Day Trading the Forex Market Profitably - Part 2

Copyright © 2009 Avi Frister



To trade volatile and liquid markets



Since your job as a day trader is to capture intraday swings it is crucial that the market you are trading has enough movement to allow you to do this. It is also important that the market you are trading has enough liquidity so that order fills do not suffer from excessive slippage. You have to select a market that its volatility is permanent and not a temporary occurrence. Since you are basing your trading method on catching intraday price swings you have to know that you are trading in the right place. As a day trader volatility is your ally and you have to know that you can count on it every single day (or at least 90% of the days). Liquid markets will provide you with good order fills. As a day trader this is very important since you are aiming at smaller profit objectives and hence larger slippage will eat away more of your profits. When trading several times a day this adds up and can be the difference between success and failure.



As a forex day trader you have to apply all the above rules and principles plus other criteria that are unique to the forex market.



Time of day trading



The forex market is a 24 hour market. Never stops except on weekends. Within this 24 hour period different currencies behave in different manners. As a day trader it is very important to know the personality of the currency you are trading. For example, the GBP/USD is more volatile in early to mid European session then any other liquid pair. For a day trader trading in these hours it would be wise to take advantage of the price swings the GBP/USD pair offers instead of trading some other currency pair that constantly shows no movement. The USD/CAD pair is silent in the early to mid European session but starts to have more price movement toward the start of the US session.



Spread and liquidity



Forex brokers do not charge you a commission for every trade you make (at least most forex brokers). Instead, they make their profit on the bid/ask spread which is measured in pips. As a forex day trader you are aiming at capturing small price swings sometimes several time per day. Also, your profit objectives are obviously much smaller than the swing traders profit objectives. All this means one thing: every pip counts. You cannot afford to trade currency pairs with large spreads, if you do your profit will get eaten up to a point where you will not be trading with an adequate risk/reward ratio. Forex day trading must be done with liquid pairs. Most forex brokers will provide you with a very narrow spread for the most liquid currency pairs. As an example, many brokers are now offering a 2 pip spread for EUR/USD and USD/JPY and a 3 pip spread for USD/CHF and GBP/USD. These are the most liquid pairs and the ones a day trader should focus on.



Volatility



As a day trader volatility is you friend, a friend you cannot afford to trade without. In its basic definition, volatility is simply the amount of price change with relation to time. Volatile currency pairs have various price swings (price changes) during a small period of time (one day). These price swings are what a day trader lives on. In the forex market volatility many times comes hand in hand with liquidity. The most liquid pairs are the ones that are the most volatile. The big 4: EUR/USD, GBP/USD, USD/JPY and USD/CHF are the most liquid pairs that provide the best volatility and hence opportunity for the forex day trader. Within these four pairs, the GBP/USD is the most volatile. Although it is not the most liquid (the EUR/USD is), but it is the most volatility. This pair, traded with the right broker (one that provides a 3 pip spread) can present many profitable opportunities for the astute day trader.



In conclusion, the forex day trader has to be prepared not only with the basic day trading rules, skills and principles. His job is to incorporate into his trading the characteristics and uniqueness of the forex market. Remember, every currency pair might present different opportunities and it is your job to always focus on the ones that best fit the purpose and objectives of day trading. I hope to have contributed to your forex trading education and I thank you for taking the time to read this article.

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Avi Frister is a Forex trader and educator. He teaches revolutionary and unique trading methods to consistently profit from the Forex market. For more information please visit http://forex-trading-machine.com



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Creating True Wealth as a Forex Trader

Copyright © 2009 Avi Frister



Forex, or Foreign Exchange, trading can be a very rewarding. In fact, it can be one of todays best wealth generating opportunities. Regular people like you and me are consistently making $500, $600 and more per day from the comfort of their home trading forex. Many do not know this, but the forex market is by far the largest market in the world. It is estimated that around $1.5 TRILLION is traded every single day. By far more then all the stock, bond and futures markets of all the world combined!



But what does a forex trader do? Simple, buy a currency at a low value and sell it at a higher value, and in the process profit from it! For example, buy Great British Pounds with US Dollars, wait for the Pound rate to go up and make money! This can be done several times a day if the forex trader is a day trader or several time a week or month if the trader is a forex swing trader.



Lets look at the exclusive benefits forex trading offers:



1. The forex trader can start trading with as low as $300. Yes, today most on-line brokers will allow you to open an account with such a low sum making forex trading accessible for virtually everyone.



2. The forex trader does not have to own the money he or she is using to trade currencies. Through a concept called leverage, the traders broker will allow him or her to buy up to 400 times the value of the traders account. For example, if the trader has US $100 in his brokerage account he can buy/trade $4,000! If he has $1,000 he can buy/trade $40,000. That is how traders actually make $500, $600, or $700 per day trading forex, using the brokers money!



3. Many currency pairs are very volatile. Volatility means that they move a lot during the day, from side to side. This allows the forex trader to capture several price swings that this volatility causes. In fact, there are currency pairs that offer up to six daily swing opportunities, each one potentially allowing the trader to capture impressive profits.



4. With the right system the forex trader can trade with just following simple rules. If A happens and B happens then do C. This is called mechanical trading. It requires absolutely no discretion, interpretation or thinking from the trader.



5. The forex market is a 24 hour market. Never stops. This means that as a forex trader you can chose exactly when to trade. Some people have day jobs and do not have the necessary time to trade during the day so they can trade at night. People who make their living as forex traders can chose to trade any time of the day or night. The point being, a 24 hour market allows the trader a lot of flexibility.



6. An incredible benefit of the forex industry is that today all forex brokers allow traders to open free demo accounts. This means that the trader can test his strategies without risking a single dollar! In fact, I always test my trading strategies before going live. I make sure they work before risking real money. I know of no other business opportunity that allows you to see if it works before you spend money!



7. Making a living as a forex trader allows you to be truly free! No office, no workers, no inventory, no marketing worries, no advertising, no selling. For me this is one of the greatest advantages of being a forex trader. No headaches!



In conclusion, the forex market provides a lot of opportunities that many markets and industries do not provide. Many people hear the term forex and get a bit scared, they are afraid of the unknown. Do not be, forex trading is something that people have been using to generate wealth for many years. The reason many people have not heard of this opportunity until recently is that until not long ago trading currencies was reserved to the big dogs (banks, institutions, companies etc). Today with the help of the internet anyone can take advantage of on-line currency trading that was once reserved to an exclusive group.



Wish you well and I hope you found this article useful.

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Avi Frister is a Forex trader and educator. He teaches revolutionary and unique trading methods to profit from the Forex market. He is also the inventor of Price Drive Forex Trading (PDFT), a new and robust method to trade the currency market. Find out how you can be part of a very lucrative opportunity trading Forex at http://www.free-forex-course.com



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Day Trading the Forex Market Profitably- Part 1

Copyright © 2009 Avi Frister



Being a forex day trader can be very lucrative. The currency market is by far the most liquid and volatile market in the world and with this come various opportunities. In this article we will go over very important general day trading principles/rules and then we will see what a day trader has to recognize when specifically day trading the forex market.



The general job of a day trader is:



To control risk



One of the most important jobs as a day trader is to control your risk exposure. In day trading you must look at this issue from a different angle. Since your job is to capture various price swings during the day naturally your profit objectives will be much smaller then of a swing trader (who places a single trade aiming for a much larger profit objective). So, when placing several trades during the day it can be easy to drift away from your pre-determined stop loses. A common (very common actually!) day traders thought is if I extend my stop loss just a bit I hope the market will turn around! Hope is one of the traders biggest enemies. These little extensions of stop losses add up and suddenly without noticing you are losing more dollars per trade than planed making your risk/reward ratio turn against you.



To be disciplined



This principle is key for any type of trading but particularly for day trading. If I had to name one single aspect of a day trader that can make him or her a winner or a loser it is discipline.



It is so easy to deviate from your trading plan, the rules of your trading system or any of the above mentioned components, especially when day trading. Why? Two reasons. First, because the trader is trading very frequent and does not have time to cool down, think, and evaluate. Second, because reality is replaced by hope. Your trading system rules (reality) says: get our of the trade hope says hang in there, maybe it will still be profitable. Your money management rules (reality) say risk only 2% of your account on this trade hope says since I lost on the last trade I will risk 4% on this next one so I can make up for the loser and also be profitable. Your trading plan (reality) says trade each day 4 hours, give yourself Wednesday or Thursday a vacation to rest hope says Since I am not doing very well now I do not need this rest day, and I will also trade 7 hours per day to make up. I know (not hope!) you now understand the point!



To focus on the appropriate time frame



As a day trader your primary concern is to catch intraday swings. Your trades start and finish the same day. Your world is the day you are trading in. You do not care what will happen in the market tomorrow or the day after tomorrow. Your objective when trading is focusing on the appropriate time frame chart. My opinion is that day trading should be done on a 1, 5 or 10 minute bar chart. Remember, you are looking to capture several fast moves during the day and hence you must focus on the charts that best illustrate events as they happen in a short period of time.



However, the fact that you are day trading on a 1,5 or 10 minute bar chart does not mean you cannot use a larger time frame chart for the purpose of analysis. This however, is very subjective and depends very much on the traders strategies and methods of trading. As an example, many day traders would look at one hour bar charts in order to have a view of how the market has been behaving in the last week. Is it moving sideways (and so maybe I should only place trades between support and resistance areas)? Is it trending (and so maybe I should only be looking at placing trades in the direction of the higher time frame trend)? Are there any major support and/or resistance levels I should be aware of (areas where I should refrain from placing trades since it is uncertain how the market will react when reaching them)? Did the market brake out of a congestion area?



Again, it is very subjective. Some day traders believe that with proper larger time frame analysis they can select better their day trades. My personal opinion is that the more you analyze the more conflicts you will have and the more uncertainties will appear (especially if you are new to trading).

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Avi Frister is a Forex trader and educator. He teaches revolutionary and unique trading methods to consistently profit from the Forex market. For more information please visit http://www.forex-trading-machine.com



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Here's How You Can Make Great Money Day Trading Online

Becoming a day trader is becoming a hot means for the average person to earn an income. You will find individuals who do it for a full time occupation and others treat it as a method to earn extra money. Several individuals making remarkable livings with day trading which is why many people are giving it a shot.



Naturally you you won't be able to simply jump in and earn giant money without knowing what you're doing! Day trading has some risks, but learning exactly how to deal with these risks and make wise decisions will provide you with the strongest possible chance at increasing your earnings, and minimizing any downswings.



The way to make money with stocks is to purchase low, and deal when the price is high. So how do you know when to invest in a certain stock?



Here you will find some essential advice in order for you to earn cash with day trading.



Read the news and stay on top of the stock market. You won't have to spend hours with this, but visit a couple of key financial sites you keep up with and it's a good idea to observe a few organizations closely. You need to have a strong overview of the news in the stock market.



Don't waste time on shares with little movement. With day trading day trading, cash is made by buying and selling stocks that are volatile. As its name suggests, day trading means selling stocks throughout the course of a day. You don't have time to wait around and find out what happens as other money making chances are passing you by.



Brush up on your mathematical skills. You'll need to be capable of analyzing financial numbers quickly. Don't be turned off - you don't need to be a mathematical genius - but you will find some fundamental calculations that you will need to have a good understanding of.



Learn how to have lots of nerves. The people who generate the most income have the ability to maintain their emotions even if they are experiencing a downturn. Whether someone is overly excited about a big win, or largely disappointed about a loss, either of these emotional responses can impede your capability to stay in the game, make smart decisions, and keep a clear head.



If you use these trading secrets, you could be set to make excellent income through day trading.. There is a great deal of cash to be made with day trading and with a touch of work, you can be profiting from this electric job.

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Click Here to learn about a day trading system that has been crushing the markets in the past few years and to learn more day trading secrets you can use to make money.



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How To Start Your Day Trading Business

Copyright © 2009 Scott Cole



In this current global recession, many people are seeking new ways to make a living. As a result, many of us turn to day trading as a potential means for making a living.



Unfortunately, the vast majority of people who enter the world of day trading are unsuccessful. Trading is an extremely difficult profession, and most people are not psychologically prepared for the pitfalls. They read one or two trading books and feel that they are armed and ready for the challenge. However, most of these books contain conventional wisdom, and a regurgitation of old ideas that rarely work.



The fact is, most people are not prepared to accept that most trades will be losers or breakeven trades. Most people feel the need to be right most of the time, but trading is not about being right, it is about ringing the cash register.



With all this in mind, here are a few basic ideas on how to start your day trading business.



1. First you must determine how much capital you can trade with. This must be pure risk capital, or, money you can absolutely afford to lose. You can start day trading futures indexes with as little as $5,000, but you need $25,000 to day trade stocks.



2. Be sure you have ANOTHER means of income to pay your basic bills. It is extremely difficult for a new trader to live of income from day trading. If you've recently lost your job, find a part time job elsewhere that still allows you the time to day trade, if day trading is the direction you want to try.



3. Develop a specific strategy for day trading whatever market you intend to trade. For instance, if you plan on day trading E-Mini S&P 500 futures, you must first determine whether you want to be an intraday scalper or whether you want to profit from large directional moves. Remember, if you intend to be a scalper, you must be glued to the computer screen for hours each day. That can be tough for most people.



4. Determine what your basic profit goal will be, and DO NOT make this a monetary figure! Gary Smith, who wrote "How I Trade For a Living" simply had the goal of being profitable every month. It didn't matter whether he made $200 or $2,000 in a month, he simply wanted to make a profit. Adjust your goal for how you will trade. If you decide you want to be a scalper, you probably want to have a goal of being profitable every week, if not every day.



5. Determine which market, or markets you intend to day trade, and then learn all you can about what makes those markets work, and what influences their prices. In the stock market, it is very difficult to learn all there is about how the market works, but if you learn the basics, you will gain a better understanding.



6. Begin by paper trading first, then when you are ready, trade with very little leverage to start. You want to get a feel for whether your strategy will work or not. Confidence is a key to success. Also, even if your strategy is working while you paper trade, things change when real money is on the line! You must maintain the discipline to follow your strategy, if you are confident it will work in the long run!



7. Keep detailed records of your trades! This will help you identify your skills and faults as a trader, and will benefit you in the long run!



These are just some basic thoughts on starting a day trading business. There is an incredible amount to learn about day trading, and the fact is, most people fail. Trading is just like any other skill profession...it requires education and experience to become successful, otherwise, we would all be doing it!

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Scott Cole is a trader and market analyst, and owner of the website http://www.bestdaytradingstocks.com




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Beginning Day Trading

So what is our definition of a day trader? Day traders rapidly enter and exit positions throughout a day. They may trade anywhere from 1 to hundreds of trades, and may stay in their positions from 1 minute to the entire day. It is very common to think that becoming a day trader requires various financial certifications, degrees, and a lot of financial experience. The truth is anyone can be successful day trading without having to go that far. Every day people with little to no experience are getting started and are achieving amazing success. It must also be stated that without the proper preparation and discipline - you can lose a lot of money. What is most important is the work you are willing to put in along with the goals you will be setting.



Your first area to focus on will be research. You should be very capable searching the internet. This will probably become very tedious, but it is essential to your success as a day trader. Begin with searching the internet for "Day Trading" programs that offer training, support, and most importantly a user forum. User forums offer the best platform to ask the easiest to most complicated questions. Forums are a great training vehicle. Make sure the day trading system you select has a trial period. Don't worry, there are many systems out there to choose from. It is best to trial one system at a time, preferably with a trading simulator. You must be absolutely confident with the system that you choose.



Next you will have to research and decide which type of trading instrument you will day trade. Three of the most common and appropriate for day trading are Stocks, Futures, and Forex. There are pros and cons to each. Important considerations include required capital, hours of the day that you can trade, instrument liquidity, how easy or difficult is it to track gains and losses for tax purposes, etc. Here are common capital requirements: The minimum requirement to day trade stocks is $25,000. Most direct access brokers will require you to open an account with $5,000 for Futures. Forex accounts can be opened for as little as $500.



Once you decide on a trading instrument you must begin to research technical analysis, or more commonly known as chart reading. Day traders must avoid directional bias throughout the day. Day traders must rely on their chart analysis and quickly be able to change their long or short positions. The same trade management rules apply regardless if you day trade, swing trade, or trend trade. Cut your losers quickly, and let your winners run. It is important to understand technical charts. However you don't have to become a technical guru to be successful. Aim to grasp common reversal or continuation patterns when starting your trading. If you choose the correct trading system, focus on understanding the system's buy and sell signals.



Lastly, it is always a good idea to just generally watching and learning about the markets. Diving right in to your trading can be a very costly mistake. If you are truly serious about a successful day trading career, you must continually learn and monitor how the markets function. Treat your day trading as if your are running a business. Always manage your risks and make well understood decisions. You can become very successful once you select the proper systems and tools and apply your desire for financial advancement. When you begin your trading it is important to set realistic expectations. Aim for small and consistent gains. They add up! If you set a goal for $100 a day you can make $500 a week. Take action!

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Armando Pena welcomes you to the exciting and financially rewarding world of financial day trading at http://www.daytrade4profits.com




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Want To Make Money With Stocks? Use These Pro Day Trading Tips!

Day trading is becoming an increasingly hot means for people to earn cash. There are people that use day trading to supplement their standard paycheck, and others devote all their time to establishing a significant income through day trading alone. With its outstanding earnings potential and the thrill it provides, it's not surprising more people are jumping into day trading.

Now obviously you can't merely dive in and make giant money without knowing what you're doing! You need to have a certain amount of knowledge when you get started so you can make the most out of your money.

The way to make money in stocks is to buy low, and sell high. So when does anyone know when to jump into in a certain stock?

Make use of these these important day trading secrets to increase your income possibilities.

Be prepared early on. You need to be alert and ready before executing your first trade. You won't need to drop lots of time doing this, but have a couple of key news sites you read and it's wise to observe a few companies closely. Having a strong overview of the stock market, including a few larger stocks, will prepare you to make sound financial judgments.

You don't want to spend time on shares that have little price movement. Change is the name of the game for day trading. As its name implies, day trading means moving shares throughout the course of a day. You just don't have time to stick around and find out what happens as other profitable trades are out there.

Improve your mathematical skills. Having the ability to interpret financial data points and numbers is essential to being a winning trader. There's no need to be a mathematical genious, but you must realize what the financial data mean in order to make fast, dead-on assessments.

Learn how to have plenty of guts. Those who generate the most income are able to maintain their emotions at any point in time. Whether someone is too enthusiastic about a giant gain, or profoundly self-defeated about a loss, either of these responses can hamper your ability to stay focused, take wise actions, and keep a clear head.
You may not get wealthy overnight, but these hints are going to put you on the path to earning some cash with day trading. With the best tools and strategies, you can experience the incredible earnings potential that day trading makes available to you.

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Click here to read about a dynamite trading system that has been making investors huge profits for over three years now!


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