Dec 2 2010
If you ask every trader about his or her trading method, we are more than sure that you will collect as many trading strategies and techniques as there are currency traders in the world. Every day there is a new idea of
Forex trading in Singapore. Recently we noticed a certain method of technical analysis, when a trader focuses only on one currency pair without looking into other currency pairs. We all know that there are two most common approaches to
Singapore FX trading: fundamental, based on economical events and technical, based on trading according to the graphs and indicators. But recently we noticed that some traders are using a new method that is mostly based on the psychological factor of Forex market.
According to the theory of Alexander Elder, a famous expert in technical analysis, the behavior of investors in Forex trading is very similar to the behavior of crowd, which can be described by certain laws of mass psychology. Mass effect simplifies thinking, abolishes personality and leads to the growth of forms of herding, crowd behaviors, which is more primitive than individual. One of the characteristics of primitivism is the increasing role of a leader. This theory is working in Forex the same way as in a real life. While Forex is a virtual market, it is still moved by real people – investors who determine its directions.
A Forex rates chart, according to Elder, plays a role of a leader, attracting the consciousness of crowd of the market. Such psychological clarification for the behavior of a market’s price determines the involvement of the theory of dynamic chaos. Some expectedness of the market is explained by the primitive crowd behavior of traders, who create a single dynamic system with a very small inner freedom. Forex market graph shows the mood and emotions of the crowd. As every participant is eager to gain money and is afraid to lose, the feelings of fear, boldness, uncertainty, etc, are united in a single place.
According to this theory, if you want to forecast the future direction of rates movement, you need to go away from the crowd and become smarter. In order to do that, you have to make your own system of trading that is based on the certain laws of market’s behavior and follow it. Don’t succumb to the pressure of feelings and market’s noise. In other words, forecasting of price movements must be based on a certain calculation. You have only to make such an algorithm. There are multiple software available that can help you make a trading strategy based on fundamental and technical analysis. Almost every
Singapore Forex broker is able to give its traders with all necessary tools and instruments for Forex market’s analysis.
Nov 14 2010
Thousands of strategies were built since the moment when Forex
trading in Singapore was open. And every time their creators were proud to declare that a ideal Forex strategy is found. But in the end none of these strategies could provide a stable income for a
Singapore trader. Most of the existing strategies either don’t work at all or strop working after a long use. It makes sense as the
Singapore Forex market is volatile. Even an effective strategy that brings you profit now will fail later. It will have to be upgraded according to the market’s changeable conditions. But the situation is not as bad as it seems. Out of thousands of Forex strategies there are ten effective ones that won’t fail even after tens and hundreds of years.
One of these strategies is the news trading strategy. In this article we will discuss this technique. It is one of the most popular Forex strategy. Its basis is to make transactions during or after the announcement of important financial news. Still the strategy is focused on the strong market trends otherwise it would not make sense. The most powerful news is the majority of economical events in USA. The special attention must be paid to the news on interest rate changes as it usually causes very big rates movements.
In order to succeed trading on the news, we recommend you to follow these principal rules:
1.Don’t risk much of your balance. You must always do a good money management and for news trading it is even more important. If usually you are trading with 1/10 of your investment, so on news trading you should decrease it to 1/15 or more.
2.Don’t open a trading position before the news announcement. The early placed position has a big risk for failure. Though you can easily find out the forecast of the news, you cannot know for sure if these prospects are going to be true. Thus starting a trading position before the news looks more like gambling than trading. So wait before the events will be announced and you will be able to know the direction of the market.
3.Open your positions in a correct way. You have to be carful when placing a trading position on the news announcement. Follow the following tips to avoid the mistakes:
Prepare yourself 15 minutes before the news announcement. Using the current rate level place two pending orders: one for buy and one for sale. Thus you will be ready for any scenario of the events. It is very important not to set the orders too close to the current rate. Because before the news announcement the rate may jump to different directions. Your orders must be set in more than 20 pips from the current quote. In order to secure your trading, we advise you to add the stop loss orders as well in each direction.
Oct 8 2010
Many new Forex traders have heard about currency trading system. Many courses about Forex market teach that Forex trading system is what a trader needs in order to succeed in currency trading. In this article we will reviel what is this mysterious system and how it can be applied and help you in trading.
Every Forex trader sooner or later comes to believe that in order to obtain a stable income from Forex trading he needs to develop a trading strategy. If a trader opens and closes trades basing on his intuition only, then sooner or later all thelosing trades will prevail and all the balance will be lost. The same result will be if a trader uses different approaches of trading and analysis all the time, without any clear system of trading and analyzing the market. The fact is that the unsystematical actions and decisions lead to the unpredictable results. And if we add also a human psychology aspect to this scenario, so the lack of the trading strategy and the present of pressure will only increase the risk of failure.
As any
Singapore Forex trader may guess, a Forex trading method is a set of analytical tools that help a trader in his work of analysis and making right decisions in Forex market. We all know that every person has his own opinion. The same may be said about the Forex trading systems. Unfortunately the perfect trading system doesn’t exists, that’s why every trader must apply his own trading experience in order to develop a trading strategy that would show the best results.
Making a trading strategy is a creative job, that’s why each
Forex Singapore trader relates to his trading method as his own baby. He believes in his creation and it helps him in trading. With every successful trade that faith in his own trading system increases and gives him more energy to continue
trading in Singapore. Usually traders can hardly explain you their own methods because they are the integral parts of the psychology portrait of their creators. That’s why the same Forex trading system that makes profit to one trader may have no positive result on the trading of another one.
As you can see creating a trading strategy must be an individual process based on the experience of a trader. Though there are many common features between the strategies, each trader includes his own knowledge to his strategy, that is often getting optimized during all his life while he is trading. When building a trading strategy, you can take as a basis one of the existing strategies and make the necessary upgrades by adding new features or excluding the existing ones. The goal is that your strategy must be simple and guarantee you at least 5% of profit.
Sep 26 2010
There is nothing gloomier than to see the novice
Singapore FX traders loose their initial investments in currency trading. In this article we would like to discuss some popular trading mistakes and help the new traders muster the skills of a Forex trader.
The first mistake is an attempt to begin trading Forex from day-trading. That means trading within a day on short-term charts, mistakenly thinking that this way traders can make much more profit. In reality it is certainly a myth. Day trading is recommended to the professional traders only who have many years of experience in Forex trading. The reason is that on day trading a trader must make correct decisions immediately, not basing on the market analysis so much, but rather on the basis of his intuition and big trading experience. If you don’t have much trading experience, it is almost impossible to succeed on day trading. The novice traders are recommended to start their Forex trading career from technical and fundamental analysis on 24 hours time frame charts. Though it takes more time, this trading technique is less risky and will help you obtain a valuable trading experience.
The next and the most common mistake is trading against a trend. Half of the beginner traders on
Forex Singapore market loose their money for this reason. There is a rule on Forex market: trend is your friend. Don’t think that you are cleverer than the others. When there is a trend, you must trade with a crowd in order to make profit.
The third fault is too much trust to various indicators, automatically trading systems, popular analysts and guru of the financial markets. Notice that the decision about trading must be only yours. It is your money that you invest and trade with and if you loose due to the recommendations of a guru, alerts or other assistants mentioned above, none of them will take responsibility for your failor. Also, making the trading decisions based on your own analysis, you are gaining a valuable experience that will be very helpful in the future.
And finally, the fourth mistrake in Forex trading is the lack of an structured trading plan and your own trading strategy. At any time, disregarding of the market’s situation you should know what to do at the moment. In order to make your trading successful and less risky we suggest (especially to the beginners) make a diary where the main steps of your Forex trading are noted.
It is very important when finding the moment of opening a trading position follow the ratio of at least 2:1 of profit to losses. But in general the more positive trades you have, the better. Following all the rules described above will help you earn trading
Forex in Singapore or any other financial market.
Sep 25 2010
Online trading has its own rules and if you don’t know them it is senseless to hope for success. Forex trading rules have a specific feature. You don’t have to know them in order to trade currencies, but if you wish to make money you will have to spend much time to learn them and create your trading strategy. The rules of currency trading are altering all the time and traders must be aware of it. They must be updated what is going in the financial world, have an access to all kinds of analytical sources, publications, news, etc. Almost every
Singapore online brokerage company gives its traders all helpful information about the market. Without the informational support and awareness of the world political situation trading online will be chaotic and unpredictable.
The main two principals that are the basics of currency trading and have a high impact on the success of your trading are technical and fundamental analysis. Technical analysis includes the study and analysis of the historical movements of the price charts. The main aim is to find the trends and other situation that will help you forcast the future changes in currency pairs’ prices. In other terms, thanks to the technical analysis online of the past and current quotes with a certain probability of success by forcasting the direction of the rate of the currency pair in the nearest future.
Fundamental analysis is the analysis of the news and events worldwide. The principal rule of the fundamental analysis is to be updated with all the events that affect the financial market. To some extent this rule can be compared to the theory of chaos meaning that a breath of a butterfly on one side of the earth side. Under the news that is used for the fundamental analysis we mean financial data and the release of the macro economical reports in different countries and more. The beginner Forex traders must know that even a samall event can influence the currency price, especially if these rumors are about big world politicians and financial analysts.
If it is your first time in Forex trading, you have to train before you begin real trading. Most of the
Singapore brokers offer a free demo account where every trader may trade with real quotes using demo money. This is a good time for developing your skills and building a trading strategy. There are many different trading strategies available. So you can practice a strategy of someone else or work on your own one. Whatever strategy you use, the goal is that it must bring you profit.
The other important rule in
Forex Singapore trading is the emotions control. You cannot trade successfully if you let your emotions affect your trading decisions. The fight of loosing your funds is the worst enemy of your trading. It is evident that nobody wants to fail, but any trading strategy has its own rules and you need to follow them disregarding of your fear and other emotions that you may have during your trading.
RSS FEED