Tips to Finding a Good Forex Broker
Money management rules should always be the first thing you need to address when you are considering investing in forex trading.
I am sure that you know by now that forex trading can be a risky business. This is why it is important to get qualified advice to be able to protect your investments. Finding a good forex broker would be one way of doing this.
A quality Forex broker will give you all kinds of information about how and where to invest your money with foreign companies. Although Forex brokers are not readily available everywhere there are many places to find them.
Some of the best places to find Forex brokers include places such as:
- Large commercial firms
- Large banks
A Forex broker will also be able to help you learn more about Forex trading such as how and when to invest and how much to invest into a specific system. They will also be able to tell you what the minimum investment amounts are.
It would be advisable to check with several different companies before choosing one as each one has different minimum investment amounts ranging anywhere form $5-$500.
Every company also has their own fees and these fees vary from one company to another just like anything else. These fees are generally based on the type and size of whatever transaction you are involved in. Typically the largest fees are invoked when moving from one fund to another or one account to another but it is advised to always be sure you understand exactly what those fees are and how much they are. Remember that fees is how Forex brokers make their money so make sure you know what you are paying and how much.
Remember that this is a person you should feel comfortable placing your trust in. always be very aware of any Forex broker that tells you to place large amounts of money very quickly. A true quality broker will give you the necessary information and allow you time to review it and make an educated decision. Watch out for anyone that seems to be too impatient as they may not have your best interests at heart.
Remember that it is your money and you have the final say about where and how it is invested and how much is invested. Your broker should only be concerned with giving you sound advice not making your decisions for you. Any broker that tries to make the final decision for you should be avoided at all costs.
Even though you may have the expertise in Forex Trading, that is not the only factor that determines your long term success as a Forex trader. You may have all the knowledge and the know-how on Forex trading strategies, efficient and faster platforms and risk management but without knowing how to manage your emotions, you cannot become successful in trading Forex. Remember that precious money is involved while trading and it can be easily lost. In this blog, we will discuss about the kind of emotions that a Forex Trader should avoid to achieve success. Greed Greed is definitely a huge obstacle while trading. It is understood that one may get huge returns from Forex but one has to be cautious no to be greedy and try to get huge returns on every trade. This may lead you to blow your account. Risking your whole balance on an account for a single trade speculating an enormous return is not the way to earn from Forex trading. Forex trading is undoubtedly not a ‘Get Rich Quick’ scheme. If you want to get rich, you have to do it slowly. To overcome greed, one needs to accept the fact that not all trades end up being successful. With this in mind, you know that the market is bigger than you and mistakes are bound to happen. Follow your trading plans instead of falling into greed. Make sure you always risk a small percentage of your capital in every single trade, and follow through this plan to the point. Impatience Depending on the type of strategy you might adopt to trade Forex, it should tell you when and where to get into a trade (Price action trading). At least this is true for us and is what we train our traders at Fourthstreet Consultants. You may jump into an entry point prematurely and miss a better entry point that would have earned a profit but end up finding yourself taking a loss. If your timing seems inadequate despite adopting patience, adjust your strategy so that you may be able to observe more indicators. This will allow you to grow your patience and save you from entering into trades prematurely. This in turn allows you to earn more profit in your trades and make your trading less frustrating. You can only learn these skills from professional traders who have been successful in their trading career, and is what Fourthstreet.co.ke offers its traders/students. Fear Fear in Forex trading is understandable. Experiencing fear is normal. This fear understandably results from the increased possibility of losing money while placing trades due to certain uncertainties in the Forex market. This can happen to every trader. For example, you hold a position and the price starts dropping. You start getting nervous about losing money considering your last trade was quite unsuccessful. You decide that you cannot keep losing money despite your adopted strategy encouraging you to remain resilient and you decide to close early. The next thing that happens is that the price support comes into play and the price also rises. This shows that your fear was the detriment to your trade and it forces you take a loss. To avoid this, you need to identify the source of your fear and understand how to deal with them to become a better Forex trader. That way you will have turned your fear to a source of improvement. Over-confidence Having a series of successful trades is really good but this can also lead to over-confidence. You may think that you can’t lose and that there are absolutely no errors in your methods or strategies. Confidence is indeed quite important to become a successful trader. However, this is not the case when you think you know everything about the market. Over-confident traders tend to get into trouble by trading larger positions than they are used to or even overtrading. A successful trader needs to always evaluate their trades despite having a long run at gaining profits from Forex. You also need to implement your strategy and implement the right entry points. Needless to say, you also need to limit your losses despite having earned a lot from the previous trades. If you are not careful, you may end up losing all your gains from previous trades. Conclusion Mastering your trading psychology won’t make you money in itself, but if you are not aware of the tricks your own mind is trying to play on itself, you will probably find yourself losing even if you are a good trader and are basically right in your trading decisions. FourthStreet Consultants offers an Online Forex Course that delves deep into the right trading psychology to adopt and much more in order to become a professional trader. FourthStreet Consultants all-inclusive Online Course program for those committed to becoming a successful trader provides step-by-step trading basics that will equip you with the knowledge and information you need to understand and make consistent returns from the Forex market. The objectives of FourthStreet Consultants Education Package are: - To guide candidates in mastering a professional body of knowledge and in developing fundamental and technical analytical skills. - To promote and encourage the highest standards of forex education. - To empower many to be able to seize income-generating opportunities through forex trading.
Multiple time frames analysis can be overwhelming for some. In one frame, we are in an uptrend while, in another time frame, we are in a downtrend.Add in more time frames to check for “confirmation” and confusion can become so severe, people tend to simply freeze.The issue is that there comes a time where the multiple time frames mesh and either the higher or lower time frame takes over.Patterns in one-time frame take on a whole new meaning when looked at in the context of another time frame.There is the belief that the higher time frame carries more weight but remember at any time, one time frame can take over and a turn over happens.In This Piece, I Want To Show You:How to draw different trend linesHow to determine trendHow to trade counter-trend using trend linesTrend Lines And TrendSince the trend on one time frame can become the dominant trend at any time, it’s not a bad idea to see where we are in the bigger picture.Trend lines are good tools to use for trend determination and in the right hands can become a stand-alone trading tool.Related – What Story Does Your Chart Tell You?Not only can they help determine your trend direction, they can also point to the rate of the trend which is great information to have in terms of taking a trade.In defining how to draw a trend line, we open an entirely different issue. Connecting swings in price can be subjective especially if we include internal trend lines.The key is to be consistent at every turn when you draw the lines. This is the standard way of drawing trend lines and because we are using the same anchor for different swings, this is known as fanning a trend line. Trend lines define the relationship between the swings that are used and are useful to determine an accelerating or decelerating trend.1. You can see how the lines start off steep and slowly begin to decrease in the steepness of the line.2. Smaller trend lines marking off the corrections are short term trend lines and can be useful in determining a trade entry3. Internal trend lines also offer opportunity in terms of trade opportunity as they can be useful in an early warning of trend reversalsOne way you become more objective in trend line usage is to only connect to obvious swings and only after a high or low is taken out.Multi-Time Frame Trend Line UsageThe drawing of trend lines is not very difficult and now the question becomes; how to use that information to aid us in our decision making.Drawing lines on the higher time frame charts is simple as you have fewer swings to deal with. The chart below has a daily down trend using trend lines (not seen due to space limitations) and this is an intra-day chart using the one-hour time frame.You can see we have a few more options as a number of swings has increased. Keep in mind this is the 60-minute chart in the context of a daily down trend. The daily down trend has been determined by drawing trend lines over obvious swing highs.1. These dashed lines used to form down trend lines off and kept you on the short side intra-day OR provided targets for counter-trend trades. All three have been broken.2. We started to get higher swing lows which allowed us to draw up trend lines off the lows. Each time price met a down trend line, it gave inflection points for possible action.3. You can see the lines getting steeper indicating the rate of up trend was increasing in the context of a higher time frame down trend.When the trend starts to increase, you can see the trend line is taking a sharper direction and in this case, we may be seeing a resumption of the overall down trend. One thing I hope you have noticed is that at each line, there is some type of reaction.This Does Not Always Happen Of Course But It’s Something To Take Note Of.Often times when a trend line breaks, it is simply moving into another trend rate that is either new or has been shown through an earlier trend line. Keeping in mind previous rates of trend plus the larger time frame trend, can help keep you from being overly anxious to jump into a move.Trend Line TradesI want to dial down into each point in time where price met one of the dotted lines. Dropping the time frame to a factor of four allows a better view of the action and possible opportunity around each point. I have to reiterate that we are in a down trend on the daily chart which we objectively know through our trend line. I also must add that if we continue up from this current area, there is not a trend line offering an inflection point on the previous chart.1. After price breaks the lowest trend line, it reacts off the upper trend line.2. After reacting at #1, price returns to the break out price zone and offers a trading opportunity.3. Price breaks through the tested trend line and travels all the way to another trend line before…..4. Offering a pullback trade opportunity off a formed demand line.5. Price breaks up through the tested trend line and is now sitting at a make or break point.The point is that even though we are a higher time frame down trend, usage of trend lines offered not only a time frame dependent up trend but also trading opportunities.Your Trend Line Trading PlanIn a future piece I am going to expand on the usage of trend lines including channels. For now, take it upon yourself to lay out a trade plan using the trend line information found above. It may not be a plan you trade, but it will give you great insight on how valuable trend lines can be for your trading and may find its way into your trading.Trend lines can help you define the strength of a trend, if a trend is even present, and perhaps give you a signal that the current move is coming to an end through an parabolic push. Just be consistent and clear with their usage.
Trade Management, how to make adjustments as your trade moves in your favor, has become a hot topic in recent LIVE webinars.One of the methods that I personally employ when managing a trade is trailing the stop manually.The chart below will walk you through the process of manually trailing the stop on a trade as price advances in an uptrend on this EURUSD 4 hour chart… The trade begins when a trader takes a long position based on a Slow Stochastics crossover signaling a buy. When the trade is entered at that point, the stop is located at the level labeled “Initial Stop”.As the trade progresses to the upside, and as price action takes out each successive high, the stop is moved up to the next higher low.Looking at the chart for example, when price moves above the high labeled #1, the stop is moved from the Initial Stop level to Stop #1. As price takes out the next high at #2, the stop is trailed from Stop #1 to Stop #2. This procedure continues as long as price continues to advance and make higher highs and higher lows.We can see, however, that price retraces below Stop #4 thereby taking the trader out of the trade with a profit of about 325 pips.Even though the retracement took out the previous low at Stop #4, the uptrend on the pair is still intact.With that in mind, the trader can re-enter the trade when price takes out the previous high at #5. When price trades above that high, the stop would then be placed below the previous low at Stop #5.When price takes out the next high at #6, the entire process begins again.Trailing a stop in trading can be a very effective strategy to “lock in” profit as the trade progresses… in this case to the upside. It is important, however, not trail the stop too closely behind the current price at which the pair is trading. This method of manually trailing the stop based on the previous low in an uptrend provides the trader with a critical guideline. While it certainly will not prevent stop outs, it will permit the trade to have a bit more room in which to develop.In the case of a downtrend, the strategy would be reversed as the pair made lower highs and lower lows.