Alex Boyd is a proprietary currency trader and co-founder of the Forex education firm PoseidonFX.com. Bringing years of experience, Alex capitalizes on industry secrets learned during his years as an FX broker to manage his own portfolio, and teaches his Contrarian Sentiment Trading techniques to PoseidonFX subscribers.
Please share and Subscribe to my list to get more interviews like this.
In this recording we discuss the following questions:
1. Is forex the best way to invest money?
2. What to look for when choosing a forex broker.
3. What is the best strategy to make SMALL amounts of money constantly, with minimal risk?
4. Is it possible to make sustainable profits using only technical analysis? What is the best way to combine technical, fundamental and sentimental analyses?
5. What’s the best way to trade the news? What are the most important things to look out for?
6. Considering someone has learned and practiced on a demo for 6 months. How much would you recommend they start with on a real trading account? What leverage? What should they be prepared for psychologically?
7. As far as your experience is concerned, what percentage of forex traders lose/win in the long run? Why?
8. How can one be a good forex trader? Any tips advice?
It just hit me. This name, Joe Lewis and Joe Lewis Trading (JL Trading). Apparently there are two British guys who share the same name and interest. What a coincidence. But it just happens that one of them is the good guy, and the other is, well, not the bad guy, but the crook. OK maybe “crook” is too harsh but what do you call a person who makes mouth-watering offers and promises just so he can have you dip your hand into your pocket and give him your cash.
Which of the two guys do you want to read about first? OK. Let’s start with the good Joe Lewis.
Joe Lewis (Tavistock Group)
He is 78 and lives in the Bahamas. That’s my aunt’s dream vacation destination by the way. I am not shocked why he chose the island but if you have money and you’re successful, no one tells you what to do. He has the headquarters of his company Tavistock Group based there and I think that is partly because of laws connected with trading and investments in general. As a matter of the fact, he’s a tax exile there only to avoid the high taxes of his original country. Makes sense right?
I wrote earlier about some of the best currency traders and now Joe Lewis’ name appears here again. This is a guy who quit school as a teenager to help his dad in a catering business. It’s evident that right from the beginning this man had a knack for making money and staying profitable.
Joe Lewis sold the family business later to enter forex trading. You would have to have balls to do something like this unless of course, you know what you’re doing especially considering the fact that trading forex involves serious risks. And of course Joe Lewis knew his bearings. Have you ever heard of Black Wednesday, or perhaps of George Soros? Joe Lewis was the dude who teamed up with George Soros in 1992 to make big bearish bets on the pound sterling, which made them madly rich.
Joe Lewis’ office, Aviva.
As far as I know, this guy is one of the biggest names in the forex trading circles. He is worth $4.7 billion. “A successful forex trader” will be an understatement. Every forex trader would like to be as successful as Joe Lewis but this would involve a lot of dedication and hard work. Jow Lewis is proof that you don’t need a degree in Finance and Economics to be successful, he’s evidence that you don’t need formal education at all. That being said, I advise my young readers not to give up education just because someone could make it without one.
This is it about the good Joe Lewis. With all his prosperity, I am not surprised some other British dude calls himself Joe Lewis too.
Joe Lewis Trading
About three or so years ago I was looking for a job as a marketer for some forex brokers and landed on Joe Lewis’s page. The broker name back then was JL Trading. When I saw his website I started having doubts about the credibility of this broker. Just his website alone was enough to make me have suspicions. I wrote to him anyway but I wasn’t expecting a reply which I never got. His website was nowhere near professional at all but yet still, he managed to mess up with other people’s money. What were people thinking? That he is the Joe Lewis who worked with George Soros? Seriously? I still have my doubts that this is his real name, if it is, he probably might have changed it years earlier because he knew what he was about to do.
This guy is 59, lived in Turkey and now can’t be found, just like the $200 million of clients’ money that’ he has vanished with. I call him the “British Bernard Madoff”.
His brokerage firm lost all assets as far back as 2009 but he kept on luring other investors into buying into is ideas in hopes that he could recover from the loses made earlier. He traded with emotions, incurred more loses. Real traders don’t try to “fight back” when they lose. I know some people, with no plans when trading forex; when they lose say 10 pips, instead of calling it a day, taking time off to restrategize, they want to win by all means and so try to get back those lost 10 pips, with extra pips for the day. Amateurs. Joe Lewis Trading was one of them.
There are many swindlers like this all over. It’s your duty to find out which broker means business and which ones want to dupe you. It’s my hope that your money never ends up with someone like Joe Lewis, the bad Joe Lewis. Take time to study the market, build your strategy with time and some luck, you could be the next Warren Buffet. Who knows.
Don’t forget by they way to subscribe to my mailing list to get my eBooks and other tips in the future. You don’t want to miss out on anything! It’s free. You’ve got nothing to lose.
Please share your thoughts in the comments. I would love to read them.
What’s more valuable than getting answers to frequently asked forex questions by the chief operating officer of one of the best forex brokers around. I’m talking about Terry Salo of Tallinex! I got the chance to talk to him recently and decided I would try to squeeze as much as I could from him so I could share with you.
So let me not bore you already. These are the questions I asked Terry for my dear readers. I am sure, you, at one point in time have wanted an answer for at least one of these questions. So here you are:
#1. How often do you redefine support and resistance?
It depends on the market. More often than not, support/resistance levels are actually price zones, not exact levels. The most common mistake traders make is they draw way too many levels on their chart.
It is best to define key levels and watch how price reacts to those levels. As long as the key levels are respected, you can keep them intact. For example, if support level has been broken to the downside, it may become resistance if price moves back to the level and bounces off. If it is breached again upwards, then it is time to redefine your S/R levels.
To conclude, market is always dictating which S/R levels to watch and which levels to redefine.
#2. Why are the gaps between buying and selling rates different between different currencies?
This is called the bid-ask spread.
The size of the spread is mainly affected by the liquidity in the market. More buyers and sellers competing in the same space bring bid/ask spreads lower.
The Bid (Sell) is the price for selling the base currency and buying the secondary currency, for example the price at which the EUR can be sold, and the price at which the USD can be simultaneously bought in the EUR/USD pair.
The Ask (Buy) is the price for buying the base currency and selling the secondary currency , for example the price at which one can buy the EUR and sell the USD (EUR/USD).
#3. Is trading foreign exchange harder than trading stocks? Why?
Trading Forex has actually many benefits compared to stocks. The Forex market is seamless 24h market. Also, forex trading costs are lower than those of any other market. Then there is the benefit of leverage – everyone can start trading forex with minimal costs.
Stock trading has many regulations and limits, forex trading does not have those issues. There are some regulations in forex, but nothing like what regulates the stock market.
In forex trading a 100% return on investment within a day or two wouldn’t surprise anyone, and in fact 1000% wouldn’t surprise an experienced trader. Because of this, Forex has become one of the most popular ways to invest.
#4. How can one be a good forex trader?
The key to become a successful forex trader is patience and learning. It is important to get to know the basics of forex trading at first, like with any other business. Then a trader should commit to finding what type of analysis is working best for him/her – fundamental or technical analysis. After that, it is all up to the aspiring trader. It is normal to test different trading strategies at first but the most common mistake new traders make is they move from one trading system to another, thus never mastering one particular system.
When you find a system that works for you – keep at it, get to learn every nuance of it and practice, practice, practice! Keep your losses small and winners big.
#5. What should everyone know about forex trading?
Forex is not a get rich quick scheme. Learning to become a profitable trader takes time and effort. That being said, once a trader has developed a trading system which works for him/her, it is a perfect way to earn your living. Just think of the benefits – you can trade (work) any time you want, all you need is a PC or a laptop and an internet connection. You are the master of your time and no one else is telling you what to do.
#6. Is it possible for an amateur forex trader to make sustainable profits trading forex?
Yes, it is possible. Forex is like any other business which needs to be taken seriously before you can reap in any profits. When a beginning trader is willing to commit time to learn and progress, he/she can soon make steady income from forex trading.
#7. What are the pros and cons of forex vs stock market?
Main benefits trading forex are:
1. High liquidity – An advantage because it means that with a single click of a mouse you can instantaneously buy and sell as there is almost always someone who is willing to take the other side of your trade.
2. Leverage – Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. The trader can control large amount of total contract value with minimal deposit.
3. 24h market – This gives the trader freedom to choose when and what instruments to trade.
4. Low starting costs – Because of the leverage, traders can start with very low investments to earn living out of trading.
5. Huge amount of free educational material available.
#8. What percentage of Forex traders make money in the long run at Tallinex?
It is hard to say the exact percentage. As a true ECN/STP broker, Tallinex is working along with its traders, not against them. We want to see traders succeed. If you don’t have the time or skills to trade forex yourself, you can opt for our professional money managers who trade for you. A lot of clients are using this option to earn steady profits month after month.
At Tallinex, we are working to offer absolutely the best trading environment available which makes trading successfully a lot easier. With market leading execution, low commissions and spreads, everyone can become profitable in the long run.
#9. Can you please explain how Tallinex is able to provide clients with such low spreads? Do the low spreads affect your company’s ROI in anyway? How?
Tallinex gets its liquidity from reputable major banks around the world. We are constantly adding new liquidity providers who all compete to fill your order. That is why we can offer such low spreads to our clients.
Of course, our ROI would be greater if we would add to the spread but Tallinex is committed to its traders and providing the best conditions for forex trading –this is more important to us than little gain in ROI.
#10. What is the difference between your account types and spreads?
The Tallinex ECN-MICRO account type is designed for traders new to the Forex market, and those needing to trade smaller volumes. ECN-MICRO account doesn’t charge any commission on trades and minimum trade size is 0.01 lots. The maximum leverage is 1:1000.
The Tallinex ECN-PRO, raw-spread account provides the ideal trading conditions for professional and institutional traders alike. Maximum leverage of 1:500 and spreads start from 0.0 pips!
PRO-MANAGED accounts are designed for Tallinex clients who want to take advantage of the high potential profitability the Forex market offers, but do not have the time or the desire needed to master the currency markets.
Tallinex’s PAMM system provides Money Managers with the ability to trade your account, but without having (or needing) direct access to it. As the account owner, you will often (though not always) have direct access to your account, allowing you to monitor trades in real-time. Regardless, you will receive a Daily Statement by email that shows the account activity for that day and provides a more permanent record of trades placed.
You can therefore confidently assign your fund to be invested as a managed account with the Money Manager of your choice, secure in the knowledge that only you, the account owner, may withdraw funds.
Think of it as auto-trading by Professional Money Managers, with results audited by Tallinex.
#11. If you had some advice for someone aspiring to be a professional forex trader, what would you tell them?
The Internet is full of free educational materials about forex trading – study as much as you can, be patient and practice. Keep your risk minimal and ride the trend – this is how you can become a successful trader in the long run.
I have personally worked with Terry Salo before and I can say he’s a very simple and kind guy with a lot of passion about what goes on at Tallinex and how they serve their clients. Terry has amassed years in the forex market. From 2003 to 2006, Terry Salo ran his own marketing firm in Helsinki, Finland and managed a little over 200 employees. Between 2006-2009 he was marketing American Express in the Scandinavia while simultaneously, for some time, working as a money manager until 2010. He was Head of Institutional Sales at FinFx, another reputable broker located in Finland till 2011. In 2012 he started Tallinex with an associate, Turkka Partanen, who was also a money manager back then.
Within a year after starting Tallinex Terry and his team had already amassed 10,000 clients! This success is evident of the fact that they stay true and transparent to their clients and put them first. Tallinex is a true ECN broker and I know most traders love ECN brokers so they don’ have to deal with market makers.
Tallinex currently has a workforce of about 20 and operates from Saint Vincent and the Grenadines but with the support personnel based in Tallinn, Estonia.
Forex market analysis is like a three-legged table. Refuse to accept this and you’ll fail. Like it or not. There is the technical analysis, fundamental and sentimental analyses. In this post I am not going to talk about any of them in detail but instead, I am going to hit on one particular factor that influences the forex market a great deal. Technical analysis is everywhere. Almost all beginner traders have at one point in time read an article or two about it, or even gone through all pages of a whole book to learn technical analysis. I wouldn’t be surprised. Technical analysis has become ubiquitous and most of the times people even forget that fundamental and sentimental analysis exist! And this explains why most traders lose at the game. You just can’t win a game knowing only 33.3% of the rules.
Blending in a bit of fundamental and sentimental analyses is essential to making sustainable and constant profits especially considering the fact that forex is designed to make us lose! Yes I said it. And it’s the truth. Have you ever heard of the Non-farm Payroll (NFP)? Do you trade it? If you have and do, kudos! The NFP is a major influencer in the foreign exchange business. It affects not only forex, which means it’s a very important thing to know about. But we’re only interested here on how it affects foreign exchange and our trades. It doesn’t matter whether or not you live in the U.S.A. As long as you have an interest in the foreign exchange, you should be concerned about the NFP reports when they are released. As a matter of fact, you have a choice.
Non-farm Payroll (NFP)
The non-farm payroll is nothing but statistics researched, recorded and published by the U.S. Bureau of Labor Statistics. The figures represent the total number of workers or employees or basically people on the payrolls of all businesses except, like the name “non-farm” suggests, businesses connected with agriculture, general government work, private household businesses and nonprofit organisations. It is a very influential statistic and economic indicator released monthly, usually on the first Friday of every month at 8:30AM Eastern Time. The reason it’s very important is it affects things such as the US Dollar itself, the forex exchange market, stocks and bonds. Almost everything concerned with finances, and that’s why you as a forex trader, should be concerned and pay close attention to it. The NFP figures tell how many jobs were lost or created in comparison with the same numbers from the previous month. Basically what this does is report the state of the economy. More jobs would mean a better economy. From this you can guess the “health” of the US Dollar and how this will affect it’s behaviour in the foreign exchange market. You get the idea. The non-farm payroll accounts for a massive 80% of the labour force that produce the entire gross domestic product (GDP) of the U.S.A. Now, if my boring lecture about how influential and important the NFP is didn’t convince you, this fact should.
So you might have asked, “Why don’t they include businesses related to agriculture?”. Well the simple reason is because farm jobs are seasonal, if you think about it, this makes sense. We want data that is consistent through all months. The same is true for private household businesses and some government jobs. It’s wise not to include statistics from these sectors to have a clear vision of what’s really happening, constantly, in the economy.
The NFP numbers report the net change in the number of jobs lost or created in the US. What do you think a high net change would mean? What would you expect of the US Dollar in that case? If a high positive net change occurs, it means there have been more jobs created, which means the economy has gotten strong and hence the US Dollar too, so the US Dollar then becomes bullish. This is what interests us as traders and informs us how to place our orders in the forex market. The opposite is true when there is a high negative net change. The US Dollar becomes bearish. So if your base currency is the US Dollar, it’s easy to go long or short when the reports come out with high positive figures or low figures (and negatives) respectively. If the US Dollar is your counter currency, you trade the other way.
Fundamental analysis is not centered around NFP numbers. There are many factors involved. Even political news gets to play a part in fundamental analysis, so do reports from central banks about interest rates and state economic factors like GDP and inflation reports among other things. Of course you can’t keep a close eye on all of these things going on, that’s expected. But I wouldn’t turn a blind eye on the Non-farm Payroll reports! No serious traders ignores that. It’s OK if you didn’t know about it. And that’s why you should subscribe now to my mailing list so you don’t miss out on more tips like this in the future!
I would like to read your thoughts about the non-farm payroll. What do you think? Did you trade it previously? Will you start to observe it from now? Share everything in the comments below. I will be happy to read your take on this.
Two heads are better than one and that’s why I have created this section specifically to post forex trading interview questions and answers from the best traders on the planet. During my years of trading I have gathered connections with lots of experts in the field. From time to time on coffee breaks or just randomly I will interview them and share our conversation with you for free.
From these conversations you get a lot more forex tips, tricks and advice to help you become a more informed and profitable trader. Do you have any questions you would like to ask an expert? Post them in the comments below and don’t forget to subscribe to my mailing list to get your questions answered by the gurus in the business. Don’t be shy, the comment section is for you.
Though the foreign exchange market has no central regulatory authority, it no doubt has the biggest market cap on the planet. Believe it or not. An amount about $4 trillion is traded daily. Now this is a lot of money! For this reason, thousands of people, smart, dumb, greedy, helpful, kind, legitimate and crooks have all flung to this particular niche. But why? They all want a piece of that big cake. And they all do get some (the clever dudes), or lose some (the naive ones). I haven’t lost even a cent to a con man in this forex business ever before since I started trading about five years ago. I am not saying I am not prone to someone outsmarting me (even though it’s not possible at this present moment, not in forex) but back then, I didn’t even have a dime when I started. So what was there to scam me of? Nothing.
I had heard about trading from friends, did some searches online and found out people were really making a living trading currencies. In those early days that I didn’t know a thing about trading, I dedicated all my time to learning the trade (no pun intended). And after many years of living off trading currencies I have come to realise there are more swindlers in this market than there are legitimate guys. I have gathered nine of those signs that could help you spot if a forex product is a rip-off. The characteristics that I’m going to mention below aren’t necessary sure signs that a product is a scam, but if you see them, just know it’s a warning and verify further or ask more questions before you dip your hands into your hard-earned cash to feed some crook somewhere.
Sellers of bogus products are always desperate for you to give them your money. They will pursue you and try every possible means so you hand them your money. There’s not much they can do to try to force you to buy their crap. They only way is to try ways to sort of, convince you to buy. If the product is good enough, they should sell themselves.
If you see this sign from the page of some product, just get off and never come back. Chances are that it’s nothing worth spending your cash on.
Scam Sign #2: Overly Marketed Product
Marketing is an obvious thing to do for a new product. Most product owners do it. It’s essential to make sales and get paid back for the work done building the product. But exaggerating the marketing efforts of products are 7 chances out of 10 that the product is crap. Products need some marketing to get introduced to the market. But if you happen to see ads of the same products all over the place, with supposedly real testimonial texts and recordings, just stay away. It’s probably the product owner who has paid actors and people to go on forums and other sites to pretend they have used the product and make uninformed newbies give them their money. A good forex product may be known, but you won’t find deliberate efforts of it being promoted.
Scam Sign #3: Avoidance of Trusted Payment Methods
This might not always be the case I must say. But lots of scam forex products dislike payment methods like PayPal and Skrill for example. The sellers are afraid of charge-backs. Most of them will prefer BitCoin or Western Union because then, once you pay, there’s no way of getting your money back. They funny thing is when they use these payment methods, they add a big “Money-Back Guarantee” when they know clearly that you won’t ever set eyes on your money again. These guarantees are there just to blind you. Aside all these, some sellers might use payment methods like PayPal after all because PayPal favours sellers most of the times when the product sold is a digital one. But if you fail to find a legitimate payment method on the page of some forex product, just use your common sense and look out for more warnings to be sure the product is genuine. Otherwise go spend your cash in a strip club instead if you have enough to lose.
Scam Sign #4: Bogus Affiliate Networks
I am not really sure about now. But about two years ago affiliate network sites like ClickBank used to have lots of crappy products on there. Things have changed, now they have cleared a lot of fake forex products from the marketplace. It’s cleaner now but there still are some fake products on there though. Nowadays all these garbage products are dumped on sites like Clicksure and other affiliate networks that are based outside of the USA. If you’re buying a product through some affiliate network, take a moment to check the credibility of that affiliate network if you don’t find any reason to believe the forex product you are buying might be a scam.
Scam Sign #5: Polished Text, Highly Professional Videos
If a normal forex product that costs $47 or $197 is making Apple-quality videos, with very neatly dressed actors and carefully curated text, trust me, you aren’t buying anything good in most cases. Lots of forex product sellers use actors. There are sites to find such actors and script writers so things look very very professional in a way that you’d almost have no doubt the product is a sham. In some of these videos, if you look carefully you’d realised that even the background that the actor is standing in is staged using a green screen. Or in most cases, if you track their eye movements, you can be sure they are reading stuff from a teleprompter. These are little things you can watch out for to find if a person giving a testimonial or selling a product is fake. You look out for these tips, you find them, get confirmation with other tips listed here, you close the page of the seller, and save your money for something worthy.
Scam Sign #6: Showing Off Stuff They Dream of Themselves
You have in no doubt seen how sellers show off with how much they have supposedly earned from the work of say a forex robot that they are trying to sell to you. The big question to ask yourself is. If that product made that enough money to enjoy the life they are showing you in their pictures, what is your $197 going to add to that? Shouldn’t they be concentrating more on their product to making themselves more cash? That’s because that junk they are selling is making nothing! They want your money and that’s why you should be suspicious and not fall to their gimmicks. Anyone can just google some nice vacation images and paste them on their site and say they are enjoying a good life, so buy that product that’s making them live like they way they wish things really were. Run and never look back.
Scam Sign #7: Photoshopping Proof of “Gains”
I know enough Photoshop to edit some statements from MT4 to make it look I have earned some big money with my forex product robot (which I don’t have by the way) to convince you to buy some crappy product that I created. Even if I didn’t know how to use Photoshop, I could go to fiverr.com to pay someone $5 to do it for me. This is exactly what scammers do. If you see some pictures of statements of profits, don’t fall for it right away. There are investor passwords that these product sellers could share at no cost. Demand for a password instead to log in and make sure the account and the profits are real. Also check the authenticity of the broker on whose platform the supposed profits have been made. Some brokers are crooks themselves and do fake real account for sellers. This way they also get clients they can swindle money from with re-quotes, etc.
Scam Sign #8: Exaggerated Promises
This one should be quite obvious. Just a couple of hours ago I saw some forex expert advisor that had made 10607% net profit. Seriously? The product in question costs $149. I got nothing more to say here.
Scam Sign #9: # Of Copies Left
So there actually is a limit on the number of copies of a digital product to be sold? I didn’t know that. I believe you’re way smarter than this. When a forex product, that is digital has some number of copies left, just know that they are just trying to create a sense of urgency so you dip your hand faster in your wallet. Why should they want to limit the number of their product especially if it’s digital? Shouldn’t they be willing to sell more and more of it? To get more money? Everyone wants more cash right? But no, bogus forex product won’t do that. Knowing you probably won’t think about this, they try hard to make you feel the product will run out in no time so you have to act quick. Just buy the product, come back after few weeks and you’ll see the number of copies left is actually the same, or more, whichever the case, there’ll still be enough left to dupe other traders. This should be the biggest sign for you to stay away from these tricks.
I wouldn’t like to hear you’ve been scammed after you’ve made your way through this post. I painstakingly wrote this to save fellow newbie traders from losing money. I didn’t lose any money, so why should someone get parted away with his money by the bad guys in the business? I am looking forward to your thoughts and contributions that you can share in the comments. I will be happy to read them and will reply if I have to. In the mean time stay blessed and smart.
When the market gets very volatile and prices move like loonies, an opportunity is made to get richer (or poorer if you so prefer). These volatile moments are the best for me, the price movement can be compared to a maniac on cocaine overdose. For most other experienced traders, these are good times as well. Market volatility usually happens when two market times collide. I have come to trust these market time collisions somewhere around the middle of the week. This is where the money is! But be warned that this period is also very risky. Remember to set stop losses. Think of setting stop losses first before take profits. I can’t be sure if you love volatile markets as well but if you don’t, I will show you how I trade them.
Keeping trading strategies simple is key. I have seen lots of trade charts that got me scared. Lots of diagrams, drawings, symbols, etc. Most of the times these come from self-proclaimed experts. If that’s the case, then I’m nowhere near being an expert because I keep my charts very clean, only using a couple of indicators to trade. Actually this is how my charts look like: just two moving averages, stochastic oscillators and a cross-hair pointer — Simple.
Lots of indicators on charts clog up your brain, creating chaos. You don’t want to do that in a highly volatile market. There’s no time! Just get the few indicators you trust and know how to use and work your way through making some cash.
To make money in a volatile market, you have to learn to scalp. Scalping is a trading strategy that specialises in taking profits on small price changes, generally soon after a trade has been entered and has become profitable. Usually within 20 seconds to, say, about 120 seconds. You need to have a strict exit strategy, whether or not you have made the expected profit or not, once you’ve made about 10 or so pips, just get the hell out! (And repeat again and again and again till the market starts to consolidate). The number of pips you want to win actually depends on you and how you’ve planned your strategy (which most people don’t have and even if they have, don’t follow). But bear in mind this is how I personally trade volatile markets.
Spotting signals can’t be left unmentioned. You should be able to use your indicators to help you make decisions and the reason I wrote that lots of items on the chart is useless is because in a highly active market, there just is no room to check all diagrams, trying to find a positive signal before entering a trade. Unless you’re trading long-term, in which case, you should stop reading this post and go lie on the beach. I don’t see why you would want to trade a volatile market if you’re a long-term forex trader. There are lots of signals you can find in candlestick charts to find entry points. In my chart up above, I have circled a couple hammers and other signals. In the coming weeks, I will write about all candlestick signals that will make you some money. So don’t forget to like my Facebook page so you don’t miss out.
One last thing is the timeframe. The timeframe when trading a vigorous market is very important. They let you sort of zoom in and out of how the prices are moving. I use the 15-minute timeframe which works very well. You can set this up when you’re entering the “maniac” mode. I find the 5-minute frame to be quite deceptive as far as signal conformity from candlesticks and other indicators are concerned.
Trading an active market isn’t rocket science if you keep things simple and learn a bit more about candlesticks. You just need some dedication and time to learn the ins and outs and you should be making a decent income from home just trading the forex market in the middle of the week. A lot of people live this way.
If you have some suggestions, send me an email at 24forexsecrets[at]gmail.com Or share your thoughts in the comments section. I would be glad to read what you think.
Is there even such a thing as the best currency to trade (invest) in? All currencies that are part of the traded instruments of any forex broker can be traded. No? Well no, if we’re to consider the title of this post which forces us to prune the available traded currencies down leaving the ones that are worth trading or the ones that won’t cost us much: The “best” ones. So what are the best currencies to invest in? Which ones are not? How do we find currencies to invest in?
Like I mentioned above, any currency pair on a broker’s list can be invested in. But common sense tells us to find the profitable ones. In my opinion those would be the ones with the least spreads. If you pick the pairs with the least spread or commission, you save yourself some money you could use for trading yourself. I don’t believe there’s anything like a best currency to invest in. No one knows that. If people knew, they would be billionaires and wouldn’t write or talk about it. Same way Warren Buffet won’t tell you exactly how he made his success and neither will Lipschutz nor Michael Marcus. And actually if there was such thing, what would be the use of that knowledge if you didn’t know which direction that currency is going? What’s the benefit if you didn’t know your technical and fundamental analyses? Besides that the direction of currencies are controlled by central banks and governments who can make impromptu decisions at any given moment. These are some of the reasons I don’t go with the “best currency to invest in” flow. Because there isn’t.
If I was forced to give an answer, I would say the best currency to invest in would be your own country’s. Why, because you’re in your country (probably) and you know your country better and know how the government thinks, you get the news first hopefully, and you can trade against or for your own currency. You can invest in your own currency in other ways: You could find a company in your country that makes constant profits and trade its stocks among other things. This will help create more employment and increase the value of your currency in the long run. But wait, who wants “the long run” crap? And how many people care about the interest of their country’s economy? Most people want money and they want it now. And few people care about their country’s economy these days to be honest.
I am a day trader and I do scalp a lot. I don’t think much about the long-term. Most of my clients are impatient and greedy. They want money and they want it quickly. That doesn’t influence my trading decisions though because I have my rules that I follow to keep making constant profits when I’m doing money management. I trade only two instruments — EUR/USD and USD/JPY. Nothing more. And as part of my trading plan, which I would advise you to follow, never ever trade more than two currency pairs. Choose the best two, in terms of the cost of trading them, which means choosing the cheapest pairs to trade; the ones with the lowest spreads and stick to them. Trade them on demo for a long time, learn how they behave and move. With time you will naturally get used to these currencies and make more intuitive trades. Also it’s better and easier to remember the characteristics of two people if you’re introduced to them than it is when you have details of fifty people to remember…you get the idea. Just keep things simple.
If anyone told you about some best currencies to invest in. Ask them if they are investing in it themselves. And if they are, ask them why those currencies, if it’s forex and spreads are not part of their reason, seize to be friends with them, don’t visit their blog again and ask them never to contact you ever again. Seriously.
A forex expert advisor (EA) follows a pre-programmed pattern to place orders. EAs are most of the times programmed using the MQL4 language that is dependent on the C language with lots of custom functions thrown in to place orders or trigger stop losses and take profits. On some platforms like the JForex by Dukascopy, it’s enough that one is adept with the Java programming language. So in short, an EA is a piece of software programmed to give trade signals or make trade decisions by itself automatically, hence earning them their alternate names “Forex Robots”.
Usually experienced traders collaborate with coders to come out with an EA. To create your own robot or advisor you have to know some programming and understand how loops, arrays among others work, in addition to of course coming up with a tested strategy that you believe works. Because these advisors are programmed to follow specific patterns, they tend to be profitable only for a short period of time and the die out. The reason is obvious: A constantly changing market and economy versus a statically programmed algorithm. You know what the outcome will be. The EAs fail after a short period of time, if at all, with graceful successes .
Forex expert advisors are just written codes of decision trees. They are just conditions that order the platform to place orders when certain signals from indicators are delivered or simply when some conditions are met. A sample code with buy and sell functions look like the following:
This code with other snippets that the programmer and/or the trader writes are what is executed. These are what make the decisions to buy or sell a currency pair and hopefully make profits while you sleep. The code compiles to an executable .ex4 that you can run on your MT4 platform to see the expert advisor in action.
It’s very difficult to answer this question without getting real facts from a central source, which the foreign exchange market doesn’t have, fortunately or unfortunately, however you may take it. I am not very sure if you’ve heard of this before that 9 out of 10 traders lose their money. As far as my experience is concerned, this is true. I, myself, lost money trading forex in the beginning somewhere around 2009. Now, here’s the thing, forex, as many people might know, is almost a zero-sum game ( “Almost”, assuming commissions or spreads don’t exist). While you’re losing, someone else somewhere is winning. That’s how it is.
You might as well ask, “Why golf hasn’t produced many billionaires or why boxing or swimming or normal office jobs haven’t produced many billionaires?” Well, they have, actually, except that people look at forex differently. People doubt it and most treat it as a “get-rich-quick” kind of thing. They don’t even consider it as something that could potentially be a profession. Poker players even get more attention and “respect” while others even call forex trading “gambling”. Well, truth be told, if you’ve ever asked this kind of question, then forex isn’t for you. Even if it is, chances are that you’ll never become even a millionaire.
I know some forex billionaires and millionaires actually, though not personally, but Joe Lewis, George Soros, Michael Marcus, Bruce Kovner, Paul Tudor Jones, Bill Lipschutz just to name a few, are some of the gurus who have made money trading in the foreign exchange market. All these folks have something in common — They see trends, they act and they are very disciplined. Let’s take one of them for example: George Soros.
George Soros is known as “The Man Who Broke the Bank of England”, (How I would love to have that kind of name!) is a special kind of trader who mostly traded fundamentally, to break the Bank of England. In one trade, he went short on the sterling to make a profit of $1 billion. One trade made him a billionaire already! From his quote here, it’s clear what kind of trader Soros is, and actually answers the question “Why Forex Trading Hasn’t Produced More Billionaires”
I’m only rich because I know when I’m wrong … I basically have survived by recognising my mistakes. I very often used to get backaches due to the fact that I was wrong. Whenever you are wrong you have to fight or [take] flight. When [I] make the decision, the backache goes away.
Most traders can’t even tell when they go wrong nor accept their weaknesses and correct them. Emotions constrict them, eventually killing them.
Joe Lewis is a billionaire, he started trading forex in the 1980s and still buys and sells currencies. He’s a professional forex trader and he’s worth $4.7 billion as of this writing (probably more by the time you’re reading this). This guys is different, he takes risks and wins! Before starting to trade forex, he sold his family business. Would you have the guts to do something like this. I wouldn’t, because I don’t have any family business in the first place. But if I did, I would actually do it! I respect forex enough to call it my profession and this is what feeds me. 90% of forex traders won’t be billionaires because you know what, if they sell their family business, they would risk about 30% at least of their margin on a single trade. Now that’s suicidal. They lose. The problem here is, If I sold my family business or anything valuable at all to enter forex, I wouldn’t risk more than 1% of it on a single trade. That way I have enough margin to support me when things go wrong. I might make a losing streak but 1% risk would put me back in the game, then I would correct my mistakes (start keeping a trading log if you don’t) and move on.
If you’re fairly new to trading or a total newbie, I would advise not to risk more than 2% of your capital at any point in time. No matter what. Sometimes you might think you know enough, but trust me, that “enough” is not enough. Make it a rule that you’re not going to risk 2% of your total margin. Stick to this plan and you’ll be on your way to becoming a better trader than you already are. Let’s say you start trading with a total of $1,000. 2% of this is $20, this buys you 1000 units of say USD/JPY standing (at the time of this writing) at 117.67 ask price. If I won 7pips, for example I would have $0.59 extra. For me this is enough, for most trader’s this is sh*t and that’s exactly why they’d lose and why there aren’t so many billionaires like others expect. If I traded 10 times my capital, this would have been $5.9 profit. Doing this consistently would be a good enough profit at the end of each month.
The few forex traders who are billionaire follow simple rules like these. They are not greedy, they take emotions out of this. They are disciplined and they know when they go wrong. They take note of bad decisions and correct them in the next trade.
I could go on and on talking about the special characters of the many forex gurus on the planet but I’m not sure how this would change you as a trader. If you have some spare time, Google them, learn about their strategies and apply them yourself (It doesn’t have to be a real account). Maybe you won’t be a billionaire but then this question won’t even pop up in your head because half a million will be good enough for you I bet.
Wishing you all the best in your endeavours as a forex trader.