Money Management The most important most neglected aspect of automated trading

It is funny how people in forums and people who program expert advisors in general seem to address the problem of finding a profitable system and making it profitable. It seems that most of the time, most of their time and testing is spent on evaluating the entry and exit strategies of the trading strategy. People seem to think that the actual money in the forex market is gained by getting perfect entries and exits all the time, or most of the time.

I have seen people in forums go around for months trying to modify their strategies to make them profitable, they will add filters, add indicators, change the rules, optimize the variables, the indicator periods, add volatility filter, to sum it up, they will do everything they can to further perfect their entry and exit strategies. To further worsen things, most of their efforts are concentrated in the entry to the market, which is the most trivial and unimportant part of forex trading systems (see more on this on my ebook).

I have found out that the most important part of a trading system is not the entry or the exit of the strategy, but the money management. What ? Many people will just be awed by this fact as this is hardly even spoke of and people always neglect its importance when they program an automated trading system. When people buy an EA, they dont really care about how the EA actually manages their money, which is, as I have already said, the most important aspect of the system.

Usually people will use a money management system that just trades a fixed percentage of equity or a fixed lot size. They couldnt do any worse. Trading like this only relies on your account balance, not on the market and any money management system that makes sense, gauges the market to know how much money should be invested. For example, would you invest as much on the stock market now as you did last year ? The answer is NO. Why is this the answer ? Because how much you trade depends on how the market is behaving, is it a "good time" or a "bad time" ? Your money management must depend on both your account balance and market behavior, this is the way professional traders manage their trades. They dont trade X percentage or a fixed lot size, those money management strategies are just naive and precarious.

As I have shown previously, I have been able to take several systems that showed no profit at all and simply by removing all the additional filters that had been added and adding a money management system that made sense I was able to make them profitable. This is something you should NEVER neglect and something in which your attention should be focused. A money management that makes sense will make a system that makes sense and that trades according to how the market actually moves.

If you would like to learn more about automated trading systems, how I evaluate them, test them and how you to can build and program your own long term profitable automated trading strategy please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Forex Brokers: Assisting You with Your Trading Needs

If you traded in the Forex market before or if you're still trading now, you may have heard the term Forex broker a lot of times. However, as an individual trader, you may want to know what is a Forex broker and what they do.

Forex brokers are individuals or companies that assist individual traders and companies when they are trading in the Forex market. These individuals can really give you that extra edge you need in order to be successful in the Forex market. Although they will be trading your funded account, all the decisions are still yours to make if you want to.

Forex brokers are there to assist you with your trading needs in exchange for a small commission from what you earn. Here are some of the services that a Forex broker can give you:

� A Forex broker can give you advice regarding on real time quotes.
� A Forex broker can also give you advice on what to buy or sell by basing it on news feeds.
� A Forex broker can trade your funded account basing solely on his or her decision if you want them to.
� A Forex broker can also provide you with software data to help you with your trading decisions.

Searching for a good Forex broker can prove to be a very tedious task. Since there are a lot of advertising in the internet about Forex brokers, Forex traders get confused on which Forex broker they should hire. With all the Forex brokers out there that offers great Forex trading income and quotations, you will find it hard to choose a good and reputable Forex broker.

With a little research, you can find the right Forex broker who can be trusted. If you lack referrals for Forex brokers, you can try and do a little research of your own. The first thing you need to find out about a particular Forex broker with the amount of clients they serve. The more clients they serve the more chances that these brokers are trusted. You should also know the amount of trades these brokers are conducting.

Knowing the broker's experience in the Forex market is also a great way to determine if he or she is the right broker to hire. Experienced Forex brokers will increase your chances of earning money from the Forex market.

If you have questions or complaints, you should call or email the company and ask questions regarding their trading system. You should never be uncomfortable doing this. Besides, they will be the one who will manage your money. And, it is your right to know about what they are doing with your money.

When choosing a Forex broker, you should also consider their trading options. You should also know that Forex brokers are different from what they can offer you. They differ in platforms, spreads, or leverage. You have to know which of the trading options is very important to you in order to be comfortable when you trade in the Forex market.

Most online Forex brokers offer potential clients with a demo account. This will allow you to try out their trading platform without actually risking money. You should look for a demo platform that works just like the real thing and you should also determine if you are comfortable with the trading platform.

Look for the features you want in a trading platform in order for you to know what to expect if you trade with them. If you are comfortable with a trading platform, you should consider trading with them, and if you are not, scratch them off your list. This is a great way to test their trading platform and not risk your money.

If a Forex broker is not willing to share financial information about their company, you shouldn't trade with them because they are reluctant to share company information. They should answer your questions regarding on how they manage their client's money and how they trade that money.

Always remember that if you see an offer that's too good to be true by Forex traders, it probably is too good to be true. The Forex market is a very risky place to trade and Forex brokers must tell you that there are certain risks involved when trading in the Forex market. Avoid hiring a Forex broker who says that trading in Forex is easy and a very good money making market with very low risks.

These are the things you should consider when you look for a Forex broker. If you find that right broker, you can be sure that you can really earn money.

Why Trading With Expert Advisors Requires More Education Than Trading Manually

Reflecting upon all the different aspects of both manual and automated trading systems I realized that educational factors are some of the most important topics of both forms of trading. In fact, most traders lose money in the market when weak psychological factors couple with a lack of education and knowledge about both the systems and the inherent nature of financial markets.

First of all, there is a tendency to think that the forex market can be traded with an automated system without any knowledge of the market or trading. This is totally wrong, and specially for automated trading systems because not only do you need to know how to trade and how the market works but you also need to know how automated systems behave. Now I know you may be asking yourselves "why do I need to know all that information if the system trades by itself ?", well, it is obviously not that simple.

While most people believe that trading an automated trading system requires no knowledge of the market whatsoever I am going to say the complete opposite, it requires even more knowledge than to trade manually. Why ? Because of several psychological and rational factors. First, you need to choose an automated trading system. What is your criteria ? If you have absolutely no knowledge of the forex market your criterias will be wrong. Let me say that again, they will be wrong.

Why do you think commercial sellers tarket their systems the way they do ? They show high risk to reward ratios with high winning percentages, to the inexperienced person with no knowledge about forex trading it looks like a great deal. Why do 30,000 people purchased FAP turbo although it has, in my opinion, the characteristics of an unprofitable system ? that is because most people that bought it have a very shallow understanding of the market and automated trading systems, coupled with a deep desire to earn high profits in a short time.

Now, lets suppose you manage to get a grip on one of the few profitable systems out there. If you have no knowledge about the forex market or how automated trading systems work but you have seen the testimonials that most commercial ea sellers bring up then most probably you will think that your system just does not produce enough capital. Well, for me more than 40% a year is outstandng, most new traders looking for automated trading systems are expecting that every month ! Unrealistic. Sadly this feeding of greed is carried on with enthusiasm by most ea sellers out there shoving unprofitable systems down peoples wallets.

Then you have other factors, maybe your profitable system will only win 1 out of every 10 trades and that will be enough to make it very profitable but you are ignorant of this because you lack an understanding of how the system trades so you psychologically feel like a loser after 5 consecutive loses and decide to stop trading the system.

As you can see, almost all of the problems associated with people buying and losing money with unprofitable trading systems is based on people being ignorant and this is a direct consequence of people wating money without effort. Well, as someone said once, if you think education is expensive, you dont know the cost of ignorance. If you would like to learn more about choosing expert advisors as well as commercial and free expert advisors I have reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Easy Profit in Automated Trading Logical Proof of its Nonexistence

Isnt hassle free profit from the forex market all we want ? Definitely the goal of every person that starts to look for an expert advisor - or most at least - is to find a trading system they can simply "set and forget", a trading system that just collects money from the market in a consistent manner with minimal or limited draw down. A "holy grail", so to speak. However, it becomes obvious after a while of being in this business that if it is too good to be true it probably is and that no trading system can provide the owner with profit without an effort to develop knowledge and understanding. However the fact that the other road seems plausible makes a lot of people continue to search for this nonexistent trading system, a quest that brings nothing but disappointment and financial loss for most new traders. On todays post I will be giving you a logic based demonstration that shows why easy profit in automated trading is impossible and why this search is meaningless and will never arrive at your intended result (a system that easily gets you money without any effort).

First of all we must understand the very basic aspects about logic based demonstrations. When we are faced with a given hypothesis there are several ways in which it can be demonstrated to be true. In mathematics this is done in several ways but one of them is of particular interest to my article. You can demonstrate that something is false if the assumption that it is true leads to absurd results. For example, let us test the hypothesis that the addition of two even numbers gives us an odd number (which is false).

Assuming this to be true :

n, m and k are integers (2n is the definition of an even number, 2k+1, the definition of an odd one)

2n+2m = 2k+1
2n+2m-2k = 1 subtract 2k from both sides
2(n+m-k) = 1 factor 2 out
2a = 1 since n, m and -k are integers their addition is another integer (a)

Since 2a is an even number by definition and it is said to be equal to 1, we have an absurd result. No integer times 2 is able to give us 1 as a result. The hypothesis has been proved false because the assumptions that it is true leads to absurd results.

When it comes to making money from a system without any effort we can do the exact same thing. Let us suppose that there is a system that generates a 200% yearly income which can be traded from 100 USD and used successfully by anyone who buys it. Looking into the sales of the most popular experts we could expect this system to be used by at least 30K people during the first 2 years. This means that 300K USD - assuming each person trades the minimum - will be traded within the first 2 years. After ten years the return of this system would have been 17714700000 which is around 17 billion which is above all other market participants for this same time period. If 300K USD were added each year (of course new sales), the results would be even more staggering nearing more than 100 billion USD.

After 20 years, results become even more absurd and the system is now making a return that would be equal to more than the volume available to be traded. That is, all other market participants would be losing money against this system. This reduces the result to absurd levels since the systems profits surpass the amount of money available from the market. In fact, all the money in the world roughly describes what this system would be making.

The conclusions of this thought experiment are therefore quite simple and straightforward. One of the following things must be true :

• If a successful system exists that anyone can trade then there is an inherent - and quite small - volume limitation to its trading that will thereafter make it lose its profitability or its "tradable by anyone" character.
• If a successful mechanical system exists then there must be strong psychological barriers that make it extremely hard to trade for most market participants
• If a successful mechanical system exists then there is bound to be a maximum compounded yearly profit to maximum draw down limitation that forbids it from reaching the above scenario (a limitation on profits).

Through all my research and work I have found that it is certainly possible to have successful mechanical trading systems and I suspect all the above are in fact true statements. Systems that would be easily available for anyone to use would quickly lose this character as a function of volume and become hard to trade for some reason (psychological, increases in the maximum draw down to average compounded yearly profit ratio) and systems that are already successful are bound to be hard to trade or have an inherent profitability limitation that does not allow them to reach the above mentioned scenario.

In the end, logic is simply undeniable. The scenario portrayed before is an absurd outcome that cannot be reached and therefore limitations to its achievement must be contained within the systems themselves. Systems that may seem to show extremely high results must be volume limited and later become much less profitable and harder to trade while mechanical systems that are profitable in the long term are hard to trade by definition. The above logical reasoning also shows us that there is bound to be some form of profitability to draw down limitation which comes from the simple assumption that the above scenario must be avoided. In conclusion, there is simply no easy long term profit in automated trading.

As you see, the simple power of the "reduction to absurdity" logical reasoning allows us to gain a lot of information about the world of automated trading systems merely by the use of a very simple thought experiment. If you have any comments, suggestions, opinions or other similar reasoning exercises, please feel free to leave a comment !

If you would like to learn more about my journey in automated trading and gain a true education around this type of systems, their uses, limitations and possibilities please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach to trading systems. I hope you enjoyed this article ! :o)

Manual Trading With S R Some Pointers for Manual Traders

Thinking a little bit about manual trading strategies and evaluating the way in which I trade support and resistance levels (S&R) it became apparent to me that there were certain modifications I could give to my system that could make it a little bit less discretionary and a lot easier to trade for people new to the trading of support and resistance levels. After a backtesting evaluation of my trading system on the metatrader 4 visual backtester (the strategy is not automated, I just run the backtester on a blank EA so that I could get a "live trading" simulation), I took several notes regarding the way in which the strategy is best traded and I came out with several pointers that will help people who are interested in the profitable manual trading of this strategy.

One of the first things I realized is that taking strictly positions based on a 1:3 risk to rewards ratio often kept me away from positions that could have been profitable and could have increased my profits significantly, for this reason I believe that the entering of positions can be done from a 1:2 risk to rewards ratio although if possible I will still pick a 1:3 risk to reward ratio.

It is also obvious that bounces may occur from support or resistance levels on lower time frames that may cause a bounce towards the SL of our positions and therefore make us end up with a losing trade. I decided that I will move trades from now to breakeven once they reach the first significant support or resistance level in favor of the trade. This will avoid the taking of loses when the market simply bounces of one of this levels towards the SL before reaching our TP which is likely set at a much higher/lower resistance/support level target.

The last thing I wanted to tell you, which is probably the most important aspect I have discovered about S&R trading which is perfectly in line with sound trading principles is that you should NOT trade breakouts of S&R levels. I have found that bounces are the best to trade and the best trades are bounces from S or R levels that end up with a position in favor of the trend. This way you enter the trend at the end of a retracement and therefore with a much more favorable profit potential. I realized that entering on breakouts is usually a bad idea since price seems to bounce from these levels, sometimes a lot, before continuing the trend. So for example, if the EUR/USD has a resistance level at 1.5150, you will not enter on a breakout of 1.5150 but you will enter on a test of a support level that results from a bounce from that support level.
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As the images above show you, you should enter trades on the blue circles, NOT on the red circles. Entering bounces that end up in the direction of the main trend is always the most favorable case. You should definitely avoid entering breakouts as this type of trades generally does NOT offer the best risk to reward ratio and often takes out your SL as price bounces off the support or resistance level. Hopefully this guidelines will help anyone wishing to trade this S&R system, of particular importance is to trade this on Renko charts which offer a crystal clear view of support and resistance levels.

If you are not interested on manual trading systems but in the trading of long term profitable automated trading systems. Especially how you can trade freely available profitable systems or build your own long term profitable systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Trading from Small Amount Brokers with Low Contract Sizes

Many people want to start forex trading but they do not want to risk large amounts of money. Most brokers offer accounts from very small or no minimum deposits but what people dont realize is that they are risking a very large percentage of their money per trade due to the fact that the broker has a high minimum tradable amount per pip. People dont realize that most broker call their accounts mini or micro in virtue of their minimum tradable lot size (0.1, 0.01, etc) but not in virtue of their contract size per standard lot which is what finally determines the amount of money made or lost per trade. The best accounts a person can use to trade with small amounts of money and accurately handle their lot sizing to risk reasonable percentages of equity are accounts which offer a 10,000 USD (instead of the regular 100K) contract size per standard lot. In todays post I will talk a little bit about the brokers which offer these accounts (which are hard to find !) and their different disadvantages/advantages.

So what is the advantage of a 10,000 USD contract size per standard lot ? On regular accounts offered by most brokers, the contract size per standard lot is 100,000 USD, meaning that even if you can trade down to 0.01 lots you will be trading at least 1000 units of base currency which are equivalente to roughly 10 cents per pip on the EUR/USD. What this means is that if you have a small deposit (100 USD for example) you will have to trade with an SL of less than 20 pips to maintain your risk low. This leaves almost no room for money management adjustements and drastically limits the amount of money you can trade and the positions you can take. For this reason a regular forex account needs to be opened with at least 1000 USD so that money management can be done appropiately and positions with large SL values (up to 200) can be traded.

What is the solution for the really small investor ? If you are just starting to trade or you want to test a large array of trading systems, etc, then the best solution is to use an account with a 10,000 USD contract size. This means that you can trade 100 units of base currency at 0.01 lots, meaning that you can trade 100 USD and have a stop loss value of up to 200 pips without risking more than 2%. This is great in the sense that it allows you to mimic the money management conditions of a 1000 USD accounts with 1/10th of the starting capital.

But who offers these elusive accounts ? It has taken me many hours of internet searching to come up with companies which offer accounts that allow you to trade from 1 cent per pip but I have compiled a list of these companies to make everyones life a little bit easier :o). The brokers which allow these accounts are : IBFX, FXclearing, LiteFX, NordFX, MasterForex, InstaForex and FXopen.

They all have advantages and disadvantages, for example, IBFX is the only of these that is NFA registered and therefore it offers you all the pros and cons of this feature. InterbankFX allows credit card and bank wire deposits but it lacks any form of e-currency payments, something which I dont like since it is fairly inconvenient. Definitely my favorite is FXClearing in the sense that it offers paypal deposits/withdrawals something which is extremely convenient when dealing with these small amounts of money. The other companies listed above also offer additional payments through other e-currencies like egold, liberty reserve, etc. However the fact that I like the most about them is that all of them (LiteFX, NordFX, MasterForex, Instaforex) offer the ability to deposit funds using alertpay, something which is convenient since you can easily transfer money from your bank account to your alertpay account (exactly like when using paypal). By the way, all the above companies offer metatrader 4 as a trading platform something which is important to most people since this is the leading platform used for automated trading.

By using any of the above companies you can open accounts with small investments and yet be able to trade your systems in an accurate fashion, these allows for a reduced-risk evaluation of your automated or manual trading systems, a very important thing that must be done if one then wishes to invest (or manage) large sums of money in forex trading. If you know any other broker which offers metatrader 4 and trading from 1 cent per pip, please leave a comment :o) (also make sure you leave any comments about the above brokers if you have experience with them)

If you would like to learn more about my automated trading systems and how you too can be successful in forex automated trading with realistic risk and profit targets please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

Important Facts about the Forex Trading System

Forex is considered as a financial system on the foreign exchange. It allows the trader to purchase foreign stocks or currencies. The forex trading system is popularly increasing in the internet in leaps and bounds each day. It provides useful information about the companies wherever it is located. The traders stay informed so that they can make a wise decision when purchasing and investing their money. Several forex trading systems are allowing the traders to make withdrawals, online inquiries and purchases so that they can create additional wealth by using their invested money.

Forex trading systems involves money investments from a company which is located overseas. Learning more information regarding the company is helpful because you can obtain the latest available programs and processes. You can also double or triple your invested money within a short period of time. You can avail of the forex trading system that only requires a small amount of investment, as low as 5 dollars, while other forex trading system can require a large sum of money to be invested, as high as 500 dollars. Remember, one forex trading system is different from another forex trading system. Each has its own terms regarding the duration period of your investments.

If you are wondering how long your money will remain invested, then you must carefully read the company's fine prints where you are investing your money. Some company may require a 48-hour investment while others may require a 30-day turn around time. Always read the information being provided. It will explain your current money status upon investing it and its future outcome.

Forex trading systems allows the trader to purchase companies, stocks, or other country's investments. It does not matter where you live since forex trading systems are also located in any parts of the world, as well as the company where you are investing your money. The traders can invest their money in companies located in China, Japan, United States, Russia, Germany, Africa, and other countries which are recipients of the investments on forex trading systems. It does not necessarily mean that you have to be living in the country where you are planning to invest. This is the secret of the forex trading system. Your personal wealth and personal preferences can be enhanced while investing.

This is also the major reason why forex trading systems are well known. It can really make extra money by investing the cash since forex trading is about putting the money on another currency either for a short or long term period in order to earn bigger sum of money. Most forex trading systems are typically based on how stock exchange works. You will find out that forex trading systems can permit currency rate investments, currency change from one country to another, and investment from a foreign company. Hence, forex trading systems are built upon global investors, global companies, and global currencies.

Remember, there is no difference between online and offline forex trading systems with regards to the projected results. However, online forex trading systems can quickly access your money. The traders can move, invest, remove, and trade their money faster compared to offline forex trading systems.

Somehow, it could bring wealth to the investors who are willing to invest and trust the brokers when making additional decisions. But the question is who you are going to trust. It is advisable and helpful in any kind of trading systems or company investments to trust the person whom you are transacting with. It is a wrong company if you cannot reach the representatives on forex trading systems either by fax, email, phone, or even in person. A company which utilizes forex trading systems and offers opportunities to the traders to worldwide investments is good. However, they should communicate with the traders any time during business days.

Moreover, it is advisable to look for a company that uses forex trading system that puts your invested money first and foremost, how you are going to invest it, and listen to the things you wanted to do. If a forex trading company is just calling you at all times and giving you little space for decision making, then avoid doing business with them. Remember, this company should realized that being the end user and consumer of their forex trading systems, they should listen to you and learn about your plans regarding with investing your money before making the investment.

Forex Trading System: Knowing How to Trade in Forex

Do you want a very good career that has a potential to make you earn a lot of money? Do you want to enter a particular financial market but don't know which one to choose?

If you answered yes to either of these questions, then the Forex market is right for you. If you want to make a lot of money, the Forex market can provide for you.

You have to realize that the Forex market is the largest and the most liquid financial institution in the world. With trades that go on for 24 hours a day, you will have an opportunity to make money any time of day you wish to. It is also a fact that the Forex market generates currency exchanges that amounts up to trillions of dollars each day.

With these kinds of feature, who wouldn't want to trade in this very large financial market?

Forex trading is not as complicated as it may sound. With the right knowledge and skills, you can instantly trade Forex for a minimum of 500 dollars in a mini-Forex account. The Forex trading system is very simple.

Basically, Forex is the exchange of currencies of the world. You should realize that all the currency of the world is involved in the Forex market. It may be confusing to choose which one to trade but all you need is to know the major currencies that are frequently traded. Here are the major currencies that you can choose from to trade:

� US Dollar (USD)
� Japanese Yen (JPY)
� British Pound (GBP)
� Swiss Franc (CHF)
� European Union Euro (EUR)
� Australian Dollar (AUD)
� New Zealand Dollar (NZD)
� Canadian Dollar (CAD)

These are the major currencies that you should consider trading. With these trades, you can be sure that you can maximize your money making potential.

The basic thing that you need to know when trading in the Forex market is that you should buy low and sell high. And, since you will be trading with different countries currency, the economy and the government stability of a particular country can literally affect the value of the particular currency.

The next thing you need to know is that Forex trades are done by trading currency pairs. Currency pairs are the simultaneous buying one currency and selling the currency of another. So, basically, Forex is in fact trading.

Aside from knowing how to trade currencies of the world or at least the major currencies, you also have to know about the different strategies used when trading in the Forex market. You have to realize the fact that knowing how to trade in the Forex market isn't enough to get you that money. You also need to know the different strategies that are used in the Forex market.

An example of a Forex trading strategy that is used in this market is the leverage strategy. This will enable you to trade 100 times the amount of money you deposited in your Forex account. This means that you can earn a potential of 100 times more. With this kind of strategy, you can really maximize your income opportunity.

You should also consider the stop loss order strategy. This strategy minimizes the risk of losing money. The stop loss order works when you choose to stop trading at a specific price. If the currency reaches that point, you will automatically stop trading.

There are other strategies that you can use in the Forex market that you should be aware of. If you want to be successful in the Forex market, you also have to realize and accept the fact that you will lose money in the first few months when you trade in Forex. This is why it is also important to remember that you should invest what you can afford to lose in the Forex market. If you can't afford to lose the money you plan on investing in the Forex market, then it is recommended that you should never trade in this very large and very risky market.

Now that you know how to trade in the Forex market, all you need to do now is decide whether you really want to trade in this trillion dollar industry. If you do decide that you want to trade, then all you have to do is open an account with Forex brokerage companies and start using their Forex trading software to trade.

Trading like a Couple Correlation in Trading

Through the last few months I have noticed that several of my customers are interested in the use of correlation in their forex exchange trading. Correlation, which is the statistical pairing of two random variables can be used in trading as it can tell us which instruments move together, which ones move opposite to each other and what percentage of the time we can expect the correlation to be true. However, there is usually an overestimation of the power of correlation in foreign exchange trading which can many times lead to invalid conclusions and the formulation of unsound trading strategies. Through this post I will talk about correlation, specifically about how it can and how it cannot be used in automated trading. I will try to discuss the usual ways in which correlation is tried to be exploited and why such uses of correlation usually generate strategies with extremely high draw down potentials.

If you do a small google search for correlation in the forex market you will find a huge wealth of websites that describe currency pairs and their relationships with each other. Of particular informative character is this website which accurately describes the meaning of correlation and how it is usually exploited in trading. Usually correlation can be used as a mean to diversify risk and to avoid the entering of contradictory positions. As per their example, if you enter a long trade on both the EUR/USD and the USD/CHF you are likely to go out with a loss as both currencies move in opposite directions. However, if you enter a trade on the GBP/USD and the EUR/USD you will diversify risk as both currencies move in the same direction, although not in exactly the same way.

So what are the ways in which correlation is exploited in automated trading ? Many people try to use correlation as a "standard" market conditions which must be returned to upon breakup from the relationship. For example, if the USD/CHF had a -90% correlation with the EUR/USD in average for the past 5 years and on a 4 month period this correlation changed to -40% people would take opposite positions on each currency until they regain their -90% "standard" relationship. This trading approach has many problems which lead to an uncapped market exposure. For example, what would happen if the extent of "decorrelation" reached levels far beyond 40% ? What precisely makes a currency unable to "decorrelate" from another ? Clearly the case can be made that while two currency pairs can remain correlated for a long time, they can quickly lose correlation because of fundamental changes.

A perfect example would be the EUR/USD and the GBP/USD which for the past few years have had a correlation above 80%. Nonetheless, after the market crisis in 2008, these pairs lost a lot of their correlation with the EUR/USD rallying towards 1.50 while the GBP/USD stayed in a very wide range from a yearly high it was unable to break. So would it be wise to always assume pairs will return to correlation ? No. Can we say up to which extent pairs will lose correlation ? No. As a matter of fact, all the systems I have seen which use returns from deviations in correlation as a trading strategy have ultimately failed. If you remember your sound training in trading you will remember the old phrase : The market can remain irrational more than you can remain solvent.

Is correlation useful ? Sure, it can be used to diversify risk and to understand and avoid the use of contradictory positions and systems. Does it have a "higher than usual" chance of success as an automated trading system ? No. Is it guaranteed that a system based on correlations will be profitable ? No. As a matter of fact, systems that are traded based on correlations often neglect the use of a stop loss or other order closing mechanism which usually makes them very dangerous and uncapped in their market exposure.

If you would like to learn more about automated trading systems and how to evaluate them and trade them profitably please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Creating Profitable Forex Trading Systems in Five Easy Steps

One rule of thumb that every aspiring entrepreneur should remember is that to make huge profits, you should know how to do it by yourself�and not rely on other's efforts. Being independent from other people will help you determine what things are best for your business.

Such rule applies on all types of investments, including foreign currency trading, or mostly known as Forex trading. It cannot be denied that Forex is the largest existing market around the world, which is estimated to have an excess of 2 trillion U.S. dollars worth of foreign currencies are traded each day. It is larger than the magnitude of the New York Stock Exchange, which is approximately 50 billion U.S. dollars. Thus, Forex market exceeds all combined equity markets around the world.

With such huge wealth circulating around the Forex market, one of your financial goals is to grab a major slice of that $2 trillion average daily turnover in the market. How you will be able to get a substantial portion of that average turnover if you do not know how you will handle your Forex business? Although you cannot live in the market alone (you need business partners and/or financial advisers to help you along), only you can determine what the best Forex business there is for you.

To get huge profits out of your Forex trading career, you need to build your own profitable system�a trading system that will bring your not just hundreds but thousands of dollars worth of Forex revenues. Such trading system is available on the market, but as previously mentioned, you need to be independent�and you need to have your own Forex trading system that will help you achieve your financial goals.

For new traders, it is difficult for them to device their own trading system since they do not have too much knowledge about the Forex market. However, even a neophyte trader can device a trading system that will fit on his personal preference and needs�in just five easy steps!

Before we discuss the five easy steps towards a profitable Forex trading system, you need to learn first the three main characteristics of a successful Forex trading system. These are as follows:

1. A successful Forex trading system is simple. There is no need for a complicated trading system with too many rules. It is a proven truth that simple systems work better than complicated ones, and they have higher chances of success despite of the �brutal� characteristic of Forex trading.

2. A successful Forex trading system cuts losses and runs profits. Keep in mind that you need a trading system that gets the huge possible profits and eliminates losses quickly, if not instantly.

3. A successful Forex trading system follows long-term trends. You will never cover your losses if you are just generating small profits. Keep in mind that the Forex market is worth $2 trillion U.S. dollars, thus there is no point in trading in exchange for just small profits if you have the opportunity to make trades for larger revenues. Focus on long-term trends and you will be able to see better results.

Now, here are the five easy steps in building a profitable Forex trading system:

1. As previously mentioned, your trading system must be as simple as possible. Integrate few yet essential rules and an extensive investment management system.

2. Always look for long-term trends (preferably on a weekly basis), then shift to daily charts and to time entry. This will help you analyze market trends efficiently.

3. The ideal way of trading foreign currencies is through breakout method.

4. Always watch for any break that you will note on your chart, which is commonly confirmed by stochastic crossed with bearish divergence. This will be your great timing tool whether you will enter a certain deal or not.

5. You must integrate effective time management within your system. Time is gold and is one of your precious resources. Design a trading system that is time efficient�where you can maximize the potential of your time resources to generate huge profits.

Get away with complicated systems; it will just ruin your entire Forex trading career. Build a simpler one and see for yourself how profitable it is.

Trading and Family Telling your Loved Ones About your Trading Goals

It is not a secret that most of us are not alone in our lives and that whatever decisions we make to change our work, investments or live style will affect other people around us. One of the most important aspects of trading - which often goes unnoticed in most websites and books - is dealing with your family when getting into the forex market. This is not as easy as it may sound and it is often approach in the wrong way by people who want to start a path to earn a living or a retirement income from forex trading. On todays post I will try to tell you what I believe is the best way to approach your loved ones, how you should make them picture forex trading and what parameters you need to agree upon so that you can treat for forex trading as a serious business endeavor.

First of all you have to understand that your loved ones are not into forex trading, probably dont know what it is and - in most cases - your family will not be very knowledgeable about investments, financial instruments, day trading, etc. The first big mistake people make is to approach their loved ones with a "dream" instead of a business. If you tell your partner and close family that you will be trading for a living most will give you a look that is better described as "keep dreaming". It is not that your family dont want you to prosper, it is merely that you are approaching them with something that they know is not so easy to achieve and that few people ever get to. Even if your family has never been involved with trading it is common sense to see that if it was so easy everyone would be doing it and well, this is simply not the case.

In order to approach your family and even more in order to approach your spouse -which may have a financial say in the matter - you need to tell them that you will start to learn how to trade and that your goal is to achieve a consistent long term profit. Perhaps the first question your family will ask you is how much you plan to make and your answer to this will be a simple : I dont know if I will be able to make any money but I will not lose more than X. The best thing you can do when you begin is to focus ENTIRELY on financial loses when you talk to your family. Tell them that MOST people lose money in this market and that your first goal will be survival.

Of course, some of your family members will probably raise an eye brow and wonder why the hell you want to try this anyway and you will tell them that you want to start a business and that the first goal is simply to make money in the long term and have controlled loses. That whatever you do you will never lose more than a set initial capital (1000 USD is a good place to start) and that if you lose that you will quit. Making you trade with such restricted capital will make you think a lot about your trading decisions and use small cent accounts in the beginning, however there is no rush, you are starting up a business.
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Another very important thing you need to do is to talk about the time that will go into this since it is an additional thing that can be extremely time consuming so you will set a given time every week that will be "forex business time" a time when you will not be disturbed and when you will concentrate on trading, system development, etc. It is a time to learn about forex and trade the market. There are systems that can be traded only once a week or automated trading systems that can be maintained and analyzed in a few hours, there is no need to become a "full day trader" you just need to come up with a trading schedule that works for you. Remember that right now there is no pressure to make 10000% or whatever, in this phase the only important thing is that after a few years you will be profitable (any amount) or at least you will still have trading capital.

After a few years you will now have something to show and something to talk about from where you can build true expectations not a "fluffy dream" that your spouse will internally laugh at when you talk about. You can then sit down and say : look, I have made X% the past few years and I have never lost more than Y%, I now know how to control risk and be profitable in the long term, I want to increase the investment to A amount of money and my stop-trading level will be B. Your family is now going to look at you like you are really onto something, that you know what can be done because YOU have done it and that you can actually control your risk and be a serious investor.

Truth be told, the only way you will convince your family about forex trading being worth doing and pursuing is through your OWN personal results on an account they have seen you trading for a given period of time. If you tell them "that guy made a fortune" or "I can become a millionaire" they simply wont care since they dont know this can be done and they havent seen it done. When you come to them after a few years with a 15% average yearly return and a 7% maximum draw down they will think - this guy/gal knows what he/she is doing, he/she controls risks and he/she can now paint a long term picture that is more realistic.

So to sum it up, my advice is simple: In the beginning just tell your family youre after something that may or may not work out but - in the worst case - you will only lose X amount of money and then after a few years show them your results and what you achieved and build long term goals from there. It never ends well when you tell your family that you will make a fortune from forex trading only to have them say "I told you so" after you wipe your first account. As I have said a few times, approach it like a business and not like a get rich quick scheme.

If you would like to learn more about automated trading and how you too can design and trade your own likely long term profitable systems with sound risk and profit targets please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

The Turtle Trading System EA Trading the Turtle System II

After searching a lot for an expert advisor that had the exact same rules of the turtle trading system, I found out that all of the free experts out there that try to trade the turtle system differ from the rules in one or another way. Since this system has the reputation of being profitable and very mechanical, I decided to give it a shot and program my own version of the Turtle trading system following the turtle rules to the letter.

Well, I programmed an expert advisor to follow the rules of what the turtles called the trading system number 2. My ea does exactly what the turtles say it is supposed to do. It enters trades on 50 day breakouts, places stops at 2N and then enters an additional of maximum 3 positions in 1/2 N intervals with the N equations defining lot sizes so that the amount of capital risked is also adjusted to volatility (as the system says). The system exits trades based on a 20 day breach as it is also described by the system.

Now, I would have expected this trading system to lose most of its trades and then show tremendous recoveries on a few trades each year. That is exactly what I observed in backtesting with the small difference in that the big wins experienced during the trending periods were not enough as to compensate for the huge loses suffered from all the false breakouts experienced by the system. My ea newsletter subscribers will have access to this ea from today, so make sure you join my newsletter if you would like to test this ea yourself.

Right now I am trying to find additional criteria that can be added to the ea in order to prevent the ea from losing most of its profits on false breakout trades. My best guess is that breakouts need to be further filtered out by the use of an additional indicator which reduces the number of false signals experienced by the system. Make sure you leave a comment if you have any ideas !

I found out that the lack of profitability I was observing was due to some programming glitches, make sure you read my latest post to see the first 10 year profitable backtests of this system !

If you would like to learn more about this ea and other free and commercial expert advisors please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Yes You ARE Looking for the Holy Grail A Message for People New to Trading

It is very interesting to analyze the answers you get when you ask people what they are looking for and if they think that what they are looking for is the automated trading "holy grail". This mythical piece of code is an EA that does NOT exist which achieves "unbelievable" results. However despite the fact that most people will utterly deny that what they look for is the holy grail - they will always say they know the holy grail doesnt exist - when you analyze the answer to the question "what are you looking for in a trading system?" you will realize that the bast majority are indeed looking for this mythical piece of code. On todays post I will talk about the holy grail and new traders and especially the relative character of the definition of this term and why so many people are looking for it even if they categorically reject to be doing so.

What average yearly profit to max DD ratio do you consider realistically achievable ?

So what is this trading "holy grail" exactly ? Its definition is actually simple and yet very complex. In my mind a holy grail is a hypothetical system which achieves results superior to the highest achievable maximum draw down to average yearly profit ratio allowed by the market in real returns over the past ten years. This means that any system that can do better than how the best REAL trader has done within the past 10 years is the holy grail. The best way to measure this "better" character is by using the above mentioned ratio which compares profit to risk.

When we look at the performance of forex traders for the past ten years -and the best registered traders since then- we notice that any system that achieves an average yearly profit to maximum draw down ratio of 5:1 over a ten year period is in fact a holy grail (check my post on the Barclay index to learn more about REAL long term performance of forex traders). This means that - being realistic - a system that achieves a 100% yearly profit with only a 20% maximum draw down over ten years is a holy grail. A system that is extremely unlikely to exist due to the very nature of the markets and the long term limitations on performance it imposes.

When we then ask new traders what they are looking for the answers are actually quite interesting. As a matter of fact, the above mentioned realistically inferred holy grail becomes the "lower standard" of a given set of return figures that are inferred from short term results and "lore" rather than from actual long term real performance records and realistic expectations. The 100% yearly profit with 20% maximum draw down becomes something that new traders perceive can be "easily achieved" and things like a 20% monthly profit with a 5% maximum draw down start to become the "grail" targets.

As traders start to accumulate more experience and they get to know the market and the inherent limitations of profitability and draw down they start to lower these figures. A trader with one year of experience is bound to give a 5% monthly profit with a 5% maximum draw down as a realistic expectation while it usually takes traders 5-7 years to realize that the before mentioned grail of a 5:1 ratio of average compounded yearly profit to maximum draw down ratio taken from real performance data is actually the real "extremely hard to achieve" target.

So chances are that if you are a relatively new trader you are looking for a system which is quite unrealistic and your actual "holy grail" is way beyond the limits of what the market is willing to let you get. In the end, most traders are looking for holy grails, even if they believe they currently have "realistic" and sound expectations of draw down and profitability for their trading systems. If you would like to earn a true education in automated trading and learn how you too can design and build your own systems with realistic profit and draw down targets please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach to trading systems. I hope you enjoyed this article ! :o)

Weird Arbitrage Opportunities in Currency Trading The USD COP Case

Have you ever dreamed about making money with absolutely no risk of loss in the currency trading market ? Did you think that such opportunities did not exist ? Contrary to most peoples belief in the fact that there are absolutely no arbitrage opportunities in currency trading I have personally observed the contrary for perhaps the past ten years in a very weird occurrence that seems to be absolutely particular to the USD/COP currency pair. The COP - or Colombian peso - is the main currency unit of the Colombian government and some extremely weird arbitrage opportunities are presented within Colombia to make substantial profit from USD or EUR exchanges. On todays post I will share with you this very strange case and why it leads to a rare inefficiency which doesnt seem to be present anywhere else.

The USD/COP is what many would call a "strange" currency pair. The pairs spread is usually around 0.1-0.2% of the pairs value and daily fluctuations can go from 2 to 10% of the exchange rate. This sometimes crazy volatility makes trading this pair hard (for anything but long term trading) but it also makes local Colombian currency exchange houses maintain some exchange rates away from the real interbank FX rate when very large fluctuations occur to avoid having strong monetary loses.

What happens here is that a great arbitrage opportunity is created that is actually quite strange. For example in early 2009 the USD/COP went from 1800 to nearly 2600 in a matter of a few months and the local exchange houses kept their exchange rate near 2000-2100 due to the fact that raising the rate to 2600 would cause them loses due to their previous peso reserves against the USD. Since most currency houses lack proper diversification and protection measures they need to eliminate their own loses by keeping exchange rates artificially low (although the time period this lasts is limited).

The opportunity arises since you can go to a currency house, exchange COP for USD at an exchange rate of 2100 then you need to physically take your money to the US (yes, you need to travel) then deposit it into a US bank and withdraw it through a wire transfer to Colombia at the FX rate of 2600. If you think this would have been impossible due to some reason, the fact is that I know several friends and traders who actually did the trip and managed to get 20% profits in a matter of days. I even had a friend who did the trip three times and made a 60% return over his initial "investment". Of course, the arbitrage opportunity is limited by the fact that you can only take 10K USD in cash out of the country legally per trip but it does give you the chance to get some risk-free profit from currency exchanges.

The reasons why this bold inefficiency exists are many but probably both the above exposed lack of proper protection from strong currency moves and the general injection of money from the drug industry into currency exchange houses could make this arbitrage opportunity both a consequence of money laundering and inefficient handling. The fact that a very small percentage of the population has US or EU visas and bank accounts in the US and EU needed to finish the transaction could also explain why this is not exploited to the point where the market is made efficient.

Of course the fact that exploiting such an inefficiency could also be supporting the drug industry has made me refrain from ever taking part in this game but certainly there is an arbitrage opportunity that I know many have taken advantage of to get massive profits when these small windows of opportunity arise every 2-5 years. Definitely a weird occurrence that is worth noting and discussing. If you have any opinions please feel free to leave a comment below :o)

If you would like to learn more about my journey in automated trading and how you too can build your own automated trading systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

Forex News Trading Free Expert Advisor

One of the most interesting things about the forex market is that changes in fundamental data change the global "outlook perception" of a currency for traders and hence mark dramatic changes in price during very small time windows. Trading these spikes caused by fundamentals being changed is called "news trading" because the trader chooses to enter and exit the market at the time when important economic news are released and the market experiences bast levels of volatility.

Trading the news often demands cat like reflexes and the ability to enter orders at the speed of light (or near it !) in order to keep a profit, stop a loss, etc. News trading is also dangerous in the sense that prices can gap for even 100 or 200 pips, making your loss far greater than what you thought it would be. Long story short, news trading is difficult if not because of the volatility and big chances of getting whipsaws, because of the inherent difficulties of trading and making clear decisions in such bad market times.

News trading expert advisors basically work by placing two market buy and sell stop orders at some pip distance from the price, one minute or more before the news release. What the ea wants to predict is a quick change in price which is caught quickly with the aid of the opening orders. This of course, does not work all the time because prices can "bounce" and leave you with no actual clear direction during a news release. Specially when news are confusion, you almost always find candles with gigantic shadows but not too much overall movement. Luckily, most of the time the news do move the markets in one specific direction and often for 100 pips or more. For example, the NFP (non farm payrolls) release moves the EUR/USD by more than 100 pips in average.

So how do we trade this news releases ? (You should first start trying this ea on a demo account, until you are comfortable with the way it works) You can use the ea provided here in order to trade the news in forex. The ea (developed by branac at forexfactory.com) enables you to place 2 orders 1 minute before the set time for the news release arrives (check your time zone and your broker time in order to adjust this time setting correctly). Now set the SL and TP values to the values you want to use as both Stop Loss and Take Profit (use a small stop loss and large take profit for better results, for example SL=30, TP=80) and variable (2) as the amount of pips away from the current price you want to place the orders. Use a wide enough value (30-50) in order to ensure that whipsaws are minimized as much as possible !

I hope this news trading ea proves profitable to all the forex traders out there looking for a solution to trade news releases in mt4. If you want to learn more about more commercial and free expert advisors I have reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Forex Trading Is this really for you

Today I wanted to write a post aimed at those people out there who are looking to try, starting to try, or have been disappointed by forex trading. Today my objective will be to describe what in my opinion are all the draw backs of forex trading, manual or automated that are always overlooked or ignored by people who start trading the fx market.

Sure, I remember too when I started trading this market. Everything you read is positive and sincerely you get the feeling that with a little work and dedication all those things they promise you might become true for you. For example, most of the time you hear that forex trading will "free" you from your 9 to 5 job, that it will bring you an amazing amount of profit working from home and that you can, as other people have, achieve a "stress free" luxurious live style. This of course, as it appealed to me, may appeal to the thousands of people out there getting into foreign exchange trading every day.

Whats the catch then ? Why dont we see thousands of millionaires or independent people living from forex trading each year ? Truth be told, forex trading is not for everyone and most people discover this the hard way. Not because everyone is not capable, or because people are not intelligent enough, no, not because of these things. Trading is not for everyone because everyone does not have the psychological or financial capabilities to deal with the facts of forex trading. I will now try to outline the things that happen in forex trading that people NEVER told you that may make you look for other different opportunities best suited for your personality and psychology. What are these things then that are bad about forex...

• Forex is NOT a 9 to 5 job. That is, trading does not offer a fixed amount of predictable profits every month. There are losing months, winning months, breakeven months. If you try to pressure into getting profits when it is not time for profits you will only get more loses. Why is this so stressful to most people ? Well, most people are used to getting a paycheck every month. What happens if you dont get one for 5 months ? would you be able to survive ? This is something that people who trade know and something they do to plan things out.
  
• Trading requires much more education than what you think. People often think this is not the case if they use automated trading system. I outline in my ebook the reasons why it is EVEN MORE the case when you use an expert advisor to trade your account. I spent nearly three years trading before I could get 3 consecutive profitable months. It certainly takes a lot (at least it took me alot) to learn how to trade the forex market, manually or automatically.
  
• You need a good starting capital. Of course, I have said in other posts that you need to have at least double your desired yearly income invested in order to be able to live from forex trading. This is absolutely true. If you try to live from forex using a very small amount of capital, chances are that you will lose all your money. Being underfunded is one of the MAIN causes why people lose their money in trading.
  

If you want to have a check at your door every month and you want your income to be predictable to some degree you can choose another form of independent life that is more suited to what you want. For example you can start a small online business, a brick and mortar business, a consultant business, all these things have a lot of profit potential and require just as much work as forex trading, however they have the advantage of being more reliable and less stressful (well, this depends on what each person finds stressful) than forex trading.

To be extremely sincere, forex trading is not what most people put it out to be. This is not a get rich quick opportunity, or something you can do with just "a little work". This is like starting a business that relies 100% on your dedication and which may sometimes give you no profit, and sometimes give you a lot. Is it for everyone ? No. But sure, they are independent opportunities for everyone who wants to live without having a 9 to 5 job.

For those of you along for the ride, forex trading is a challenge and it has to be treated as such. There will be frustration, there will be bad times but in the end if you have the dedication (which is a LOT of dedication), you will see things get better and you will get something which is priceless, the ability to make money in trading. If you would like to know more about my concepts about automated trading and how you can evaluate and build your own long term profitable trading systems, please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Trading the Turtle System in Forex using an ea in mt4 Part Two The Ea

In the first part of this post I gave a little introduction into the turtles trading system and some insights into its money management technique. From now on, I will start to talk about its entry and exit strategies as well as its pyramiding characteristics.

If you read the pdf (there is a link to it in the last post) that details the whole turtle trading system, you will notice that the system follows breakout strategies with a pyramiding approach in order to exploit the trend. This strategy ensures that the system gets a very high profit when a large trend is caught and also tries to minimize the risk associated with ranging markets. This is specially profitable in long time frames.

You should have also noticed that the Turtle technique has two different systems, No.1 and No.2. We are going to trade the system using the No.2 trading system with an 2N stoploss and an exit strategy based on the 20 day breakout signal. This of course, with the corresponding pyramidying tecnique with a maximum value of 3 units trading at any given time.
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The expert advisor we will be using can be found here (an image of the trading expert is shown above). It accurately represents the way in which the system works, following the exact entry and exit rules described in the manual for the No.2 trading system, make sure you set the LockingProfit option to false as this is an implementation not true to the original turtle system (remember to demo test to see if you feel confortable with this system before using real money). However, the lot size needs to be adjusted weekly following the instructions given during the first part of this article. I have also started testing this system in a demo account using the EUR/USD daily chart. People who have joined the mailing list will also receive statements and weekly comments on this system.

If you would like to learn more about other free and commercial expert advisors I have reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Learning and Discovering the Forex Trading Basics for Better Understanding

Trading has been in existence for many years. It's been there ever since man has learned to make a way of living. Before, people traded goods for other goods; or goods for services and vice versa. All of these things are necessary for survival. But now, trading is not mainly about goods or services, it is much more than that.

Forex trading is not new in the market; in fact, it has been there for many, many years now. A lot of people find forex trading as a worthwhile and lucrative venture.

Forex trading basically involves the buying and/or selling of different foreign currencies in the global market, often referred to as the FX market. Having a portfolio filled largely with bonds, mutual funds, and stocks is simply not enough. Why not include different foreign currencies in your portfolio, this way you can have money in all its different aspects.

The financial market operates twenty four hours a day. The usual trading day starts in Sydney, Australia, and other markets around the globe follows. New York is the last market that opens.

You can find a lot of different currencies in the world. Almost every country has its own currency, but with regards to forex trading, the trading of currencies is only done with what is popularly called the majors. These currencies are highly regarded as majors because they are economically stable compared to other foreign currencies.

The major currencies that are traded in the FX market are Euro, British Pound, Canadian Dollar, American Dollar, Australian Dollar, Japanese Yen, and Swiss Franc.

People who don't know anything about forex trading may find the business a bit strange, because typically, currencies are used to buy goods and services, and not currencies. May be its time for you to familiarize yourself with forex trading and engage in one yourself. Besides, it is a shame if you don't know what this particular business means.

Don't be left out, now you can even do forex trading in your home. You don't need to go to the actual FX market, as long as you have an internet connection. Choose from among the many software programs available in the market. You can instantly get alerts about the market condition, the prices, and other important information. This software can even tell you when to buy and/or sell and get an instant profit.

There are a lot of things to consider when you start trading. It would be best if you can do a little research and learn what the business is all about; you must understand the whole process to avoid major losses. Forex trading may be a great way to make money, but when done in the wrong way, it can get very expensive.

Forex currency trading is risky compared to stocks and bonds. But it is also a lucrative business because you can actually gain a lot within a split of a second or a few minutes.

If you're an ordinary individual, you can also take part in forex trading. Don't think that only large organizations or banks take part in this huge financial market. People from all walks of life can be involved in forex trading as long as they know how to properly do it.

The next thing to do is to find the right system that works best for you. Again, do a bit of research; and you can take advantage of trial versions which are free of charge. Look for customer testimonials; and after carefully considering all the factors involved, you can choose one system that you can make use in your trade.

Another thing is to get a good broker who can effectively help you in your currency trading and together you can devise a strategy. And who knows, you might be the next person to earn a lot of money in the FX market.

If you think you can make it big in the forex market, make sure that you use all the available resources around you to be able to learn about the business. After you have gained knowledge about forex trading, and were able to devise an effective strategy, you are free to start currency trading as soon as possible.

The Realm of Automated Forex Trading System

Just how important is an automated system to the Forex trading system?

Before we answer that question, let us first determine how large Forex trading market is. From there, we will know the importance of automated systems for the Forex market.

It is true that the Forex market is the largest market around the world not just in terms of average daily turnover and average revenue per trader. It is also the largest market in terms of participants.

You name it, we've got it. Take a look at the following:

BANKS- they are not just for saving money and lending capital to entrepreneurs, but they are one of the major players in Forex market. Banks cater both to large quantity of speculative trading and daily commercial turnover. Well-established banks can trade billions of dollars worth of foreign currencies everyday. Some of the trades are undertaken on behalf of their clients, but most are through proprietary desks.

COMMERCIAL COMPANIES- these commercial companies trade small quantities of foreign currencies compared to larger banks and their trades produce small and short-term impact on the market rates. However, the trade flows from transactions made by commercial companies are essential factors with regards to the long-term direction of the exchange rate of a certain currency.

CENTRAL BANKS- central banks play an important function in the Forex market. They have the control over the supply of different currency, inflation, and interest rate. In addition, they have also official target rates for the currencies that they are handling. They are responsible for stabilizing the Forex market through the use of foreign exchange reserves. Their intervention in the market is enough to stabilize a certain currency.

INVESTMENT MANAGEMENT FIRMS- these firms commonly manage huge accounts on behalf of their clients such as endowments and pension funds. They are using the Forex market to facilitate transactions, specifically in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

RETAIL FX BROKERS- they handle a fraction of the total volume of Forex market. A single retail Forex broker estimates retail volume of between 25 to 50 billion dollars each day, which is estimated to be at 2% of the total market volume.

SPECULATORS- these are individuals who purchase and sell foreign currencies and profit through fluctuations on its price as opposed to popular methods such as interest and dividends. They perform the important role of transferring the risk to individuals who do not wish to bear it.

In Forex market alone, there are already six major players partaking on the $1.8 trillion worth of daily turnover. With a large number of Forex players, there is really a need in switching from manual to automated Forex trading system.

Among the aforementioned major Forex players, the automated trading system is of great advantage to the speculators. Since they focus on the price fluctuations of various foreign currencies in order to profit, the real time data analysis will help them determine trades that will give advantage to them.

There are several automated Forex trading systems available in the market. There are also automated Forex systems that are offered for free or as part of their trading account acquired from their Forex brokers or agents. Such complimentary system packages are typically elementary trading system. Thus, if you are looking for more features, you can avail of it through additional payments.

There are two types of automated Forex trading system. These are discussed in the following:

Desktop-based system- all Forex-related data are stored on your desktop's hard drive. This system is unpopular to Forex traders because all data are susceptible to computer virus contamination and other security problems. Worse, when the computer malfunctions, all essential information might be lost and cannot be retrieved (unless you have some back-up files of your own). However, it is little expensive compared to the other types of automated trading system.

Web-based system- the security of your Forex account and other data are provided by your web-based provider. These are hosted on secured servers. It is also convenient in the sense that there will be no software required and it is universally compatible with your Internet browser.

You may also try different automated trading system demos first so that you will be able to determine the automated Forex trading system that suits your personal preference and needs.

Even if you are just a small-time Forex player, it will be to your advantage if you will use an automated Forex trading system for your future trades.

The Importance of Forex Trading Courses

Being engaged in any business of some sort is truly rewarding. Man has been involved in this kind of endeavor for many years now, in fact, it has been in existence for as long as any man can remember.

Trading is a very good way to do business. Long ago, people traded goods for other goods. Later on, some goods were traded for services, and vice versa. Forex trading is just one of the many forms of trading. For starters, forex trading is simply the trading of the different currencies in the world. It provides absolute liquidity to most investors; it is also known as the least regulated and the largest financial market in the world.

Although trading may seem very easy, when it comes to forex, it's quite different. And if you don't have proper knowledge about it, you will lose a whole lot of money. Doing the trade like the pros can be quite a chore, but if you only know the basics and some advance learning tools, you can do your trade just like them.

There are many forex trading courses that you can choose from. You can attend a forex trading class traditionally (inside the classroom) or you can do it online. Whichever you choose, you will surely learn more and will benefit from it once you do the actual trade. Although it requires additional expenses on your part, the amount that you'll be spending will be doubled or even tripled once you do your actual forex trade.

Trading courses offered to wannabe forex traders teaches all forex trading aspects. You can find institutions which offer the latest software and tools used in forex trading. Aside from that, you will be taught the difference between equities and forex trading. Pros make use of different instruments when doing the actual trade, and through these courses, they will be able to help you choose the best possible instrument that you can use.

You can actually engage in forex trading twenty four hours a day and six days a week. Imagine how much money you can make in so little time; but this can only be realized if you attend forex trading courses.

New traders may enjoy forex trading even without attending the proper course, but in due time, you will realize that you can lose a lot of money if you don't seek professional help. Sometimes, a little help from the outside can be very useful.

Forex trading requires a lot of knowledge about the market itself, and if you hardly have any knowledge about it, you're in big trouble. People who want to engage in business naturally want to make money, and to achieve that in forex trading, you must have a good grip of the different aspects of the trade.

Discipline is one very important trait in doing forex trading. You must have your own plan, and with the help of technical tools used by currency traders, you can go a very long way.

It would be wise to find a course in physical offices so that you can get the most professional and comprehensive learning experience. Check if they also offer study materials to be used at home. The opportunity brought about by the different courses offered in the market is infinite, and any trader can highly benefit from it.

Forex trading courses allows you to have training with real quotes and data. You will be taught the proper skills in risk management, and how you will be able to preserve your capital. You will learn how to make your very own business plan, and your instructor's comments about your work will help you improve the next time you make another plan.

Instructors of these courses are among the best; they have all the experience and knowledge about the trade. Almost any physical office which offers forex trading courses allows their students to do networking, which means they can have alliances and collaborations outside the four walls of the classroom.

You can ask your friends and colleagues who are also into forex trading if they know any forex trading course that is of good teaching quality. Or you can also do some searches online in case you want to attend classes on the net.