There have been some emails recently asking me to help them on their forex trading because they are not successful with it. What they mentioned was that they have huge drawdowns and have a couple of losing trades and that they think their forex strategy is not woking anymore. They try to build some small profits, accumulated it and then lost it to the market again. So what is exactly happening to them?

Well, the truth is not because their forex trading system is not working anymore, you can trade with a very simple system that consists of only one indicator and can be successful too. But when you do not follow the rules of your trading system, money management and be disciplined, everything can go haywire. I can assure you that.

Let’s first talk about not following the rules of the trading system. Many people are always tempted to trade the market without following the exact steps of the system. It’s either they did not fulfil all the checklist before opening a position or they are just too anxious to go into a trade. If forex trading can be that easy, why do I still keep emphasizing that you need to follow the rules? Because we do need some technical analysis before we know whether a trade has a high winning probability, that’s why you MUST go through the checklist and follow the rules step by step. If almost every requirement is met but only one is not, you still do not go into the position because that only one requirement that is not met may be the reason that the trade may fail.

So the second part I’m going to discuss is money management. Again, I do not know how many thousand times I have repeated saying that you can only risk 1% to 5% of your trading capital per trade. A few of my subscribers asked for help as they have lost thousands of dollars( with a few thousand of capital) within a few weeks or less than 3 months. How can there possibly be so much losses if they have been following good money management rules?? For example your account has $3000, if you risk $30 (1% of capital) and go for $60 profit per trade, even if you have a bad success rate of 2 winning trades to 2 losing trades, you will still make $6o profits! Ok, the worst scenario is you lost 10 trades, so $30 x 10 = $300 only, how can you lose thousand over dollars if you follow the money management rules?? I hope I don’t have to explain this further.

Lastly, always be disciplined in your forex trading. Not matter how tempting the market condition may be, how well the price may be trending, do not chase after the price if it has gone too far. You can chase after the price if you are prepared to increase your stop losses, but that’s not the disciplined way to trade. Do not try to be faster than the forex indicators unless you are really experienced in the market and know how the price action moves. We always wait for the indicators to confirm before we take a trade, but more experienced trade will judge on price action when entering a trade.

Even if you have not been trading forex for very long or you have just started, you will know that there are plenty of forex brokers out there in the market, right? When you trade, the prices you see and get from your own broker will vary from other brokers, and the spreads will be different too. Though there are many brokers in the forex market, but there are only 2 types of brokers. What are they? One of them is Electronic Communication Network (ECN) while the other type is Market Maker.

ECN has a big network where they take prices from several banks, institutions, market makers or other forex traders in the ECN. From there, they will be able to filter out the best bid/ask price and display in their forex trading platform. Usually for very liquid currency pairs like EUR/USD, USD/JPY etc, sometimes there are no spreads but then you will have to pay for fixed commission per transaction that you do. That’s how they earn money from forex trading.

Market makers, on the other hand, they ‘decide’ or set the price based on their systems where they think it’s the best for themselves and the other parties. So when you buy a currency pair, they must sell it to you and vice versa if you sell. Many of the market makers will try to cover your orders by passing them to somebody else who trades opposite of you or they will just take your order themselves and trade against you. That’s why sometimes you will see a spike in your trade and your trade was stopped out. Oops….:P Below I’m listing the pros and cons for the 2 types of brokers.

ECNs

Pros:

- You may get the best price since the prices come from different sources
- Scalping forex strategy may be viable as the prices are more volatile
- Slippage can be prevented during news release if the ECN supports Stop-Limit orders
- If they are a true ECN, they will not be trading against you but pass your order to other customers or other banks

Cons:

- Their trading platforms are not as user friendly and will take more time to learn and get used to it
- Many ECNs do not offer integrated news feeds
- Many do not offer integrated forex charting
- Stop loss and profit targets may be more difficult to calculate as the spreads are variable

Market Makers

Pros:

- Have a more user friendly and technical analysis platform
- Charting platforms and forex news feed are provided free most of the time

Cons:

- They will trade against you (big problem), they may just trigger your stop loss if it’s small
- There may be huge slippage during news release and orders may not be allowed during high volatility
- The price they offer you may be less attractive than ECN and orders may not be filled at the price you wanted

I know this question haunts a lot of forex traders and most traders are trying to find out the answer for this. So do you have any idea on which are the forex trading currency pairs are that most actively traded? If you do not, then you will have to continue to read this post and find out whether are you trading them with your forex trading system. Many of the traders only react based on what most people think are the most active currency pairs and not by some statistics. So I’m going to provide you with some data here so that you can be clear on the figures and this is taken from a forex volume survey (based on October 2008).

Do you know that the most active trading center is in Europe? And if you guess it correctly…yes…it is London! It has a transaction of close to $1.5 billion daily on average. It is even more than New York, which is twice the figures behind London. However, New York is still more than the total figures of Sydney and Singapore combined. By the way, if you think Singapore is a very small country, yes it is, but the transactions for currency trading is one of the largest, mostly from institutions and banks.

I’m sure you have heard on somewhere that in forex market, spot forex is the largest component. Well, that’s not totally true here. It is the swap market that is the largest part of the forex market actually. If you think carefully, you will agree that swap market is the largest because of the huge international trades and capital inflows and outflows. Back to spot trading, if it is the biggest part of forex trading, then it has to be in New York.

In London, EUR/USD is taking up around 40% of the trading with USD/JPY at around 15%. The rest of the pairs like EUR/JYP, USD/CHF make up the rest of the percentage. In New York, EUR/USD is trading for one third of the market while USD/JPY at around 20%. EUR/JPY, GBP/USD and USD/CAD make up the rest of other trading activities at 75%. In Sydney, of course AUD/USD is the largest traded pair while USD/JPY and EUR/USD come second.

To summarize, the most active traded currency pairs are EUR/USD and USD/JPY, followed by GBP/USD and EUR/JPY. So this means that there are also more liquidity on these pairs and you might want to include them in your forex strategy if you have not do so.

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We are back to look at how you can get some good forex trading advice on the internet without having to spend tons of money for it. If you have missed the first part of this forex trading guide, you can refer to it by clicking HERE. I hope you have already digested what was in the first part of the post because we are going to continue to look at the 2nd part below.

Like I have said earlier, while you can find some free forex education online, you will have to make sure that it is the right and useful education for you and not just junk. There is one piece of forex trading advice that I want to give you and you must make sure that you bear in mind ok? Now this is simple if you hear me saying this. Majority of traders failed is because they lack of trading discipline. How do you train up to have discipline? I know it takes time to build confidence in your forex trading system, but you really need to follow it as that will train you to have more discipline.

So when it comes to forex trading advice, there may have some websites like mine, but you may not find their support as good as mine I’m not trying to promote myself or something, but if you have read those testimonials that my members have sent to me, you will realise that I’m really serious to help those traders who are not so successful in trading yet. By communicating through emails, I can point out their mistakes and give them advice on how they can improve their trading skills, this is something precious that you will not want to miss right…and somemore you do not have to pay anything for my advices This trading blog is for everyone, so you can feel free to read my blog as often as I’ll be posting technical analysis and some good forex trading tips that you will find it useful.

Are You Happy And Satisfied With My Support So Far?

So guys, if you find my tips and advice helpful to you so far, please post some comments below this blog with something like ‘Yes, I found it useful to me and it earned me __ pips so far’, and also tell me what I can do to improve my service ok? Thanks friends

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Hi guys, I know everyone who wants to succeed in forex trading thinks that they will only be successful if they have something special, which many people will call it the ‘holy grail’. Well, I hate to repeat this for so many times when people asked whether I have a forex trading guide that can win 100% of the time. My answer here again will be no, I do not have it and I do not think anyone has it. If you want to be a successful trader, you don’t really have to go until such extends to search for the strategy or system. All you need is a mentor or coach who can give you free forex trading advice. On the internet, you can find plenty of them and of course this blog here is one of them

A common mistake made by many beginners is that they think they can buy success in forex trading by buying a trading system or strategy for $67, $97, $147 etc. Even if there is some forex trading advice sold on the internet, you have to judge whether it’s really worth the money and not some marketing gimmicks.  If at any time you will need to pay for those forex trading advice, how do you decide if it’s good? Some forex tips here..  Look for a real time track record and a money back guarantee. If you don’t get both, then don’t buy. This involves your hard earned cash, so you should do some research on the products that you are interested in.

You can find plenty of stuffs and education related to forex trading on the internet and they are free. Here are some of the topics that you may want to look up and study more on them.

1. Technical Analysis - You can find information on chart formations, candlesticks patterns, fibonacci numbers, support and resistance and many more that are used in many forex trading strategies. These mentioned technical stuffs are very important if you are a chartist or technical trader, and can be combined to become a powerful forex trading system.

2. Technical Forex Indicators - Most of the traders will trade using their favourite technical indicators and you should too have some in your trading system. However, do not flood your charts with lots of indicators because large quantity of them will only give you more restrictions to your trading. When you draw your charts with trendlines, chart formations etc, you will also need some timing indicators which include Stochastic, RSI, MAs, MACD etc. There are many more besides those that I mentioned, but in general, they are good enough for entering the forex market.

That’s all for today and we’ll look at how you can get some good forex trading advice on the second part of this post tomorrow. If you have not have not got my ebook with tons of forex training, forex education and a profitable forex strategy, get it now for fr.ee that is originally worth $67! Have a nice day!

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As forex trading is a highly lucrative business, frauds, manipulation and abusive trade practices can happen. To protect you hard earned savings, you need to know what are the top frauds and how to avoid them. Here are some tips on how to avoid the top 2 forex scams:

1. Stay Away From Promises That Sound Too Good to Be True: Those Get-rich-quick schemes, including those involving forex trading, tend to be frauds. There is no easy way of learning how to trade forex and earn consistent profits everytime. Always remember that there is no such thing as a “free lunch.”, you will really need to spend some time to learn forex basics. Some big investors invest with a large amount of funds, which are never to be seen again if deposited with those schemes.

2. Avoid Any Forex Company that Assures You Large Profits: Be extremely wary of those forex trading companies that guarantee profits. Nobody can offer sure guarantees where currency trading is concerned. In many cases, those claims are false. Learn to trade forex by yourself with a forex trading guide or ebook will be good enough, then slowly make your way up. The following are examples of statements that are most likely are fraudulent:

“Guaranteed to make a ROI of 40-50% within few days.”
“You will reach a million dollars fast in forex trading.”
“Make $5000 in forex trading every week!”
“You don’t have to learn how to trade forex, it’s all automated.”
“You will never lose again in forex trading.”

So beware of these scams. I’ll expose more forex scams later.

Have You Got Your Free Forex Ebook?

To learn how to trading forex successfully using a simple, time tested and proven forex trading system, CLICK HERE to download my free 56-page “Forex Trading To Riches” ebook now.

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