How To Read Forex Economic Calendar – 8 Most Important Steps to Successful Forex Trading

March 1, 2012 by  
Filed under Forex Trading

How To Read Forex Economic Calendar

After months of practice and learning, every struggling novice trader begins to wonder whether the decision to enter forex trading was actually a big mistake. Why do other traders make money and I don’t? Do these successful individuals possess any special qualities? Can I improve myself in order to finally start making money?

How To Read Forex Economic Calendar

In order to become profitable in forex, you need to not only learn and practice, but work hard in improving yourself. Below are the major characteristics needed in order to become successful. If you already possess the essential traits – good for you! Just keep practicing and soon you will see the cash flow. If you don’t have the necessary traits yet – don’t give up. Start working on yourself. It is possible to craft yourself into a trader.
So, here goes:
1. Don’t Copy

Copying others is absolutely useless in forex. Every trader is unique and his/her strategies fit their personality and goals. You cannot rely on anyone else but yourself.
2. Be Disciplined

Stick to the plan, even when your self-esteem is over the top. Use your experience and knowledge of the market to make the right decisions, instead of irrational i-can-make-a-million-right-now conclusions, without skipping any important steps in your trading plan.

3. Accept Losses with Grace

Losses are not necessary a bad thing – write down the unfortunate experience in your trading journal, analyze why this happened and voila! You have received one of the valuable lessons by learning from your own mistakes. Practice makes perfect – so don’t freak out over the losses. Instead, learn from it and move on. The main difference between a successful trader and a novice beginner is in accepting the loss. The sooner you learn to lose, the faster you earn money!

4. Be Patient and Reasonable

Know exactly why and when to enter a trade. And here is a great tip – say all those reasons out loud. It is a great way to give a last glance before you make a final click.
Don’t expect the profitable opportunities to pop up all day long. Sometimes, it is wise to give it a break and start again the next day with a clear head. Don’t worry about missing out either, because forex market is always on the move. Not catching the big wave doesn’t mean you will be left out without any profits for ages! How To Read Forex Economic Calendar

5. Control Your Money

Forex is not just about making more and more money, but also keeping what you have already made! You need to have very strict money management rules in order to keep your losses at minimum:
· Never trade what you cannot lose
· Determine your target gains and losses before opening a position
· Use stop/loss orders to minimize the risks

6. Keep It Simple

You don’t need to use all available forex indicators and create a one of a kind Michelangelo-like-masterpiece trading strategy. Keep trading ideas to the minimum – know when to get in and out of the trades and stay away from sentences such as “Let’s stay a bit longer and see what happens”!
· Try trading daily during the same hours in order to get full grasp of currency behavior, liquidity and volatility changes.
· Don’t trade on Sundays, holidays and opening/closing of the specific market.
· Stay informed – read the news, follow the economic calendar, keep your eyes on unemployment rates, decisions on interest rates, gross domestic products, industrial production price, index consumptions, retail sales etc.
· Follow the trend – don’t try to find something that there isn’t, just follow the rend and identify the point of inversion.

7. Develop Strategies

Use free demo accounts to develop your own strategy and a good trading plan. List out several possibilities (plan a, plan b, plan c) – and always have a clear instructions from getting out of troubles. The key to success in forex is to know how to behave in different situations, instead of trying hard to predict what market will bring us today.

8. Control Yourself!

Here is the tough part – the psychological issues related to trading. It is important to stay as cold-blooded as possible by controlling your emotions.
Most importantly, don’t blame the market – blame only yourself! Are your losses still greater than profits? Stop trading right now and start analyzing your strategy. There is a flow somewhere and it is up to you to fix it. How To Read Forex Economic Calendar

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Trading Option Greeks Ebook – What 3 Important Clues the Options Trading Greeks “Delta” Tell You

September 3, 2010 by  
Filed under Option Trading

Trading Option Greeks Ebook

The options “delta” is one of the important component of the options greeks. As you might have already known, the options greeks offer you clues to the likely behavior of an option’s price movement in relation to the corresponding price movement of the underlying share.
Besides the delta, the options greeks also include other components such as the theta, gamma, vega & rho etc. In a nutshell, an options delta is basically a measure of the change in the option price resulting from a change in the price of the underlying stock. The delta is usually expressed as a decimal value in the range of between 0. 00 to 1. 00. The other components of the options greeks are also represented in decimal value. In this article, we would explore the 3 critical information that the options delta could reveal to an options trader so that it would give him or her a clearer picture of the potential price movement of the options so as to help him or her make a better options trading decision.
The first information that an options delta could reveal is that it could tell the options trader the percentage chance of an option trade. This percentage chance refers to the percentage chance in which a particular option would end up in-the-money. By the way, when an option goes in-the-money, it would be said to have attained “intrinsic value” and thus would be worth some value to the options trader when he or she either sells the options position or exercise the option. Thus, an option with a delta value of 0. 80 would mean that it has a 80% chance of finishing in-the-money. Trading Option Greeks Ebook
The second information that the options delta provides is the percentage change that an option trader would expect of an option position. This means that the delta would determine the percentage change in the options price movement in relation to the corresponding change in the price of the underlying stock. For example, an option with a delta value of 0. 60 will move 60% of every one-point movement of the underlying stock. If the underlying stock moves $1. 00, then the option would move $0. 60. So if an option has a delta value of 0. 90, the option would move $0. 90 on every $1. 00 movement in the underlying stock; I guess you get the point.
The last important information that the options delta can provide is the hedge ratio, which is the amount of deltas needed to properly hedge a particular trading position. For example, an investor who wants to implement a delta-neutral strategy may buy up 100 shares of the underlying stock and hedge the position with 2 nos. of at-the-money put option which have a delta value of around 0. 50 each. Since the underlying stock has a delta of 1. 00 and the delta value of the 2 put options would add up to the delta value 1. 00 too, this would thus establish a delta-neutral trading position.
As mentioned earlier, the options delta is an important component of the the options greeks which could tell an options investor how to determine the likely price movement behavior of the options in relation to the corresponding price action of the underlying stock. The delta basically determines the percentage chance, the percentage change and the hedge ratio requirement of an option trading position. Thus, the options trader is advised to take a look at this important component of the options greeks the next time he or she make a options trading decision. Trading Option Greeks Ebook

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What are the important economic reports that affects Forex?

August 29, 2010 by  
Filed under Videos

I’d like to know all important economic or banks reports/meetings that affect Forex. Please rank it by impact on Forex and the time of release.
Thanks in adv for any reply.

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