Tuesday, August 28, 2007

How To Choose The Correct Forex Trading Software For You

Just like with stock trading, there are a large number of software programs you can use to make your foray into the foreign currency exchange markets. You will find that you have two basic choices, either web based or desktop based programs. Which way you choose to go is entirely up to you. If you travel a lot you may want to opt for the web-based variety instead of having to haul around a laptop and trying to find a good Internet connection for it.

Most of the more reputable Forex brokers offer software programs to their clients at no charge, however the software they provide is usually very rudimentary at best and you may have to pay more to get the features you really need. This is another issue to consider when choosing a broker to handle your exchange business. Many Forex websites have free demo accounts available which will allow you to experiment before you get locked in with one company or spend your money on something you don't like.

Since the Forex market is constantly changing and evolving you will also want a software program that changes with it. Another issue that is absolutely crucial to your success in the Forex markets is a super fast Internet connection. If you do not have DSL, at a minimum you will have a tough time. I recommend broadband. If you have dial up just forget about it. I will tell you again that you need the fastest Internet connection you can afford.

Another really important issue when considering a Forex software program is security. As a rule, web based software programs are much more secure than the ones that you install on your desktop. The problem with desktop software is that it opens you up to a wide range of possible security breaches that could possibly leave your personal financial information vulnerable. Not only do you have the issue of viruses and Trojans, but you are also opening yourself up to loss of data due to hard drive crashes. When you add the possibility of hackers getting into your system, that adds even more skepticism about using desktop based programs.

With web based software programs the majority of the security and maintenance issues will be taken care of by the software provider. Internet based Forex software systems are hosted on secure servers with the most secure encryption technology available. In addition to the security issue is the protection of having all of your information backed up so it won't be lost.

As I mentioned in the beginning of the article, another great benefit of web-based software is that it is available from anywhere in the world that you can get Internet access. This is the way I chose to go since I do a great deal of traveling and I liked the fact that the software is constantly updated so I don't have to always upload a new version to my computer.

Gregg Hall is an author living in Navarre Beach, Florida. Find more about this as well as FX currency trading at http://www.FXTradingStrategies.com

Forex Trading - 4 Common Myths Guaranteed To Make You Lose

I read a lot of good information online to do with forex trading but most of the information I read is rubbish, yet many forex traders believe it. The myths I am going to cover here are mostly spread by so called market gurus and system sellers, so lets look at them.

First of all before we look at the myths, lets answer a question: Why do vendors and gurus spread them, if they know they wont make money? The answer is they make money out of them - by selling systems and courses that dont work for the user, but earn the vendor lots of money. These people simply appeal to the greed and naivety of novice forex traders. Lets look at a few forex trading myths that are guaranteed to lose you money.

1. Day Trading Works

If it does, why do you never see a day trading track record that has made money? Because of course it doesnt work, yet vendors continually sell them backed by a hypothetical track record - thats a track record based upon KNOWING the market prices! Well we can all make money doing that.

They sell their systems and dont trade them because they havent got the confidence to trade their system because they know it wont make money, but they know some mug will believe it and buy the system. For the record - all short term volatility is random and prices can and do go anywhere in a day, so trading daily ranges is doomed to failure.

2. Markets move to a scientific law

Well if they did, there would be no market, as we would all know the price in advance! Duh? This is obvious to anyone, yet people still fall for the myth of scientific theories such as Elliot wave, or the Fibonacci number sequence. Elliot wave says markets move scientifically, yet gives no objective theory to make money! Well that gets rid of that theory, lets look at another favourite: The Fibonacci number sequence. This was actually based on the copulation of rabbits and had nothing to do with finance, but was hijacked by the investment community and the myth was born.

It actually predicts nothing in financial markets and the levels break, as often as they hold - If you dont believe this, try and see how quickly you lose your money. Apart from the fact these scientific theories cant work, you have to wonder if it was that easy to make money with them, why the vendor will sell it to you, for a few hundred dollars, when he could keep quite and earn millions.

3. Buy Low Sell High Will Make You Money

Try it and you will lose. No one can predict where a low point will bottom and when a high point will be reached. If you try and predict you are hoping that levels break or hold and the market will kill you. If you want to win dont try and predict, act on the confirmation of a level holding and that means looking at price momentum.

4. You can earn a regular income

No you cant. You have seen the ads earn $3,000 a month, 20 pips a day etc this myth doesnt need any explaining its obvious its not true and anyone who falls for it, deserves what they get an empty account. If you want to win at forex trading make sure you dont fall for any of the above myths everyone of them will ensure you lose your money.

The Good News is:

When you trade you take money off losing traders so if they believe the above forex myths it increases your chances of currency trading success!


On all aspects of becoming a profitable trader including features, downloads and some critical FREE Trader PDF's and more FREE Forex Education visit our website at http://www.net-planet.org/index.html

Technical Analysis - Using Support & Resistance Correctly

If you are trading with technical analysis one of the keys to making longer term profits is being able to use support and resistance to make profits.

Most novice traders however fail to trade with support and resistance correctly so here are some tips.

1. Support and resistance does not work in short time periods

Most novice traders try using support and resistance in daily periods Forget it, you will lose.


Because these levels are totally meaningless.

Trillions of dollars a day are traded by millions of participants and to say that support and resistance is valid in such short time frames as a day or a few hours is laughable.

The only people who take notice of these levels are the small losing minority of day traders.

Dont believe me?

Ask any day trader for a real time track record of profits using support and resistance and you wont get one.

Volatility is random in short time frames and therefore any technical indicator you try to use wont work.

Novices try day trading and lose and wonder why, they need to get educated study volatility and standard deviation.

2. Support and Resistance Test and Time Span

Generally you want several tests (the more the better) and gaps between the tests.

The more tests you have the better, this means that traders will generally pay attention to them and when they hold are or broken.

However, when looking for support on resistance dont just use the daily chart Look at the weekly chart which will give you the bigger picture.

3. A Great Trade set up

Is when you get critical support and resistance on the longer weekly chart lining up with similar levels on the daily chart These levels are very significant and you should look to trade them.

4. The Biggest mistake made by novice traders

The biggest mistake made by novice traders is they simply see support and resistance levels and trade into them and hope the market reacts in the way they want.

You will never make money this way -you must have price momentum in your favor.

Price momentum must support the way you are going to trade and we will look at this in more detail in part 2 of this article.


On all aspects of becoming a profitable trader including features, downloads and some critical FREE Trader PDF's and more FREE Forex Education visit our website at http://www.net-planet.org/index.html

FOREX Trading - 10 Mistakes Novice Traders Make

Enclosed are 10 mistakes novice traders make and they help over 90% of novice traders lose all their money. Make any of them in forex trading and odds are you will lose to.

Here are 10 mistakes you must avoid to win in online forex trading:

1. Day Trade

Simply the best way to lose in Forex trading.

The logic doesnt work.

This should be obvious to a child, let alone grown adults!

Yet, more novice traders than ever try this dumb way of trading.

We have written numerous articles on this, if you still want to day trade read them.

2. Consult a guru

There are some people who sell advice that is good, but 90% of it is not worth the money.

If you do buy advice make sure you understand the logic and can follow it with discipline.

There are very few gurus that can help you and the best way is to do it on your own.

Success comes from within.

3. Get a broker assisted account

If brokers were good at trading they wouldnt be brokers, they would be making money for themselves.

Sure, they can give you convincing stories, but stories dont make money.

Getting market direction right does and the odds of your broker doing this are slim.

4. I can trade a Demo account so now I can make money

So you can make money paper trading with no money and place orders?

Big deal.

Fact is, paper trading is easy there is no pressure, as there is no money on the line.

Trading is an emotional ride and when money comes into the equation paper traders crumble as easily as traders who have not used a demo account.

5. Trade to frequently

Many traders think if their not in the market they will miss a move.

They trade for the sake of it and dont have the odds on their side.

Only trade high odds trades, they cannot be hurried.

Be patient.

6. Mix fundamentals and technical inputs

A great way to lose.

You are either one or the other you cannot combine the two.

7. Chase your tail

Many traders constantly chop and change systems.

They have a perfectly good system they could have stayed with but get bored and swap and then they do the same with the next system.

Get a system and stick with it.

8. Over leverage

They over leverage on trades and get wiped out.

To win at online forex trading you need to play great defense, as well as great offense.

Protect what you have above all else.

All trades are equal, dont fall in love with a trade.

In fact, the ones that look best and are the most comfortable to trade, often turn out to be losers.

9. Avoiding risk and creating it

Traders are so obsessed with avoiding risk they create it, by having stops to close and trailing them to quickly.

By trying to restrict risk they create it, by guaranteeing they will be stopped out and never riding a big profitable trade.

Forex trading is all about taking risk calculated risks, when the odds are in your favor and making sure you dont get stopped out by normal market volatility.

Learn about volatility and standard deviation, if you want to know why this is so important.

10. Try and have to many inputs

Many traders look for the perfect system and the more complicated it is the more likely it is to succeed.

After all 10 indicators are better than 2.

Not so, in fact the more inputs you have the less likely the system is to succeed.

There are more elements of the system to break it.

In forex trading simple systems beat more complicated ones and most of the worlds top traders only use very few inputs.

Dont try and be clever and complicated, or you will lose.

Final words

Above you have 10 common errors forex traders make.

If you make any of them your chances of losing will be increased dramatically.


On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at http://www.net-planet.org/index.html

Forex Day Trading - An Overview

Day trading is defined as the buying and selling of a commodity within one day. The forex market is where people trade foreign currencies for profit.

Forex day traders are the elite of forex trading. They are usually the most educated in market movements and they are usually trading in significant amounts of money. They work at forex trading everyday, all day. Their benefit to the market is enormous, as they add that essential liquidity value. In other words, without day traders, it might be hard for the more casual, longer term holder, to find buyers at the moment they are needed.

But forex trading is not for the faint of heart anyway. First of all, you must have a thorough knowledge of the forex market and all its complexities. Remember, youre competing with professionals who spend nearly all their waking hours analyzing and executing trades. Your knowledge level must be equal to theirs. Dont be fooled by systems being sold that promise you enormous returns for a small investment in the book du jour. There is no get rich quick scheme hiding in those pages! You need to understand it all perfectly in order to succeed.

Secondly, you need a large amount of capital. Forex day traders are often institutional buyers. They can command large sums of money on a daily basis. With a small investment, you just dont stand that much of a chance of big returns. The old saying, it takes money to make money, is very true when it comes to any forex trading. Large market swings in any 24-hour period are highly unusual, so large profits only come from large investments. If you go into the forex day trading market with your sights set on a fortune, you need to know that youre much more likely to lose your shirt. As with all investments, you need to make sure that the amount you invest is what you can afford to lose. Money can accrue on a small-balance account, but the process is a slow one. You still need the knowledge and safety measures that a good forex broker can provide.

Thirdly, you need a plan. As you read the books and study the process, you will undoubtedly run into some systems that can be used successfully. In addition, youll come up with your own guidelines as you gain experience with trades, either real or in demo accounts. Some of the popular systems being used successfully and have proven histories are called swing trading, trading news and arbitrage.

The popularity of forex trading and especially day trading, has been rapid. This has raised some controversy. There are some who will steer you away from forex day trading at all costs. Others say that day trading is the only way to make a substantial income in the forex trading markets. Two things are certain: 1) Beginners/amateurs would be best off leaving the forex day trading market to the professionals and 2) Day traders provide the liquidity the forex needs to exist.

Be careful, become educated, or get professional advice before embarking on a forex day trading strategy.

Michael Russell
Your Independent guide to Forex Trading

The Greatest Lie Ever Told is Keeping You from Wealth

The greatest lie ever told from investment professionals could be keeping you from getting wealthy. This lie has been passed on from mediocre advisors as a way to justify their measly returns on your money. You most likely have accepted this advice without much thought.

Even worse you have probably given this same advice yourself to friends and family. This lie has destroyed so many futures that it should be outlawed immediately. This outdated advice is robbing you and many others of thousands if not millions of dollars.

What lie am I talking about? The lie I am talking about is when investment advisors tell you that you should buy and hold a particular investment for five years or more. This is crazy! Yet so many people take this advice as the gospel.

The average stock market return is 10% to11% per year. Why not sell your investment when it reaches say, 15% or 20% in year one, assuming it does? There is no need of holding your investment for the sake of holding it.

In fact this will reduce your returns because you could have sold your investment in year one and realized a 15% to 20% return and moved on to another investment. Holding on to winning investments until they become losers is what so many people do. This is a shame when you realize most advisors do not follow the same advice that they give to you.

These advisors know how fickle the markets can be therefore they exit their winners and do not hold them for five years or so. This further proves what I have been teaching for years, no one is going to look after your money like you would. Advisors who sell their investments much earlier than their clients are just doing what is natural, looking after their own interest.

To be fair there is one instance when buy and hold is the right advice to be given. There has to be a circumstance when this is true or Warren Buffet and the other great investors would not give this advice as well. The exception when buy and hold is the right advice as Buffet and others readily agree is when you will not take an active role in your own wealth building.

Sadly, this is the case for most investors. They would rather give their money to others and let them invest the money. This would not be too bad if you would actively monitor your wealth and learn investment strategies yourself so you can better determine what an acceptable financial return is.

A 10% return a year is no longer acceptable. Today you have to worry about how bills are going to be paid now and in the future. You need to earn returns that you can live off of as income while at the same time saving for retirement.

Earning profits of 10% a month have become a necessity. Average people are enjoying monthly returns of 10% or more each month. They have figured out the greatest lie ever told and are taking wealth building into their own hands.

At the time of this writing I used $3,376 to earn profits of $725 in a single day. This is over a 20%. While I was in the investment for less than a day it was not my intention to only be in the trade for a day. However, if the market is going to give me a profit of over 20% in one day, I will surly take it.

For information on strategies and techniques I use in my personal account to generate monthly profits of 10% or more click here: Wealth Code

Copyright David D. Wells. All rights reserved. You are welcome to forward the entire Article to anyone interested as long as it is not edited in anyway and includes the Resource Box.

David D. Wells is a superstar trader and bestselling author. Let him show you how fortunes are made in the 21st century. Subscribe to his free newsletter at http://www.themoneymotivator.com

Trading Forex - What's Next for the Yen?

For the last couple of years or so, the buzz word in Forex circles has been the carry trade. In fact, it has become popular enough, that even CNBC gave it a mention on number of occasions.

What is a carry trade? In a nutshell, its a trade involving two currencies with a large interest rates differential. The premise is, that a trader sells short, or borrows, currency with a low interest rates and buys, or goes long, a currency with higher interest rates. In the process, trader pockets the difference, which, in most cases, is paid daily.

For example, having a position in USD-JPY would earn a difference between USD rates, 5.25%, and JPY rates ,0.5%, for a profit of 4.75%. In reality it would be a little less ,since brokers charge small part of this gain for their services.

While all this doesnt sound very impressive, dont forget the power of leverage, commonly employed in Forex trading. This very same trade at 2:1 leverage would earn 9.5%, at 5:1 leverage, about 24%. Of course, the leverage could be much higher. Now we can see why the carry trade has been so popular, and very profitable, over last couple of years.

JPY, especially, has become a target for the carry trade. Combined with Bank of Japan (BOJ) official policy of weak Yen, it has been increasingly sold against just about every currency of any importance. High interest bearing currencies, like NZD, AUD and GBP have reached levels not seen in decades. EUR-JPY is at an all time high. Even USD, in a massive slump of its own, has experienced sizable appreciation against JPY over last 2 years. It has become one of the easiest ways to make good money trading. Simply go short JPY, collect healthy interest rate and, on top of that, pocket very good asset appreciation. What could be simpler?

Unfortunately, everything thats too good to be true must come to an end. What could be described as a first crack in the carry trade, came in February. BOJ officials expressed concern with Yen being used to fund speculative interests. Just about that time JPY experienced a serious run up putting a lot of speculators out of action. It didnt last very long but was a poignant example of how fast and to what extent things can swing while trading currencies.

Recently, BOJ once again issued a statement, this time being concerned with a continued capital outflow, meaning Yen being converted to other currencies in search of better returns. What can be even more worrisome, is an article in a conservative and respected Japanese newspaper, Nihon Keizai Shimbun, which states weak Yen policy is no longer desirable. If true, that would signal a major shift in Japanese Monetary Authority priorities. Increasingly we can see dark cloud over carry trade involving JPY.

What does all that mean? BOJ is well known for its statements, which are guarded innuendos and vague threats of intervention. They hope markets will respond to those comments without an actual need to step in. As long as they keep talking about it, the chances of an intervention are not that high. However, if the markets continue to defy their wishes and all of a sudden there is no more comments - watch out. What most people dont realize, BOJ can ask other central banks to step in on their behalf. We know for a fact US Treasury did it at least twice about 3 years ago. With Yen being as low as it is, most central banks would likely be accommodating, should, in fact, BOJ request assistance. Such action would make respective countrys products more competitive, correcting trade balance with Japan.

Im first to admit that the above scenario is highly speculative and unlikely to play itself out as scripted. Im not a prophet of doom and gloom. Its not in anybodys interest to see the kind moves in JPY that happened in 1998. The chances of Yen appreciation are, however, increasingly more real. Speculators, especially small traders, should take a closer look at the JPY carry trade, if it is in their portfolio. One can put firm stops on existing positions. Lowering leverage is also an alternative. There is another sensible option. Simply take money of the table and be happy the party lasted as long as it did.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at kulej@spectrumforex.com

Forex Trading Tool - Which Calendar?

A calendar of economic reports is an indispensable Forex trading tool!

Experienced traders begin preparation for each trading session by consulting an economic calendar so they can avoid trading at times when the market is likely to be volatile and unpredictable.

At the same time, if an intra-day trade is in progress with a potentially volatile economic report soon to be announced, a decision can be made as to whether to take the trade out, or at least move the stop to protect profits or minimize losses.

Seeing this is such an important Forex trading tool, it pays to look around and select the best from the free resources available online.

Listed below are three good calendars you may wish to add to your Forex trading tool collection. (For links to each of these calendars go to the resource box at the end of this article and click on the link for free resources.)


The FXCM web site has an associated web site called dailyfx.com which provides a comprehensive daily calendar of fundamental announcements which can either be viewed online or downloaded as a PDF file.

Economic reports likely to have a major impact on the market are displayed in bold to make them stand out.

This downloadable report is useful if you wish to print out the daily calendar and have it on your desk or displayed beside your computer.


This web site is very popular with thousands of visitors to the Forums each day. However, in my opinion, the best Forex trading tool it offers is the calendar.

You can customize the time to your own time zone so the calendar displays in local time when the fundamental announcements will be made. This is a great help in avoiding confusion from having to add or subtract from GMT or having to take into account daylight saving time.

The main benefit of this calendar is the color coding feature. Economic reports likely to have a major impact on the market are shown in red, medium impact reports in orange, and minor impact reports in yellow.

At a glance you can identify the times during the day when you need to exercise caution.


The paid subscription version of the Econoday calendar is an essential Forex trading tool for many professional Forex traders and fund managers.

For the average day trader the free version available from Barrons will no doubt suffice. One very helpful feature of this web site is the link to why the economic report matters. A detailed explanation is given on all the major economic reports as to why the market cares and the effect it can have.

Economic Reports - Market Movers

Not all economic reports are market movers. However, there are about 15 economic reports that have a medium to high impact on the US Dollar and up to 10 or 11 economic reports that have a medium to high impact on the British Pound, Euro, Swiss Franc, Australian Dollar and Canadian Dollar.

Navigating your way through a trading day without using a calendar would be like attempting to cross a minefield without a mine detector!

Be sure you take advantage of this major Forex trading tool - the economic report calendar. Use the online resources available for free and make them part of your daily Forex trading session preparation routine.

For a free pivot point calculator, Fibonacci calculator and the best free economic calendars click here:


For a free candle & chart pattern recognition reference tool click here:


The powerful 200 EMA strategy - easy for newer traders:


Forex Trading - Using Neural Networks for Huge Profits

Today, we are seeing the increasing use of neural networks in financial markets to help forecast prices with greater accuracy and the complexity and research is mind boggling. This article will look at the use of neural networks in financial trading and their profit potential.

The Human Brain V Computers

The human brain is one of the most complex objects if not the most complex object known to man. It is not just its superior processing speed and storage space that make it extraordinary, but more importantly, its ability to learn and adapt.

Neural Networks Defined

Computer scientists have tried to write software that allows computers to mimic the learning power of the brain (computers already have superior storage and processing speed) and neural networks aim to help a computer learn and adapt.

A neural network is essentially a system of programs and data structures that approximates the operation of the human brain. A neural network consists of a large number of processors operating in parallel, each with its own sphere of knowledge and access to its own databank.

A neural network is "trained" by being given large amounts of data and a set of rules.

A computer program can then tell the network how to react in response to an external event and initiate reactions based on the knowledge it has access to.

Therefore in forex trading, neural networks can learn how to trade based upon the data fed to them.

Do They Work?

The answer is at present the human brain is and always will be superior, due to the fact it can THINK independently. A computer can never achieve the learning power of the human brain as it can only work with the rules its programmed with.

A computer program can trade, but do you need a neural network.

There are computer programs today, that dont use neural networks, that have rules that make money and neural networks dont have any advantage at all.

People think that technology can solve everything, but the markets are one area where simple systems can and do work best.

An Investment Fact

The fact is that 50 years ago 95% of forex traders lost and today the same ratio applies.

This is despite all the advances we have had in market research, computers and speed of information delivery. Keeps this point in mind if you want to win at forex trading:

Trading is an odds game and the application of science to predict is doomed to failure.

There will never be a neural network with the power to learn and adapt like the human brain, as it has to be programmed by a human and there are endless variables.

Keep it Simple For Success

If someone tries to sell you a program or service based upon neural networking, ask for their real time track record and see if you get one chances are you wont.

People are always looking for science to help but in the markets forget neutral networks and play the odds.

Either with your brain or with a currency trading system, thats simple with just a few rules thats all you need, dont look for more.


On all aspects of becoming a profitable trader including features, downloads and some critical FREE Trader PDF's and more FREE Forex Education visit our website at http://www.net-planet.org/index.html