Tag Archives: forex trading strategies

Advantages of Forex

Forex & Its Advantages

Forex Market

Trading forex has a lot of benefits and advantages. Here are some of the reasons why people choose to invest in this kind of market:

No Commissions

In the world of forex, there are no clearing fees, exchanges fees, government fees & brokerage fees. A lot of retail brokers are being compensated by the “bid-ask spread”for their services.

No Middlemen

Middlemen are not present in this market. Spot currency trading eradicates them allowing you to trade directly with the market responsible for the pricing on a particular currency pair.

No Fixed Lot Size

Lot or contract sizes are determined by the exchanges when we talk about future markets. Let’s take for example the silver futures. Silver futures’s standard-size contract is 5,000 ounces. On the other hand, in spot forex, you determines your own lot or position size. With this kind of strategy, spot forex allows traders to participate with accounts as as $25.

Low Transaction Costs

Under normal market conditions, the retail transaction cost or the “bid-ask spread” is typically less than 0.1%. On the other hand, larger dealers may have the spread for as low as 0.07%. Take note that leverage always an important role in this process.

24-Hour Forex Market

Don’t worry about the opening times of Forex Market. It’s open 24 hours a day from the Monday morning in Australia to the afternoon close in New York. This only means that forex market never sleeps. This will allow you to trade in the morning, noon, night, during your breakfast or even while your sleeping. Now, when is the best time to trade? We’ll find out in the coming lessons.

No One Can Corner the Market

You already know how big forex market is, right? Therefore, no one can corner or control the market price for an extended period of time because of the large number of participants trading every single second, minute or hour of the day.

Leverage

In the world of forex trading, a small deposit can control a huge total contract value. Leverage plays an important role in forex trading. It provides the trader the ability to generate acceptable profits, and at the same time keeping the risk capital to a minimum.

However, you have to remember that leverage has a double-edged sword capability. If you don’t comply with the proper risk management, then this high degree of leverage can lead to large losses and gains as well.

High Liquidity

Forex market is huge because of the large numbers of participants. This is the reason why it’s liquid. It is indeed extremely liquid. In a more clearer point, this only means that under normal market conditions, with a single click of your mouse, you can instantly buy and sell at will. Expect that there will usually be someone in the market who’s willing to take the other side of your trade. Don’t worry. You will never stuck in a trade. Remember that you can control your online trading platform, which allows you to automatically close your position once you’ve reached your desired profit level, and/or you can also close a trade if it’s going against you.

Low Barriers to Entry

I am pretty sure that you are thinking about the cost of currency trading. You would think that it costs a lot of money. In fact, it’s certainly low compared to trading stocks, options or futures. It’s good to know that there are many online forex brokers who offer “mini” or “micro” trading accounts for as low as $25 minimum account deposit.

With this kind of amount, you can definitely start trading forex. This make forex trading accessible to individuals who belong to low-to-middle income families. It may not be a big start, but it will surely give you the chance to experience trading.

Free Stuff Everywhere!

A lot of forex brokers online offer “demo” accounts to give you a taste of the basics, practice trading techniques and strategies. This will allow you to hone you skills towards better forex trading.

Don’t worry, “forex demo accounts” are absolutely free!

Demo accounts are very valuable indeed. These accounts will not only allow you to save money but will certainly give you an opportunity to try trading using “play money” before getting and opening a live trading account. This time, you need to risk real money.

After learning and understanding the advantages of the forex market, it’s now time to compare forex market with the stock market!

Proceed to the next lesson. Forex vs. Stocks

Why Trade Forex?

Forex Market – Why do Traders Love Them

There are many reasons why they love the Forex. Let us discuss them one by one.

In the next chapters, you will be able to know why traders love Forex. Knowing them  allows you to understand Forex, stocks and its advantages. Learning these important lessons will give you the chance to be successful in the world of Forex Market, stocks and exchange.

Forex Market

Why Trade Forex Market Lessons

Advantages of Forex Market

– This includes low transaction costs & high liquidity

Forex vs. Stocks

– Which is bigger, Forex or Stocks? No one or nobody can corner the forex market even the largest financial institute. 

Forex vs. Futures

– How does futures market trade work compared with the Forex Market? As we all know, the futures market trades a shrimpy amount of $30 billion per day. That’s $30 billion. Sounds huge isn’t it? Well, that’s nothing compared to the FOUR TRILLION that is traded in the FOREX MARKET everyday.

 

Forex Trading Strategy – How to Trade the Forex Trend

One of the best Forex trading strategies that you can implement into your Forex trading is trading WITH the Forex trend. Though counter-trend trading can be very profitable if you are skilled enough to do it (and I personally have a counter-trend scalping strategy that is VERY profitable) I would suggest that if you want to increase your Forex trading results that you focus on trading with trend.

“The Trend is Your Friend”

There is an old saying in the Forex trading world, “the trend is your friend” which is absolutely true. In fact, 70% of all counter-trend trades, where you are trading in the opposite direction of the trend, fail. So if you know this, that 70% of all counter trend trades fail, then I am sure you agree that a Forex trading strategy that you need to add to your arsenal is to only trade with the trend, at least until you are very skilled at counter-trend trading.

 

The Mother of Forex Trading Strategies – Trade from the Daily Charts

Forex-trading-strategies-gbpjpy-daily-chart

Forex trading Strategies: Sometimes choosing the right Forex trading strategies in your Forex trading can be very overwhelming. There seems to be 1,000,001 traders out there telling you that they have the best Forex trading strategies for beginners and pros alike. So the question is this…”Josh, if I want to improve my Forex trading today, what are the best Forex trading strategies that I can implement..TODAY! I am going to show you one of the best Forex day trading strategies you can use.

Most Forex traders change Forex trading strategies like they change their underwear. They always seem to be search for the “holy grail” of Forex trading strategies. And of course I personally believe that the “holy grail” of Forex trading strategies is developing a proper money management plan. But once a trader has their equity management plan and they learn how to trade simple support and resistance from key levels, most of the problems that I see with traders who are struggling with their Forex trading come down to the chart time frame they are trading.

For some reason I see newbie traders trying to trade from the 5 minute charts, trying to scalp the market, and are getting slaughtered. Though trading from the 5 minute charts works well if you are scalping the market, the lower time frame charts can also cause a lot of stress because of the quick movements it can make. So whether you are a complete Forex beginner or you are a seasoned trader who may be struggling with your Forex strategies. I am going to give you my Forex strategy secrets. I am going to suggest that you scrap the lower time frame charts and adopt one of the best Forex trading strategies…start trading from the daily charts.

The reality is the lower the time frame of your chart the more “noise” you are going to see. Let’s take a look at a 5 minute chart on the GBP/JPY. If you look at the chart below, though it is not impossible to trade most of the potential trade opportunities are going to be quick, aggressive, and will offer a unfavorable risk/reward. And unless you are a very skill as a Forex scalper, trading from the 5 minute charts is NOT one of the greatest Forex trading strategies you can implement. Price action can be very bouncy on these lower time frame charts. You can see that price is jumping around without much of a definitive direction.

forex trading stragies - 5 Minute chart

Forex Trading Strategies : The Daily Chart

Now let’s take a look at the same currency pair on a daily chart. Each one of these candles represents an entire day. Now, if you are trading from the 5 minute charts you need to be in front of our charts constantly in order to find a solid trade. But when you trade from the daily charts you can plan way in advance what your trade will be because you are going to be taking your trades from key levels. Trading from the daily charts allows you to clearly see when you would find potential trade setups and plan your trades accordingly. We will get more detailed on other Forex trading strategies such as trading from key support and resistance levels and price action on how and where to enter these trades from the daily charts. But for now, I just want to drill into your head to start trading from the daily charts.

Forex-trading-strategies-gbpjpy-daily-chart

 

Forex Trading Strategies: Using Heiken Ashi Candlesticks

Now, I am not going to get too detailed on one of my favorite Forex trading strategies when trading from the daily charts. And that is the use of Heiken Ashi Candlesticks. In a nutshell, Heiken Ashi candlesticks help to clear out some of the “noise” from the charts. If you look at the chart above you will see standard Japanese candlesticks. Red candles mean price went down for the day and green means price went up for the day. You can see that the color of the candlesticks can sometimes change from day to day. Now look at the chart below. This is the exact same chart as the chart above but I changed the candlesticks to Heiken Ashi. Do you see how much smoother the chart looks? I will be writing another article on using Heiken Ashi candlesticks shortly.

Forex trading strategies gbpjpy daily heiken ashi andlesticks

So in a nutshell folks, if you are struggling with your Forex trading, trying utilizing one of the simplest of Forex trading strategies..start trading from the daily charts. For more Forex trading strategies visit our YouTube Channel. You can also register for free to receive Free Forex training., Forex trading strategies and Free Forex Entry Strategies here.