Forex Trading Strategy ? a Simple Method for 100% + Annual Gains

September 22, 2011 by  
Filed under Articles, Currency

The Forex trading strategy we are going to look at here is not complicated and anyone can do it, but if it is executed correctly it can make you triple digit gains or more with very little effort or monitoring.

So here is your simple forex trading strategy for big gains.

Fundamentals

The first place to start is with the fundamental supply and demand situation.

This sets the tone for the longer term trends that last for months or years and these are the trends you want to be in on.

Currencies move in line with these fundamentals longer term and you are really looking for strong GDP growth. If you look at the currencies that did best against the Dollar this year its countries with strong GDP and Australia led the pack against the dollar.

Two Countries that have economies that doing well compared to the US at present are Australia and Canada and these are set for far higher prices into year end.

Getting In on The Action

Currencies trend for years we all know that but its getting in on the trends that is the hard part and your aim is to get in and then simply hold the trend.

Any currency that is bullish will become overbought at some point and break and when these breaks come you buy them

Use Sentiment tools

Always use these two sentiment tools – Net Traders Positions and % Bullish to check that sentiment is not in over bought territory when you enter the trade. Start with your weekly charts and loo k for support and time your entry with your daily charts.

Risk – Reward

Don’t over do the leverage! You can get 200:1 but on a trade about 10:1 is fine for a buy and hold strategy. What you are going to do then set a stop and leave the currency alone. Hopefully it will trend for months and make great gains if you have been careful in your selection.

That’s your Forex trading strategy! It’s extremely simple but it will make money if executed correctly. The real key is not to overdo leverage have a wide enough stop, so you are not taken out by normal volatility and let the trade run. There are some excellent trading opportunities around that will enable you to do the above so take a look at them and try it.

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Option Trading Training – make the move from gambling to sound investment

August 5, 2010 by  
Filed under Option Trading

You have probably heard of the idea of using ‘options’ in trading on the stock market, as one possible active strategy to use in preference to buy-and-hold. You have probably heard of the fact that option prices are much more volatile than share prices, and that you can buy and sell options without ever having to buy the shares themselves. If you are just starting your options trading training, you may not yet understand where these ‘options’ come from. If I buy a call option, I am agreeing with another party that I can choose to buy the corresponding shares from that party, at the agreed price, at any time up to the expiry date of the option. But, as in any deal, there are two sides to this trade. If I can buy the option from the other party, then he is selling the option to me. He can do this because he actually owns the corresponding shares, so he can supply the shares to me if I choose to exercise my option in the future. Why would he do this? Well, if I am buying the option because I have an expectation that the price is going to rise above the agreed option price (the ‘strike price’), then you can see that his expectation must be the opposite – that the actual price will remain below the strike price, in which case I am not going to exercise my right to buy at the strike price. So what? So, I paid him for the right to buy at the strike price – if I don’t exercise my right to buy, then he simply pockets the price I paid for the option, and it is pure profit to him. It’s a gamble for both sides – if the market price rises above the strike price, the buyer of the call option is in profit; if it doesn’t, the seller keeps the price paid for the option and he is in profit. But look – this ‘other party’ is not some special magic kind of dealer – he is just someone who owns the shares on which he is offering to sell an option. If you have a portfolio of shares, there is nothing to stop you offering to sell call options on your shares. You get an immediate payment for the option, and either you simply keep it, or you have a guaranteed sale price for your shares. As you might expect, there is a similar situation for put options – someone has to be selling the put options in order for you to be able to buy them. As a further variation, and somewhat more risky, you can sell an option for shares you do not currently own. This gets you an income from the sale in the short term, but if you are on the losing side of the gamble then you have to go and buy the shares at the current market price. As you go further into your options trading training, you will begin to understand the risks and benefits, and your trading will move from gambling to sound investment.

Bill Stewart is a work-at-home geek specialising in options trading. For tips and information visit Options Trading Training

Online Currency Trading – Forex Trading Strategies

July 14, 2010 by  
Filed under Currency

Foreign Exchange Currency Trading Current monetary policy allows for free and open exchange of currencies at market rates for most US and European trading partners. In essence, by looking at the exchange rates, and by prognosticating on foreign and international news, foreign exchange traders are making gambles that currency valuations will change in the direction they’re anticipating in the future. Where the gamble comes in is predicting the time frame. Billions of dollars are run through currency exchanges every day, trying to make money on changes in the market that come with 2 seconds of notice for a fraction of a percentage point – and if you’re the sort of person who can handle that kind of job, you can make a LOT of money at it with properly honed instincts. A smaller scale foreign exchange currency trading strategy is to do positional buys. For example, right now the Euro is slightly lower than its historical average against the dollar. If oil prices rise, it’s likely that the dollar will drop against the Euro, slightly. If you invested a thousand dollars into Euros at $1. 20 per Euro, you’d have 833. 33 Euros. If the Euro rose to $1. 25 per, your 833. 33 Euros would sell for 1040 dollars and some change. Five and six cent shifts in the dollar to Euro exchange rate can happen weekly; the trick is knowing how to play them, and to watch long term trends in addition to the short term bustle. One of the significant advantages of buying foreign exchange investments is that you’re always guaranteed to have something left; it minimizes your risks of a catastrophic loss. It can also get you a rate of return of 5 or 6% in a month, as opposed to a year. Of course, it can also depreciate in value by 5 or 6% in a month as well. . . Spotting trends is what separates the good forex traders from the mediocre ones, though there are some tricks of the trade. The first, if performing a buy-and-hold strategy is to make sure that whatever currency you’re buying is held in a mutual fund in its native currency exchange – this smoothes out any downturns in the exchange rate, and can become an added bonus when you compound the interest with the difference in the exchange rate when you’re done. This does require a substantial initial investment – usually $5,000 to $10,000 or more. The second is the stop-loss order; in essence, this says “Stop the trade if the price changes outside of the following band”. Given the automatic arbitrage systems, this is useful to minimize risks. In terms of trading volatility, you need to decide if you’re going to be a day trader, or a position trader. If you’re looking at making this a career, day trading is the way to go; it’s very easy to make (and, alas, lose) fortunes doing rapid trading on the currency exchanges. You’ll need to be well versed in the rules for individual exchanges, when they open and close (currency exchanges are mostly based out of London, and Singapore’s exchange is important for the Asian market). You’ll also want to keep well versed not just on financial news, but world events. Changes in oil prices, trade policies, union rules, even fashion trends, can foretell trends on how currency exchange rates will move. Position trading (as described above) is better for single investors working the markets for themselves. An important consideration on all foreign currency exchanges is to remember to buy low and sell high. Don’t cling to investments for patriotic or sentimental reasons; that’s the surest way to lose your shirt. It’s also important to diversify – take your profits out of commodity and currency exchanges and put them aside in something more stable, to minimize your risks. Also, focus on multiple currencies, and look for currency exchange index funds, which tend to minimize the overall risks of this investment strategy.

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