The Forex market is always evolving. In just a decade, it changed from a “private” market where only some special participants were allowed to take part to be an open market that can be traded from anywhere in the world.?
But the changes didn’t stop here. We evolved from manual systems where traders would have to look at their charts during the entire day to the automatic Forex systems, where you just need to leave your computer on and a robot does all the work for you.
Both manual and automatic systems have advantages and disadvantages and you should choose the best one for your own needs.
Let’s start by the manual systems. By using a manual system, usually a trader must understand some concepts about technical and fundamental analysis, about the market itself, among others. This makes you have a longer learning curve but this is what helps you make better decisions.?
Usually, when people say bad things about manual trading they refer to the time spent in front of the computer, just waiting for the right trade. This is in part true; but nowadays, some manual systems already tell you the best hours to trade and they even tell you that if you don’t see one good opportunity in 1 specific hour, then you can turn off your computer for the day. This isn’t a reality for all systems but it’s becoming more common every day.?
The best advantage you have when you’re trading using a manual system is that you’re in control. You control your account, your money, the money you place in a particular trade.
And what about automatic Forex trading systems? If you have a full-time job and just can’t be one hour in front of your computer, that’s probably the best solution for you. But still, you need to be careful with the one that you choose. There are many robots out there that simply don’t have a stop loss placed, or have a bad risk/reward. This may lead you to lose a lot of money fairly quick.?
One of the things that I personally don’t like on certain automatic systems is the fact that they don’t even explain us how they work. The basic assumptions made by the robot to enter in a particular trade may be wrong and may lose money. But not all of them are like this. Some are already stating in what the robots are based (if its only the price, some indicator, etc.).?
Automatic trading systems best advantage is the fact that they don’t require a learning curve. You just install them and they’re ready to do all the work for you.
Choosing between a manual trading system and an automatic trading system may not be easy but it’s essential. No matter which one you choose, don’t forget that you always have free demo accounts to test them and to be sure they’re profitable and consistent before you commit your hard-earned money.
Tuesday 10 August 2010
Monday 9 August 2010
Five Important Points you must know about the Foreign Exchange (FOREX)
1. Knowing the Market and Knowing Yourself Better
Forex trading can be very complicated for beginners. There are some who are too caught up in understanding the complexity of the market that before they knew it they already lost a significant amount of money. To grasp the markets, you need first to understand yourself better. The initial step in enhancing your self-awareness is to ensure that your risk tolerance and capital allocation to Forex and trading are not excessive or lacking. Thus, you need to carefully study and analyze your own financial goals before engaging in Forex trading.
2. Set Your Emotions Aside
As much as possible, don’t let your emotions affect your trade decisions. Trade calmly, never plan to take revenge after losing a trade. Avoid adding lots of positions when winning, being greedy may cost you more in return. Being too excited or too nervous may alter the results that you have envisioned. Moreover, over-trading is not the proper way to go. It will just shake your money management and will dramatically increase your trading risks.
3. Follow The Trend
You must consider the trend as your friend. Though going against the trend is not necessarily bad, it is not necessarily good, as well – especially for an inexperienced trader. Trading against the trend requires more attention, sharp skills and nerves in order to pull it off successfully.
For beginners, you need to remember that when a trend is up, stop selling and when the trend is low, stop buying.
4. Keep It Simple
Too much of something, is always bad. Too much information brings chaos to your system and lead you to bad decisions. Organize your thoughts and create a simple working method. Forex strategies don’t have to complicated to be successful.
You have to understand that the simpler your system is, the better it will work and the better results you will get.
5. Working Smart Is Better Than Working Hard
Learning Forex trading doesn’t really matter how many hours you spent on it but on how you utilize those hours efficiently. For beginners, the best thing to do is to start with swing trading and avoid going directly on day trading.
It is common among beginners to make mistakes. However, you may avoid all of these given the right knowledge. If you want to succeed, try to put your efforts in the right areas. Just remember these 5 simple things and be ahead over others.
Forex trading can be very complicated for beginners. There are some who are too caught up in understanding the complexity of the market that before they knew it they already lost a significant amount of money. To grasp the markets, you need first to understand yourself better. The initial step in enhancing your self-awareness is to ensure that your risk tolerance and capital allocation to Forex and trading are not excessive or lacking. Thus, you need to carefully study and analyze your own financial goals before engaging in Forex trading.
2. Set Your Emotions Aside
As much as possible, don’t let your emotions affect your trade decisions. Trade calmly, never plan to take revenge after losing a trade. Avoid adding lots of positions when winning, being greedy may cost you more in return. Being too excited or too nervous may alter the results that you have envisioned. Moreover, over-trading is not the proper way to go. It will just shake your money management and will dramatically increase your trading risks.
3. Follow The Trend
You must consider the trend as your friend. Though going against the trend is not necessarily bad, it is not necessarily good, as well – especially for an inexperienced trader. Trading against the trend requires more attention, sharp skills and nerves in order to pull it off successfully.
For beginners, you need to remember that when a trend is up, stop selling and when the trend is low, stop buying.
4. Keep It Simple
Too much of something, is always bad. Too much information brings chaos to your system and lead you to bad decisions. Organize your thoughts and create a simple working method. Forex strategies don’t have to complicated to be successful.
You have to understand that the simpler your system is, the better it will work and the better results you will get.
5. Working Smart Is Better Than Working Hard
Learning Forex trading doesn’t really matter how many hours you spent on it but on how you utilize those hours efficiently. For beginners, the best thing to do is to start with swing trading and avoid going directly on day trading.
It is common among beginners to make mistakes. However, you may avoid all of these given the right knowledge. If you want to succeed, try to put your efforts in the right areas. Just remember these 5 simple things and be ahead over others.
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