatic trades even when the trader is sleeping. Most of these robots have not been tested by an independent source for formal review. Their trading system’s parameters and optimization codes are usually invalid and at the end of the day, the system generates totally random buy and sell signals.

The trader almost always loses.

There are plenty of Forex brokers out there that promise the world and don’t delivery. They perpetuate the already well-established illusion that Forex is simply a form of gambling with no understanding or forethought necessary.

Source:http://chicbull.com/forex-scams/

Thursday, 6 February 2014

The Importance of Technical Analysis in Forex Trading

When learning about technical analysis, understanding why it is important can provide the motivation to understand the basics in a more comprehensive way. While the importance of technical analysis varies from market to market, the currency markets seem to be especially influenced by them.

All the Cool People Are Doing It

The very first reason that technical analysis is important is the simple fact that so many traders study it. While there are a lot of magical indicators and systems out there, or at least claims of them being so, the truth is that some parts of technical analysis probably work simply because so many people believe they do. It is a bit of a “self-fulfilling prophecy”.

At its core, technical analysis measures where supply and demand meet. In other words, where there are more contracts of a financial instrument available than the amount wanted, or vice versa. The very fact that a good technician can identify where large amounts of order are coming into the market will give them a “heads up” on where they may want to be involved in the markets. Even those traders who shun technical analysis will often have a general idea where these major areas are.

One of the most common forms of technical analysis is Fibonacci based. The mathematician Leonardo Fibonacci discovered during the Renaissance that there is a natural order of repeating numbers in nature, from the rivers to the mountain tops. There are many crops that will reproduce using these ratios, and they can even be used to measure human features. Suffice to say, someone got the idea of applying these percentages to a chart, and the Fibonacci retracement tool was born. Is there any magical significance to these numbers that makes for a better trader? That is hard to tell, but the very fact that so many people believe in it makes the levels seem to work over time. If enough people believe in something, it eventually becomes so.

Ignoring Your Inner Voice

Another reason to look at technical analysis before placing a trade in the Forex market is because it will help reduce the urge to trade based on your gut reaction, which a common way in which traders lose money in the Forex market, and a bad Forex trading habit that is hard to break without an alternate solution.

The realm of technical analysis includes many different types of indicators. Some measure the strength of the trend, while others will measure momentum as related to the current move. The field is very wide and varied from trader to trader, but the reality is that a lot of large firms hire technical analysts to help with their trading strategies. With this in mind, you have to understand that there are a lot of large players out there that at the very least are paying attention to the technical and who are trading accordingly, which means it’s probably a good idea for you to do so as well.

One thing that most traders would be well advised to take into account: technical analysis is a great way to look at the markets and to predict the trends, but it is simply a tool and not the only form of analysis that a trader can use. Most technical traders will also use a bit of fundamental analysis and perhaps even news analysis to line up the best trading opportunities. However, there is a something to be said for the idea that all available news is present in the charts, and technicals focus on the “what” instead of “why” a pair will move a particular way. At the end of the day, that is what matters, not the hypothetical economic arguments. Price is everything, and this alone is why technical analysis matters.

Source:http://chicbull.com/the-importance-of-technical-analysis-in-forex-trading/

EUR/USD awaits catalyst within weekly range

EUR/USD ranged overnight, opening at a high of 1.3671 and gently edging lower to its morning low at 1.3648 more recently.

EUR/USD remains within weekly range

Following last weeks surprise end, with an unexpected Non Farm Payrolls number, EUR/USD looks to have settled and awaits its next catalyst. Today´s European calendar is light on significance with French and Italian CPI numbers. However, eyes will be on embattled French President Hollande who is due to present a speech on his economic outlook for the beleaguered nation today. With Friday´s US jobs data looking like one off anomalies, the market is cautiously USD positive. This afternoon, US Retail Sales represent the headline event of the day at 13:30 GMT.

What are today´s key EUR/USD levels?

Hourly RSI sits at 48 and ranging, with ADX at 12. The daily pivot point sits at 1.3666, just above spot at present. Support can be seen at 1.3646 (S1), 1.3637 (Jan 13 Low & 1H 200 SMA), 1.3624 (1H 100 SMA), 1.3616 (S2), & 1.3596 (S3). Resistance above can be seen at 1.3664 (1D 20EMA), 1.3680 (32,8% FibRet from 1.3894-3548), 1.3686 (Jan 10 H), 1.3696 (R1), 1.3700 (Psychological), 1.3716 (R2). Further, a Hammer Candlestick formation can be seen on the daily chart.

Source:http://chicbull.com/eurusd-awaits-catalyst-within-weekly-range/

The Fundamentals of Commodity Trading

Commodities trading, much like Forex, and other markets, tends to seem like a complicated and highly technical field to the inexperienced trader. It is true that the depths of commodities trading are endless, and there is always more to learn. However, what most people do not realize is that they know more about commodities trading then they think.

Almost all resources one encounters in their day to day life falls under the category of commodities. Walk down an average aisle in your local supermarket, and you are likely to see a great percentage of the world’s “soft” commodities. To name a few examples of commodities we are all familiar with, rice, cocoa, wheat, and coffee are just some that come to mind.

The other type of commodities that surround us daily are “hard” commodities, which include the metal used to build our cars, as well as the staples that construct every piece of electronic hardware we use. Look around you, almost anything you see is or includes one of the world’s basic commodities.

Not only are most average people aware of the existence of these commodities, they are also quite knowledgeable about the market in which they are traded. Take gasoline for example. Who has never carried out a conversation about the price of gasoline and how you used to be able to fill up a car for so much less? Who has not speculated about the cause of this fact, and what the future brings? These are all topics most people think about it at one point or another, and these are the exact topics that drive the commodities market. This is what people mean when they say commodities trading.

So now that we established that we are all familiar with the basic commodities, how do these substances and resources become a part of our daily lives? How do they transform from a natural resource to a pricey and sought after commodity?

The basic principle that drives the commodities market is commodities futures trading. You have probably heard the words futures or future trading mentioned before, but what does it mean? It refers to the transaction in which two sides agree on a set price of a certain commodity, based on expected trends and developments.

A future is “a financial contract to buy or sell a specified amount of a product or financial instrument at an agreed price on or before a given date in the future”.
To give a more concrete example, a farmer might sell his crop months before harvest, which would provide the benefit of receiving a set price, irrelevant of future climate conditions, which might otherwise have lowered the price.

So where does that risk disappear to? What happens if there is a hurricane and the crop is destroyed? Well, that risk is assumed by the buyer, but not out of the kindness of his heart. In exchange for assuming that risk, the crop is sold for a lower price then what is assumed the actual value will be on the future date. The closer we get to the date, the lower the risk, and the higher the price of the commodity, which thereby provides a return for the buyer.

Generally speaking, what drives the commodities market or commodities trading is global economic growth. The more the economy advances, the higher the demand for commodities. The trends of the global economies are predicting that more people are moving into cities and benefiting from advanced technologies. This increases the need for infrastructure, water, housing, offices, factories, and transportation, which all lead to the increased need for commodities and more active commodities trading.

Source:http://chicbull.com/the-fundamentals-of-commodity-trading/

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