Basic of forex

I've identified 4 basics for you to notebecause I'm someone who firmly believes ingetting the fundamentals right first!
1. *Choosing a broker* One the first step is to choose a right broker to start your currency exchange trading. Today trading is done online and the brokers allow you to open trade accounts in their site after investing an initial capital. Select the broker that operates on low spreads. Your broker must have tie ups with large banks. Check to ensure that they are registered with futures commission merchant (FCM) and regulated by commodity futures trading commission (CFTC). 2. *Fundamental analysis of the market* Fundamental analysis is done to understand long term trends. If you find it difficult to value a company, then you can try valuing a country. Different meetings will be conducted often and you must get the quotes and comments from the reports of these meetings to better understand the market.
3. *Technical analysis of the market* The technical analysis is done to understand and analyze the price trends as a result of change in the currency conversion rate. The strategy used in other equity markets can be used to analyze the foreign currency exchange market but they must be modified appropriately to suit this market which is open 24 hours on all working days.
4. *Money management* The sole purpose of currency exchange business is to generate profit and make big money. Hence you must have tools to manage your money you are trading. Your broker must provide you these tools. You must be aware of how much you are investing and how much you are getting back. You have to measure your success from the profit made after a day and not after each trade. Thats all for today! Talk again real soon.

TO BE DICIPLINE TRADERS

Attention! All Stock, FOREX, and Futures Traders...
"To Be A Winning Disciplined Trader, You MUST Install Within You The Mental/Emotional Habits and Skills of a Winning Disciplined Trader... And We Can Make That A Reality For You Within Weeks!"

The Fact Is: The Best Trading System In The World Won’t Do You Much Good If You Don’t Have The Mental and Emotional Discipline to Run Your Trading Plan.

This is not a shocking statement to any trader who has traded for even a few months.
Has This Happened To You?
Inability to pull the trigger on a trade, watching markets “go” without you when your trading plan GAVE you the signal to get into the market…
Lifting your stop because you didn’t want the market to ‘take you out’ only to move higher again (because that’s what happened to you the last time), then to see a free-fall result where you get sick to your stomach when you finally DO get out…
Not taking your profit when your trading system tells you to because a news report eluded to the fact that ‘this could be the big one’, only to have the market come back down and have you successfully turn a nice winner into a big loser…
Sound familiar?
This is ALL DUE to lack of trading discipline… the strength…no, the GUTS to stick to your trading plan.
The good news is you're fixable.
The REAL Key To Being A Successful Trader Is NOT Having The Right Trading System.
If your trading system WAS the key to being a successful trader, every trader who used that trading system would be a winning trader. And that’s not true.
The REAL KEY To becoming a successful trader is to make sure you have the mental and emotional discipline to run your trading plan.
So the question becomes,
“How can I become a disciplined trader…so I follow my trading plan without hesitation, fear or doubt…every time?”

Here’s What WON’T Make You A Disciplined Trader (These May Surprise You!)

Reading A Book About What You Should Be Doing – Sure, when you read a book that tells you the horrors of trading with reckless abandon, concluding in the suggestion that you need to be more disciplined with your trading… you’ll walk away saying to yourself, “The author is right! I have to be more disciplined!” Then what? Unless you are given the tools to change your trading habits and SUPPORTED in using those tools, you’ll just wind up frustrated with the fact that you’ll remain the same out-of-control trader!
Learning From Your Mistakes – If you only analyze your trading mistakes on the conscious level and your subconscious mind is still on the same old program of “I’m likely to make another mistake again”, then nothing will change. You see, 90% of the power of mind is wielded by the subconscious mind…which can work for you or against you. So it’s IMPERATIVE to have your subconscious mind working FOR you. Learning from your mistakes on a conscious level will do little to change your trading habits.
Talking To Other Traders About How Tough The Market Is – Misery loves company. It’s easy to twist the truth. Somehow, you and your trading “friends” twist the truth to make the MARKET responsible for your losses, not you. Until you take responsibility for ALL of your trading results, you and your trading buddies will just go round and round… then downhill.
I haven’t put you through the pain of the truth, without knowing I had a CLEAR and CONCISE solution to show you how to be the wise and disciplined trader you CAN be.
So…
Here’s What DOES WORK To Become A Disciplined Trader
Adopting A Method To Train Your Subconscious Mind – There are two methodologies, hypnosis and NLP (Neuro-Linguistic Programming), that are effective in influencing your subconscious mind. The more specific the suggestions you make to the subconscious mind, meaning specific suggestions for traders, the more effective the suggestions will be in changing your behavior patterns…whether that means having the strength to pull the trigger on your trades or keeping your stops in where they’re supposed to be. “Old-school” hypnosis, however, requires 20 or 30 minutes in a relaxed (alpha brainwave) state to “train”, and that’s a lot of time for traders. In a moment, I’ll let you know how you can train in 8 or 9 minutes!
Doing “Affirmations” – You know…listening to positive statements over and over again while your riding in your car, working out, taking a walk, etc. Convenient. However, because affirmations are done in a “waking state” (not when your relaxed), they are marginally effective. However, if you use subconscious training (relaxed-state training) as your main training, you can use affirmations to effectively SUPPORT and ENHANCE the work you are doing with your relaxed-state training to empower your subconscious mind.
Keeping A Trading Journal – When you review your trades on a daily basis and write down your experiences and how you want to improve for tomorrow’s trading, it’s very powerful. You’re involving the senses of touch (writing) , vision (looking at what you’re writing), hearing (yes, if you whisper to yourself while you write)… all conduits to impressing neuro-pathways on the subconscious mind. But possibly even MORE importantly, by keeping a journal, you’re taking responsibility for the day’s trading results and your projecting what you will do to improve them. Keeping your journal properly (and we’ll show you how) is a very effective tool to get you disciplined.
Now that you have a little better handle on what will work for you to get you to be the “Ice-In-The-Veins” trader that you desire to be, you’ll be glad to know that Subconscious Training Corporation has put together a revolutionary intensive, JUST FOR YOU, the purpose of which is to have you on your way to being a Rock-Solid disciplined trader within weeks!...

DISCIPLINE & PSYCHOLOGY IS NO. 1 IN TRADING

Well, it's time to "pull the trigger" if you're serious aboutFINALLY mastering the discipline & psychology of trading. Anyone who's studied with me or who's followed my emails overthe years knows how important I believe the discipline &psychology of trading is... -in fact, you could argue that a LACK of discipline & psychologycould easily turn even the BEST trading method into a TOTALLY LOSER... -and, conversely, by MASTERING discipline & psychology, youcould turn a relatively lackluster trading method into a SOLIDone. But the best part is... if you already are using an excellenttrading method and then you figure out, PERSONALLY, how toachieve "ice-in-the-veins" discipline to "pull the trigger" onthe method again and again... -well, that's getting pretty close to trading NIRVANA if you askme.

2% rule to manage your risk in trading

In previous articles, it has been stated that you should aim to trade another day. While, for most people, this seems like the most obvious thing to do, in practice many traders get wiped out too quickly simply because they take on too much risk. The best way in which you can successfully trade another day is to limit the amount of money that you can lose on one trade. Most traders limit their losses to a maximum of 1-2% of their account on one trade. Some even go lower than this, and for higher value accounts it may be more appropriate to risk perhaps only a quarter of a percent. The power of this can be demonstrated in the example below.
Example 1Let us assume that there are two traders – trader A and trader B. Both have an account size of $10,000. Trader A has a rule that they will risk no more than 2% of their account while trader B will risk no more than 10% of their account. Let us also assume that both traders have exactly the same system and enter and exit a stock in exactly the same way. There are 10 trades altogether with equal number of wins and losses. If a trade wins, Trader A gains 2% and Trader B gets 10%. Trader A
Value of Account ($)
Amount of capital risked ($) (2% of value of account)
Result of Trade (Winner or Loser)
Resulting Value of Account ($)
10000
200
LOSE
9800
9800
196
LOSE
9604
9604
192
WIN
9796
9796
196
LOSE
9600
9600
192
WIN
9792
9792
196
LOSE
9596
9596
192
LOSE
9404
9404
188
WIN
9592
9592
192
WIN
9784
9784
196
WIN
9980
Final Value 9980

Trader B
Value of Account ($)
Amount of capital risked ($) (10% of value of account)
Result of Trade (Winner or Loser)
Resulting Value of Account ($)
10000
1000
LOSE
9000
9000
900
LOSE
8100
8100
810
WIN
8910
8910
891
LOSE
8019
8019
802
WIN
8821
8821
882
LOSE
7939
7939
794
LOSE
7145
7145
714
WIN
7859
7859
786
WIN
8645
8645
865
WIN
9510
Final Value 9510

As can be seen in the example above, it does not really matter whether a trader risks 2% or 10% of the account – the final result is almost identical. Trader A has ended up with $9,980 and Trader B has ended up with $9,510. Each trader will lose some money in this example but the final amount is still very similar to one another.
Example 2
However, let us now look at another example. Let us now assume that each trader is on a losing streak and has ended up with 6 losses in a row. Let us now examine how much each trader will lose.
Trader A (2% risk)
Trader B (10% risk)
Trade Outcome
10,000
10,000
Lose
9,800
9,000
Lose
9,604
8,100
Lose
9,412
7,290
Lose
9,224
6,561
Lose
9,039
5,905
Lose
Final Value 8,858
Final Value 5,314

The results show that in total, Trader A has lost 11% of the account while Trader B has lost almost 47% of the account.Trader A has essentially taken a minor flesh wound but Trader B has taken a near mortal wound losing almost half of his account in only 6 trades! The psychological impact of the losses for Trader B can be devastating and may result in clouded judgment and severe stress.
It can be argued that from time to time you will also have a string of gains that may make taking on more risk more acceptable. However, this is not a good idea for the following reasons:
Almost 95% of new traders will lose in the initial years – this makes losing 6 straight trades more probable than winning 6 trades
Making a lot of money in the initial years may severely inflate your ego and make you more liable to take on more and more risk. This is dangerous. The initial years are a time of learning and making mistakes. Do not concentrate on making a lot of money in the first few years; concentrate on becoming a good trader.
There are always opportunities to make money in the market, so if you miss a good move, so what? You can always take the next one! So do not be so eager to make a large amount immediately. Build up your account slowly and learn from the process.