Now do Forex Business sitting at your house.

The more you understand about any subject, the more interesting it becomes. As you read this article you’ll find that the subject of forex home business is certainly no exception.

When running a forex home business, a person quickly gains knowledge of how the business world works. Whether it be selling crafts, doing a home delivery business, or selling real-estate, after investing a lot of time and effort into a home or small business, a person quickly becomes aware of the few basic business truths that govern business.

One of those truths is that you have to have time and money to start a small business or any business for that matter. More often than not, the people that have the time dont have the money to invest in a home-based business and the people that have the money dont have the time. With Forex home business, it is quite possible to generate an income with a small time investment per day, after studying FOREX for a few months, and a very small investment as little as $50 in some cases.

The second truth, and these are probably quite obvious to most people, is that in order to make money a business has to have some sort of product to sell or perform some type of service. In the FOREX world, nothing is being sold and no service is being performed, but rather money is being exchanged. You are making a profit based on the actual exchange value of one currency against another currency. This eliminates the need for employees, such as customer service personnel and human resource people if your company were to become that big.

Is everything making sense so far? If not, I’m sure that with just a little more reading, all the facts will fall into place.

Also, because of the huge size of the FOREX market, trading nearly $1.5 trillion dollars a day, such things as social events, bad publicity, and changes in political climate will have no effect on your business. In fact, after studying FOREX, you will be able to see how these things will actually benefit your FOREX home business.

The third and last classical business truth is that most people are prevented from starting a home-based business because they dont feel good enough about themselves. They dont feel like theyre educated enough. I read stories all of the time about people that feel passionate about something or they just pick something that they are relatively good at or have done before and start a business. They just take a chance. If you want to do it, step out. Take that first step. Dont drop any huge sums of money, of course, but do a little research, make a small investment and start your adventure down to the road to FOREX trading.

Best forex trading views

The 6 Best Forex Trading Systems are about to be released. Over 1,300 traders this time... New 6 Best Forex Trading Systems. As many of you know the one thing I recommend above anything else out there is access to the Surefire Trading Challenge club. It's the only real place for traders. Once you are in you will understand what I mean. The first thing you will want to get your hands on are the 6 best forex trading systems of the forex champions. That's what I did. These are just great. There are so many resources and tools inside that it's hard to think of anything else a trader would need. I want you to go along and watch this video. It will only take a couple of minutes and you will get a feel for what I'm talking about.



Let's get forex trading. 3 months ago, almost 600 Forex traders competed for one of the top 6 positions in the SureFire Trading Challenge...They all wanted to prove they had the best Forex system... the top 6 proved that they did! They proved that they could achieve results like 2,307% in just 30 days! The SureForex Trading Challenge organizers released those 6 top performing systems to the public for a short time and then closed the doors. Well... LISTEN UP! Over the past month, more than 1,300 traders from all over the globe (compared to 586 traders in the last competition) battled for the new first 6 places! Thats right - the SureFire Trading Challenge organizers sponsored a new competition and more than DOUBLE the previous number of traders joined it. You can see what I mean here:


I always knew that the true way to find the best Forex trading system was to let people prove it... unfortunately, no-one really took it upon themselves to organize such a competition. Things have changed, and not just that, they're getting better! In the first competition, the top traders shocked the world with their performance.In this new round, "shock" will be an underrated word (you just wait and see!)...

Average "Joes" Show Professional FX Traders What Trading's About!
You know the story... we all know it: The perception in the Forex industry is that you have to be a top-dog, experienced trader in order to nail exceptional performance results. But is that really the case? I think that by now we all know the honest answer. In the last SureFire Trading Challenge we saw people from all walks of life.. non-professional traders... in fact, PART TIME traders, outperformed the world's professional traders:

30 days trading (results verified): 2,307%...
30 days trading (results verified): 1,120%...
30 days trading (results verified): 1,014%...

Conclusion: you don't have to be a professional forex trader to quadruple your deposit on a monthly basis... you simply need the right systems! Take a look here to see what the competitors of the second round of the SureFire Trading Challenge have accomplished: Would you like to know why some traders seem to make more money than they could possible spend and others can't pay their rent? The ones who are making it big know stuff! They know thing most traders don't even know exist.



These secrets are passed down from one trader to the next. Normally it's through some kind of close personal relationship. There is however a small minority of people privileged and lucky enough to be part of a unique group of traders. And now you can too...This group of traders belong to the most respected, but also "THE" most profitable resource on earth for discovering extremely profitable ways to trade. Week after week, month after month, year after year this group of traders have been working to perfect their trading.



These Traders Have One Big Advantage
These traders all improved their trading by following the advice of other traders... no more and no less! This is how they did it:

Step 1 - They got access to some of the best trading systems that have ever been released.
Step 2 - They simply copied these systems.
Step 3 - They asked for advice and guidance from traders who were already using these systems.

Read this:
I'm in tears while writing this heart-felt thanks
for having such a wonderful site! Everything I had
imagined and dreamed of to come across so as to widen
my knowledge in Forex was a dream come true after I
became a member.

You are Great!! No one is better than you guys. Your
analytic work on your videos and trading systems are
second to none. I now believe I can fly! Thanks a
million!
Best Regards, Andy
Houston, Texas.

Rules for money management

As a currency trader, you should give utmost importance to proper money management in your trading. Most traders don't give much time to money management. They learn a few forex trading strategies and jump into live trading. After losing a good portion of their equity, they come back to money management. Don't do this.

Learn Trading Discipline
For you as a forex trader, the most important thing is to develop trading discipline in yourself. Discipline is the ability to plan your work and work your plan. You should give your trade the time to develop. You need not hastily take yourself out of the trade just because you are uncomfortable with the risk. Discipline is also the ability to continue to trade your system even after you have suffered a loss. All world class traders are highly disciplined in their trading.

Many traders become disappointed too soon when they don't achieve immediate success. Persistence is the most important quality a trader can possess. Those who quit too soon or apply their system haphazardly do not trade in the markets enough to allow their system to produce the wins they are looking for. To develop persistence, force yourself in the beginning to do everything to the rules of your trading system.

Follow Trading Rules
Learn to follow trading rules. The proper application of trades is one of the most important aspects of becoming a successful trader. It is also one of the most difficult to learn. The problem comes with the initial analysis of a market. When you study examples of past trades, it is much easier to recognize direction, entry, exits than if you are trading live. Recognizing opportunity in the now is much more difficult. Following trading rules and a trading system is no easy task. It requires discipline on the part of the trader to obey the rule that he/she is following even when the initial response or the opening trade does not work out. Trading rules are not perfect. They will fail you at times.

Learn To Accept Losses
You should learn to accept losses. Losses are going to happen in the course of trading. Since no trading system is 100% accurate. Even the flawless application of a trading system will create some losses. Develop the ability to admit your losses. Losses occur due to two reasons. The first is when the trader fails to follow the established and tested rules and guidelines of a trading system. The second is when the trading system fails to encompass unexpected changes in the market conditions.

Risk To Reward Ratio
You should always, always use stop losses in your trading. The idea behind the stop is to prevent a loss from running away too far. A stop is a market order placed a few pips away from the entry price in the event that price action turns and moves dramatically opposite from the anticipated direction. Many new traders think that a good entry into the markets for each trade is the key to success. Most are wrong, unfortunately. What is more important is trading with a good risk to reward ratio that has a high probability to making a profit. A risk to reward ratio compares the potential for reward with the potential for loss.

Risk is calculated by counting the pips between the forecasted entry price and the forecasted price at which you want to exit the market in case of a losing trade. A trader must view each trade as a business transaction. Reward is calculated by counting the number of pips between the forecasted entry price and the forecasted price at which you would want to exit the market in case of a winning trade. Reward is the expected number of pips that you want to make in a trade.

To manage risk properly, you need to look for high probability trades that have a risk to reward ratio of 1:2 or greater. This depends on the time frame that you want to trade. For example, if you are a day trader and you are looking for making only 30 pips in a trade, a stop loss of 15 pips is sufficient for the risk to reward ratio of 1:2. Suppose you are a swing trader or a position trader with a longer time frame. Your profit potential will be more on a longer time frame as compared to a shorter time frame. Suppose you are looking for 200 pips as your expected profit. For a risk to reward ratio of 1:2, you will need to set your stop loss at 100 pips.

The reason that you need to set a higher stop loss is that on a larger time frame, small trends occur within the larger trend. Retracements on shorter time frame is much smaller as compared on the larger time frame. Your trade is going to be recycled. In order to be not stopped out, you need to calculate your risk to reward ratio appropriately. Many traders agree that next to maximizing profits, the second most important thing for them is minimizing losses. A trading system that wins only 50% of the time on average can still be profitable. Most of the traders want to make money but dont know how to protect what they currently have.

You have 50% chance of the forex market going your way and 50% chance of going against you. It is just like flipping a coin. Suppose the trade does not develop in your favor and the market is going against you. You should cut your losses by using stop losses. In nutshell, you cut your losses and let your winners run. This simple 50/50 currency trading strategy earns a profit even when a novice trader might experience a loss. Consider different risk to reward ratios and how much you need to win to break even. For 2:1 risk to reward ratio, you need 67% winners just to break even. For a 1:1 risk to reward ratio, it means just 50% winners to break even. 1:2 ratio means only 33.5% winners. Never ever trade when the risk to reward ratio

Comparision of Forex and oil business

Wall Street analysts watch oil prices like hawks. During the early part of 2008, oil prices skyrocketed from near $75 to almost $140 within a few short months. This was more than a 100% increase in oil prices in a few months. All over the world, countries started feeling huge pressures on their balance of payment accounts. Many hedge fund managers heavily speculated on the increase in oil price. Some made a windfall, other lost when the oil prices suddenly collapsed.

Most of the increase in the oil prices was due to speculation. When the stock markets crashed, most of the hedge funds had to liquidate their investments in oil futures. The prices came down. The prices are down due to low consumer demand in a recession. But it is being predicted that with a recovery in the economy, the oil prices will go up again. As oil prices go up, consumers are forced to spend more on oil. The more they spend on oil, the less they can spend on other products. The less they spend on other products, the less profit companies make. Declining profits made by these companies mean declining stock prices.

The opposite case is also true; less the oil prices become, the more Wall Street becomes optimistic and exuberant about the profit potential of companies. This increased optimism and exuberance translates into a bullish stock market. Two large futures exchanges are used to determine the prices of crude oil. One is the New York Mercantile Exchange (NYME). The other is the International Petroleum Exchange (IPE). Historically, rising oil prices have been associated with falling stock markets. NYME is where most of the crude oil futures are traded.

By monitoring the movement of the crude oil futures in NYME, you can develop a feel of the future economic situation of the United States. Since oil is heavily traded in US Dollar, this affects the US Dollar. The net effect is however a bit complicated. Let's take a look at it more closely. When oil prices increase, the demand for US Dollar also increases as most of the countries need US Dollar to pay for their oil imports. Increased demand for US Dollar means that it should appreciate. But this is not the whole picture. Increased oil prices also affect the US economy. The question is which effect is more important for the currency markets.

The effect varies for different currency pairs. Suppose you are watching a currency pair that involves the USD and a currency representing a country that does well during the times of high oil prices. Take Canada that has huge oil reserves after Saudi Arabia. The effect would be depreciation in the value of USD/CAD pair. US imports more oil from Canada than any other country. And if you are watching a currency pair that involves USD and a currency whose economy is harmed by the rising oil prices, the demand for USD will rise.

So some currencies have positive correlation with oil prices and other currencies have negative correlation with rising oil prices. The currency pair CAD/JPY shows the strongest reaction to rising oil prices. Japan imports almost 100% oil. When oil prices are going to rise again, watch for CAD/JPY currency pair. CAD is positively correlated with oil prices and JPY is negatively correlated. So CAD/JPY has the strongest reaction to rise in oil prices. It can be a very good currency pair to trade during times of rising oil prices.

Following Oil Prices in Forex Trading
If you want to become a good investor in forex, then you need to learn that the currency markets evolve and change with time. As the forex markets evolve and change, your trading strategies should also evolve and adjust. You will need to make a little tweak here and a little tweak there sometimes in your trading strategies in order to continue making profit. There will be periods of low returns or losses. But once you have made the changes and adjusted your trading strategies, you will start making profits again. Dont get stuck with only one currency pair and one trading strategy. Start looking at macroeconomic events and how different currency pairs react to them.

Global economy runs on the supply of oil. You can say oil drives the global economy. High oil prices put pressures on the global economy. Inflation rises and fear of a recession starting mounts. Lets discuss a currency trading strategy. It depends on following oil prices in the global markets. Some countries export oil. There are many sources of oil. But most of the countries in the world import oil. So oil prices tend to affect almost all the currencies in the world. Some currency pairs react more strongly. Others currency pairs less so when oil prices change. When oil prices rise, they continue to rise for several months. Fortunately for you, oil prices tend to trend for months.

Similarly when oil prices decline, they tend to continue declining for several months. Some of the currencies that react strongly to oil price changes are GBP and CAD. Let's focus on USD/CAD. As United States imports more oil from Canada, the value of CAD should increase with increase in oil prices in relationship to USD. This means that the pair USD/CAD should start trending downward with the increase in oil prices. This is an example of a trend trade. Watch for times when the oil prices are rising and the exchange rate USD/CAD is decreasing. Similarly, watch for times when oil prices are declining and the exchange rate USD/CAD is increasing.

We will use CCI, Commodity Channel Index, to trigger the trade. Watch the 14 period CCI (Commodity Channel Index) chart. It should cross above 100 and then cross back below 100. This will tell you that the buyers made a temporary upward push on the currency pair USD/CAD but were unable to turn the trend around and it is still downward. This is time to open the trade. Enter the trade. Set a limit order of 300 pips and a stop loss order of 75 pips. Go short on USD and long on CAD. This setup gives you a risk to reward ratio of 1:4. This risk to reward is very good and it allows you to be wrong a few times but without ruining your chances of being profitable. 300 pips mean $3000 profit and 75 pips means $750 loss if the trade goes against what you anticipated. Usually such a trade will continue for a month.

You can also trade the USD/CAD currency pair in the opposite direction if the oil prices start to decline. However, prolonged downtrends in the oil prices are unlikely under rising global oil demand. This trading strategy depends on just knowing which way the oil prices are moving right now. You can take advantage of this oil price movement. Oil prices have again started to climb. It has reached above $68. Take advantage of the rising oil prices by trading USD/CAD pair as described above.

How to account the Forex

For trading success, good money management is the key. Many traders ignore this aspect of trading at their own peril and get their account blown in a few weeks of trading. Trading discipline means using a trading system based on money management rules that limit your risk and avoid making trading decisions based on emotions.

You need to have sufficient capital in your account if you want to make meaningful profits. One of the worst blunders that currency traders can make is to trade without sufficient capital. Low capital increases your chances of getting blown out too soon. This does not mean that you should have a lot of money before you start trading. It only means that you need to have enough capital in your account in order take advantage of the movements in the currency markets.

A trader with limited capital is always a worried traders always looking to minimize losses beyond the point of realistic trading. The minimum amount required to open a standard account with most forex brokers is $2000. You can start with $2000 but it is recommended by most of the professional traders that you should start with $5000-$10,000 to get good results.

Forex Standard Account
A standard account or a regular account (often also called 100k account), let's you trade a $100,000 standard lot with a $1000 deposit. This $1000 is kept as the margin by the broker. This is a 1% margin. Your account should have more than $1000 if you want to trade a $100k lot.

When you open an account with a forex broker, you must first determine what the default margin requirement is. You can change the account margin requirement to whatever you feel comfortable with. If you start with a 2% margin, it will cost you $2000 to trade one standard lot of $100,000.

Many brokers try to offer huge leverage to the new trades in order to entice them. You can get a leverage of 200% in most of the standard accounts. Using 200% leverage means trading $200,000 with a $1000 deposit. With this small deposit you are controlling a huge amount. Be careful! Dont use more than 4% leverage while trading in the beginning. Too much leverage is dangerous. With practice and more experience, you can increase the level of leverage in your trading. Its not that leverage is bad. Its just that you need to understand and learn how to use it. You can only do so with practice.

Forex Mini Accounts
Mini accounts are great for beginners. You can open a mini account with most of the brokers with a deposit of only $300. The mini account was developed to accommodate investors who were looking for bringing more diversification to their stocks portfolios. This small dollar requirement allows many small investors to participate in the forex markets. Many were previously unable to do so. Some brokers offer micro accounts as well. On a mini account, you have different lot sizes as compared to the standard account. One lot on a mini account means $10,000. You only need $50 to control a mini lot of $10,000. A pip size on the mini account is equal to $1 instead of $10 as on a standard lot.

If you lose 100 pips on a mini account, it means losing only $100. Losing 100 pips equal $1000 on a standard lot. A mini account reduces your risk by 10%. But it also reduces the profit that you can make by 10%. Start with at least $500 on a mini account. A mini account is a great way for new traders to practice forex trading. First develop the feel of how the forex markets work. Once you become an expert, trade on a standard account. Standard lot gives you the opportunity to make good ROI.

Forex Managed Account
A managed Forex trading account is fun and profitable. The idea is that you can watch the money grow that you deposit. This is good for people who want to hold a full time job, or don't want to sit in front of the computer. The one option that you can do if you want your money to work when you don't have to is the Managed Forex account. The principle is simple for a manage Forex account. You simply deposit your money and the account does the trades for you.

You will have a professional full time trader who is experienced in trading manage your money for you. This is true "Autopilot" The broker will decide what to buy and when to buy it. Alternatively, he will know what to sell and when to sell it. There are people who are turned onto this idea and like the ease of use. The money is still yours to control and through a simple interface on the website, or a phone call, and you can use all the money you have the way you want. People believe that they are better than the automated bots, since they can have a cognitive idea and see

If you want to get into a managed Forex account, just sign one up. You simply need to make sure it's one that right for you. If you put in the minimum deposit and try it out, you can see how it will work. Read the fine print and take into account the broker's fees. Some places will ask for a minimum deposit. That can range from $1,000 and higher. This is one of the other drawbacks to using managed Forex accounts. Be sure you are willing to commit when you sign up, and your using money you don't mind loosing. Forex is a liquid market and anything can and usually does happen.

How to choose good forex broker

Almost 90% of the investors enter currency markets as short term speculators. Most of the investors look for quick capital gains in forex. Many start forex day trading as a speculative venture. If you have made the positive decision to start forex trading, your first step should be choosing the right forex broker. This is very important. The right choice of a forex broker will greatly influence your success as a forex trader.

These days, the market is overcrowded with companies and banks offering online brokerage services to individual traders and investors to access the currency markets. It is not easy to make the right choice without a certain set of criteria. These criteria will mostly depend on the interests, preferences and means of each individual trader depending on his/her trading strategies and tactics. You may ask, what is the best way to choose the right broker? You should compose a list of questions to ask the forex broker before making a final decision. The following are some of the suggested questions that you should ask. You should ask these questions before making a final decision.

What is the amount of the interday and overnight margin? What is the corresponding leverage? Many online forex brokers offer margin between 2-5%. They provide leverage ranging from 20:1 to 100:1. Higher margin requirement means lower investment efficiency for you. Margin is the amount the broker sets aside as guarantee against your trading losses. However, beware of lower margin. It means that most of the time the forex broker will be against you as a trader and will do everything possible to prevent you from winning. You will face many trading problems with such a broker. It will become difficult for you to work under such conditions.

What is the minimum contract size offered? Now days, the standard contract size is a $100,000 lot. This contract size is quite affordable. This contract size also allows small individual investors to participate in currency speculation. It allows for reasonably effective money management with limited capital. What are the minimum deposit requirements demanded by the forex broker? It is not unusual that many new traders dont have sufficient funds to open an account. The investment and financial means of traders differ. $10,000 is the required minimum amount corresponding to the forex market conditions by good dealers. In my opinion, the optimal minimum amount is $10,000 with 2% margin requirement.

What are the terms of setting and executing stop and limit orders by the forex broker? The ideal condition should be the execution of the stop and limit orders at the fixed price. This should be regardless of the market conditions, its speed and its direction. Some forex brokers provide this type of execution. Other brokers reserve the right to fulfill an order with slippage under unsteady market conditions mostly defined by the broker themselves. The amount of slippage depends on the current state of the currency market. It can vary from a few pips to tens of pips. It is practically impossible to arbitrate the prices received from the broker during a currency transaction. The slippage creates favorable conditions for the abuse of an individual trader by the forex broker.

When choosing the right forex broker, you should find from the broker what are the spread size and its dependence on the contract size? Spread is the difference between the bid and the ask price given at any moment on the trading terminal. The smaller the spread size, the better it is for the trader. Spread is your cost of trading. Most forex brokers give spread up to 5 pips under steady market conditions. Spread up to 5 pips is reasonable and should be acceptable. Some brokers will offer spreads lower than 5 pips if you trade contracts of $500,000.

ECNs (Electronic Communications Networks) offer spreads of not more than 1-2 pips maximum. But they require initial deposit of $10,000. If you have $10,000, then its better to open an account with an ECN. The rates offered by ECNs are interbank and are far better than most of the retail forex brokers. You should look at the additional service like analytical, data, news, quotes, graphics and such offered by the forex broker. Online forex trading is quite popular now. You can monitor currency market movements by following current real time prices, graphics and even news on your laptop or PC monitor.

Does the broker provide trading software with the opportunity to manipulate, modify, and customize graphics; technical analysis using indicators and draw trend lines with support and resistance lines? This can save substantial money by eliminating the necessity of buying an expensive market quote service and analytical and charting software for conducting technical analysis. Does the broker charge commissions and other payments and dues? The most reputable forex dealers and forex brokers charge no transaction fees from their clients. Reputable dealers when transferring an open position to the following day execute the rollover operation in accordance with the current LIBOR rates. The rollover is reflected in your daily statement.

It depends on the currency pair and the direction in which the position was opened. At the moment of its transfer the next day, the client could actually win as the result of the transfer. A certain amount of interest would be added to his account just for holding the position for more than one day. This interest is the difference between the interests offered on the deposits on the two currencies in the pair. Sometimes a trader will hold two opposite positions overnight.

For example, a trader may have executed USD/CHF transaction for the total amount of $400,000 buy and $200,000 sell. Then the long position of USD/CHF amounting to $200,000 should be transferred to the next day and the corresponding interest deposited or charged to the traders account accordingly. Most forex brokers always charge the client interest for holding the position overnight regardless. They do not bother with these calculations. Many brokers will charge interest for practically non existent positions. You as a new trader should know these facts. You need to choose you dealer after due diligence.

Best forex tradings

Starting now... an arsenal of verified profitable 12 forex Trading systems at your disposal. Yes, the 2,307% in 30 days top position was OUT-PERFORMED! 3 months ago, 6 of the most profitable Forex systems were released to the public. I shouldn't need to expand on this but I'd just like to provide a small recap...Why do I say "6 most profitable"? Well... it's not opinion, it's FACT!


These 6 systems were the outcome of a real competition... a true fight for the #1 position. An independent challenge with verified results. That was then...Today it even gets better. Today you'll be able to have access to those 6 winnlng systems PLUS 6 more systems which are the result of the latest SureFire Forex Trading Challenge! How good are the new top 6 systems (as I said earlier, 2,307% was OUT-PERFORMED!) Now, and I need your complete attention here - I promise it'll be short! Over the past few months, a lot of people ask one simple question:

"Will I be able to replicate the results of the top champions of the SureFire Trading Challenge?"

I'll answer that in 2 parts:

1) Every single one of the traders who accomplished these results are PART-TIME traders... no professionals. These are people who proved to everybody that the only thing you need is a great system in order to achieve astounding results.

2) The SureFire members area is designed with one objective in mind: teach you these champion forex systems UNTIL you learn how to perfect them (which, for most of them, is as easy as ironing a shirt because of their mechanical nature) Every single benefit of the SureFire members area is explained here:


By the way, each of the benefits of the members area was explained in the video I told you recently too. If you haven't watched it then let me recap:

- Complete download of every system (PDF plus video format)
- Unconditional mentoring (until you learn the systems down to the last detail!)
- Unrestricted access to the inner circle forum (worth pure gold!)
- Fast and efficient client support
- New systems included after each new competition

...and much more! You can learn about every single trading system (12) in the member
area here: Two things are about to happen today:

One: Smart FX traders are going to appreciate that they have a rare chance to lay their hands on what are the 12 best Forex systems in existence.

Two: A SMALL portion of these traders will have the chance to not only lay their hands on systems even professional traders dream of...they'll also be able to automate these systems!



Yes, 3 months ago the SureFire Trading Challenge was launched. Almost 600 traders from all over the globe competed for a place in the top 6. Those 6 best (VERIFIED PERFORMANCE) systems of the challenge were released to the public:

2,307.78% in one month
1,120.77% in one month
1,014.05 in one month
927.93% in one month
200.12% in one month
156.23% in one month

...but then the doors closed and over 1,130 traders were left out. Today, the SureFire Trading Challenge opens its doors again, and BIG TIME! They've just finished their second competition where more than 1,300 traders fought for those coveted top 6 places. Results were astounding! 12 world-beating systems (over 1,800 competing traders combined!) are being released today and yes... once again, for a Iimited time.You can see details, performance info (verified), and a complete explanation here:


If you've been following my latest posts then you already know that the SureFire website is not just "another website". If there's ever been a service with the objective of getting you to be an unbelievably profitable trader, it's this one. You have my WORD on that. Forget about the B.S. hype you see on an everyday basis in this industry. Forget about empty promises. Forget about worthless information. My promise: The SureFire Trading challenge team WILL take you and turn you into a cash-spitting machine. How? Well, beyond the fact that you'll have access to the 12 most profitable forex systems in the world (PDF and video tutorials), you'll also:

- Be able to interact with the system developers (ask WHATEVER you want and need)
- Have access to the Surefire private inner-circle forum
- Count on weekly webinars and mentoring sessions
- Get immediate support on whatever aspect of trading you need
- Have access to new winnlng systems which result from each future competition

Video on Forex

Gold Prices As A Leading Indicator
The AUD, NZD, CAD and CHF all have strong correlation with the gold prices. Natural gold reserves and currency laws in these countries result in almost mirror like movements. The CAD also tends to move somewhat with the oil prices. However, the correlation is not that strong. Each one of these currencies has a correlation with gold and oil and the fundamental reasons of doing so.

Knowledge of the fundamental reasons behind these correlated movements between gold, oil and these currencies and their direction and strength could be a good method to discover trends in both the markets. There is a strong correlation between gold prices and US Dollar too. During times of geopolitical instability as well as when fears of global recession become strong, traders tend to shy away from Dollar and instead turn to gold as a safe haven for their investments.

Therefore, as Dollar depreciates, gold prices tend to appreciate as wary investors become afraid of losing their wealth. AUD/USD, NZD/USD and USD/CHF currency pairs tend to mirror gold movements. Generally speaking, gold prices are a leading indicator of currency prices. As such, commodity block traders monitor gold and oil prices to forecast movements in currency pairs. This knowledge can help forex traders to diversity their risk exposure using different products. The combination of gold and forex trading can be very profitable.

Follow Gold in Currency Trading
The old image of cranking up the printing press to increase money supply is outdated in the digital age. Now computer keystrokes can create dollars or euros or yen by the billions, and then move them around the globe at cyberspeed. But advances in technology and global finance have not changed the basic economic principle represented by the printing press: when central banks can churn out paper money at will, the value of this paper is highly suspect.

Paper money can be valued, of course. The question is, ‘Against what?’ It would seem that cash is losing its purchasing power at an accelerating rate against other assets because of expansionary monetary policies. You can print money, you can increase the supply of bonds, you can increase the supply of equities through new issues, but you simply cannot increase the supply of oil endlessly, nor of copper, nor of gold. Certainly not of gold.

Since 2000 gold and precious metals have significantly outperformed other financial assets. And the worse the economic and financial conditions of the United States and other countries become, the more value cash will lose against hard assets, which have now become the world’s ‘new money’. In an environment of monetary debasement – that is, when cash loses rapidly its purchasing power– all goods, services and assets become currencies. It is during these times that investors and savers realise that the only way to protect their purchasing power is to move away from paper assets.

Everyone wants to buy gold. Gold is the ultimate global currency. US Dollar used to be pegged to gold before 1973. But with the collapse of the Bretton Woods System that year, US Dollar was unpegged from gold. It became a freely floating currency. Free floating for a currency means the value of the currency is determined by the fundamentals of supply and demand. Now US Dollar is only backed by the full faith and credit of the US Government. Most of the currencies in the world are free floating now. Many countries are also purchasing gold in the open markets as a hedge of their foreign reserves most of which are in US Dollar. In the present financial crisis with the global economy in recession, many investors are trying to take refuge in gold as the ultimate safe haven of their wealth from financial turmoil.

The Australian Dollar is known for its strong correlation with gold prices. Most of this is due to the amount of gold that Australia produces and exports. US Dollar has an inverse relationship with gold prices. When gold prices rise, US Dollar falls in value. This causes the currency pair AUD/USD to rise in value. The opposite of this is also true. When USD gains value, gold usually loses value. The pair AUD/USD depreciates as a result. So when gold prices are rising, we can trade AUD/USD currency pair long. Likewise, when gold falls in value, we can trade AUD/USD short. This relationship may be due to the fact that gold is considered to be the ultimate safe haven of their wealth by investors in times of financial crisis. This relationship provides us with a method that we can use to take advantage of the fundamental factors that influence the currency markets.

Magical rising of Forex income

Moving averages are a very popular tool among the traders because they are a lagging indicator of the price action. Short and long term trends are easier to identify using moving averages. A moving average is an average of a predetermined number of prices such as the closing prices calculated over a number of periods like 50 candles. The higher the number of candles in the average, the smoother the line is.

Moving averages are calculated on the users specifications and can be formatted to different style of trading and time frames. For example, if you use a 90 time frame moving average, the prices of the last 90 times frames is added together and divided by 90. A moving average can be calculated based on the high, low, opening or closing price within a time frame. Since the closing price is the most important price, most traders prefer to use the closing price in calculating MAs.

There are three types of moving averages. First one is the Simple Moving Average (SMA). The second is Weighted Moving Average. The third is the Exponential Moving Average (EMA). The simple moving average as the name suggests is simply calculated by dividing the price in each time frame by the number of time frames. SMA is only a simple average. It is obtained by adding all the candles that you would like to measure. A weighted moving average gives more weight to the current prices as compared to the prices in the last few time frames.

In an exponentially smoothed moving average, the chart is calculated gradually with less emphasis on the prices in the latter time frames. Exponential moving averages are smoother as compared to the simple. EMA is obtained by exponentially smoothing the SMA. EMA pays more attention to newer candles. The EMA responds more quickly to price changes as compared to SMA. A moving average makes it easier to visualize price action without statistical noise. Instead of watching the up and down behavior of each candle, you are watching the relatively smooth moving average line.

Easy Forex Tranning

Know the Forex Training Secrets! Read every word of this post because it has big news for you if you trade Forex (or have always wanted to)...I just got my hands on Part 3 of Bill Poulos's new Forex training video series. This one is cool, and very unique. It shows a "live" recording of Bill trading during lunchtime using his new "Flexible Forex" method. See it here:


You'll see a live, intra-day chart of the Euro / US Dollar pair... HEADS UP - if you listen closely, you can even hear Bill eating his lunch. When you watch the video, put yourself in his shoes and imagine what it would be like. Then ask yourself if you can see yourself trading this way. I think you'll agree that it's pretty exciting. Ever since Bill released Part 1 of his new Forex video training, his office has been getting bombarded with emails asking things like:

* Is there a way to get more details on this method?
* Are you going to release more training?
* How can I get started?

Bill is going to reveal all the details of this method in a brand new home study course he calls: "The Forex Income Engine 2.0". He originally planned on releasing this in the Fall, but because of so many requests, he decided to move it up and plans on releasing the entire course...NEXT TUESDAY, JUNE 16th, at 10am Eastern time. I'll give you more info on Bill's new course as soon as I have it... but in the meantime, he's celebrating with something I think you'll love...Bill's going to give away the very first copy of the Forex Income Engine 2.0 to one lucky trader next week. For all the details on how to join the giveaway, just go the Video 3 page here:



...and follow the link in the lower-right corner of the page after you watch the video. It's not every day we get to sink our teeth into this much complimentary, juicy Forex content as well as participate in a big giveaway "on the house"... so I hope you are enjoying it as much as I am...This is what Bill says: " In the first video, I gave you a high level overview of how all the turmoil in the world right now is creating possible the best profit potential we've ever seen in the Forex markets and then I showed you the flexible method I discovered that let's you trade as little or as much as you want... WHENEVER you want. In Part 2, I "zoom in" and show you, step-by-step, how I quickly and easily spot trade setups...

* In all 6 major Forex pairs
* In any timeframe



Part of my discovery is the completely uncommon way I use 4 indicators... I'm not aware of anyone using them this way, and that's why it's so powerful. You'll also learn:

* Why you want to place your stop orders where you DON'T expect the market to go...
* How to get into a "free trade" situation ASAP with all your Forex trades... (this is probably one of the most awesome things you can do for your trading)
* How to handle losing trades like a pro...
* The kind of market you MUST avoid at all costs...
* My "super simple" risk management rules that even an 8th grader could understand and was inspired by ALBERT EINSTEIN...
* A "hands-on" overview of some excellent broker-supplied charting and trading software that makes Forex trading easier than ever...



Make sure you take notes on these videos, because I will likely be pulling them offline next week. I just want to get your quick feedback on them right now, so if you like what you see, please post a comment on my news site after you watch the videos. Since releasing my "Flexible Forex" training videos just a couple of days ago, the requests for my brand new "Forex Income Engine" 2.0 training course haven't stopped.

* My student support staff has been getting bombarded by emails all week long...
* My Forex Income Engine news site is closing in on 1,000 comments...
* Some traders have even phoned our office asking how they can get a copy of the new course now (even though it doesn't get released until next Tuesday, June 16th)...



Needless to say, the response to this new way of trading intra-day Forex pairs has been a bit overwhelming...but I'm excited that there's so much interest! So I recorded a new video that answers the Top 2 questions I've been receiving...

* What comes with the course?
* What's the price?

I'm working on some more surprise "goodies" that I'm going to release on Monday. I don't want to say too much yet, but I'm going to let you "peek under the hood" a little bit. Stay tuned for more soon. First of all, thanks for checking out my first two "Flexible Forex" 2.0 training videos this week. I hope you're finding them helpful.

I just posted a video that shows my "Flexible Forex" lunchtime trade. You'll see a live, intra-day chart of the Euro / US Dollar pair that I traded during lunch. (Sorry if you can hear me eating, but I wanted you to sense exactly what it can be like for you trading in this manner.) When you watch the video, put yourself in my shoes and imagine what it would be like. Then ask yourself if you can see yourself trading this way. I think you'll agree that it's pretty exciting."


These Forex Training Secrets Videos reveal how he and a small group of his students have been enjoying all the recent volatility in the Forex markets caused by otherwise "scary" market conditions elsewhere. So while other traders are "frozen" waiting for the markets to recover, some traders have been actively trading the Forex markets this way, day after day, completely ignoring the media's "doom and gloom" mantra. Want to see how? Watch the videos here:

These videos will be coming offline soon, so be sure to watch them and take notes before they disappear...). Now, while these videos by themselves have more content than a lot of reports you'd have to PAY for, Bill released them to "whet your appetite" to see if you might be right for his brand new Forex Income Engine 2.0 home study course. More details on this groundbreaking way to day trade the Forex markets have just been released in this new video where Bill reveals the answers to the top 2 questions he's been receiving since he released his new "Flexible Forex" 2.0 training videos. See the details here:

Forex trading from ATM

The forex market, offers a completely different investment asset class that offers leverage and virtually unrestricted access 24 hours a day. Forex trades virtually around the clock from the Asian market open on Sunday night until the U.S. market close on Friday afternoon. The forex markets are situated all around the world. Currency trading is a global activity. Every country in the world uses money and needs to change that money into other currencies in order to trade or interact with other nations.

One of the attractions from an individual trader’s perspective is that there is this constant access to make a trade. In other words, in every transaction, a trader is long one currency and short the other. A position is expressed in terms of the first currency in the pair. For this reason, currencies are always traded in pairs; for example, if you have purchased euro and sold U.S. dollars, it would be stated as a euro/dollar pair. With a volume of over $3 trillion daily, the forex market is the largest and most liquid financial market in the world—more than three times the aggregate amount of the U.S. equity and Treasury markets combined. This means that a trader can enter or exit the market at will in almost any market condition with minimal execution risk.

Due to the sheer size of liquidity, a continuous supply-and-demand driven product (we all use and need money), and the accessibility of trading make many professional traders consider the forex market like a bank’s automatic teller machine (ATM). The forex market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Unlike other financial markets, the forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations, and individuals, trading one currency for another. The lack of a physical exchange enables the forex market to operate on a 24-hour basis, spanning from one zone to another across the major financial centers.

Currency exchange happens at every level of society. As an individual, you may have changed money when traveling on business or on vacaation. Or maybe you have sold something on eBay to somebody in another country. Their payment comes in to your account in their own currency, and the bank or other payment processor such as PayPal changes it for you. That is currency exchange at the root level.

Foreign exchange or forex trading has a different purpose, however. When you are trading on the foreign exchange markets you are not buying another currency because you need it. You are buying it in the hope that it will rise in value, so you can change it back and end up with more money than you started out with. Of course, it is risky. The price movement could go against you and then you would end up with less money instead of more. So you will want to gather plenty of information about currency trading before you start.

Forex trading began in the 1970s when the major currencies were deregulated so that their values were no longer fixed. The banks and large investors quickly saw the potential for making money from the changing prices. The main forex marketplaces are the big financial centers of the world. London sees the highest activity with New York second and Tokyo third. Other major players are Sydney, Zurich and Frankfurt. Originally you had to be in one of those places to trade money, or at least have a telephone connection with a broker who was there. It was very difficult for somebody who was not on the spot to act fast enough to react to the sudden fluctuations in price that can happen in the forex markets.

But modern advances in technology have changed all of that. Since the rise of the internet it has been possible to trade on your own account from anywhere. This means that it has become easier and easier for the little guy to get a piece of the action. The forex market hours stretch from Monday morning in Sydney, Australia to Friday afternoon in New York. During that time the market is open somewhere around the globe at all hours of the day or night. However it is not a 24/7 market because it does shut down on weekends. 24/5 would be more accurate.

If you need to know the exact times that the markets open and close, you have to take time zones into consideration. It is very simple when expressed in UTC. This is Universal Coordinated Time, formerly known as Greenwich Mean Time. This is the standard (winter) time in Greenwich, London which is the point of zero longitude on the globe.

So, the normal forex market hours are 22.00 Sunday UTC to 22.00 Friday UTC. This is 10 pm in the UK in winter time. New York is 5 hours behind the UK so the global forex market opens and closes at 5 pm Sunday/Friday in New York, 2 pm on the US west coast, 11 pm in Germany, 8 am Monday/Saturday in Sydney. Things get a little complicated when you start to try to take summer time daylight saving into account. This makes one hour difference in countries that observe it. But daylight saving operates in a different way in the southern hemisphere countries such as Australia which have summer time from September to March instead of March to September. The hours of the different major national markets are as follows:

Sydney: 10 pm to 7 am UTC
Tokyo: 12 midnight to 9 am UTC
London: 8 am to 5 pm UTC
New York: 1 pm to 10 pm UTC
Or we can express that in EST (Eastern US time):
Sydney: 5 pm to 2 am EST
Tokyo: 7 pm to 4 am EST
London: 3 am to 12 noon EST
New York: 8 am to 5 pm EST

You can see that these correspond to 24 hour cover. However, this does not necessarily mean that trading will be good at all of these times. Just after a major market opens, the prices can be very volatile and unpredictable. Many traders will stay out of the forex market for up to an hour four times a day when the financial markets are waking up in these major cities.

The US dollar is the most traded currency by a long way, involved in 2.5 times as many trades as its nearest rival the euro. This means that events in the USA have a greater impact on the financial markets than events in other countries. The New York market tends to slow down around 3 pm local time (8 pm UTC) and if you are involved in a US dollar pair, this can be a good time to stop trading for the day.

So theoretically you can trade 24 hours a day from Sunday night to Friday night. Automated software in the form of a forex robot can even make this physically possible. However, a cautious trader will choose his times and will not be active during all of the forex market hours. While some people never think about foreign currency from one overseas trip to the next, others are studying charts and financial information to make money from the rising and falling prices with the aim of becoming financially free by trading on the foreign exchange markets.

Analysis of Forex Income Engine 2.0

This step-by-step home study course from 30+ year trader Bill Poulos is a multi-media powerhouse that reveals the quickest & most flexible way to achieve INDEPENDENCE in the Forex markets & shield yourself from risk...ESPECIALLY if you're inexperienced & have little time. In just about a week, the initial # of courses Bill set aside for his new students quickly sold out, and for good reason:



Those lucky individuals who claimed their copy before it expired figured out that now is one of the best times ever to trade Forex because of the huge volatility being created by the weakened global economies. The profit potential right now is awesome. Now that the initial wave of new student inquiries has settled down a bit, Bill has decided to take on a few more new students but only through Thursday, July 2nd, 2009, at 11:59pm Eastern (New York time). To celebrate his 35th year trading the markets, he's going to let in only 35 more fast-acting individuals...and remember: The doors close on July 2nd...So, if you have ANY interest in getting in on what I think many traders will end up calling THE Forex event of 2009, go here to see if any copies are still available:

Be sure to read this post as it gives you access to a brand new Forex method that 'flip flops' the approach most people take...and shows you how select groups of traders can get in on the huge volatility in the Forex markets RIGHT NOW that's being created by the problems in the other global markets) Here's what's up...



In the past weeks, nearly 40,000 traders got exclusive access to 30+ trader Bill Poulos's complimentary 3-part "Flexible Forex" 2.0 training videos...these videos revealed his recent Forex discovery that shows you how to manage risk first when placing a trade, and THEN look for a profit as quickly as possible (and as many times a day as possible) all according to YOUR schedule. So if you have any interest in discovering how to finally become an INDEPENDENT trader in the Forex markets, where you always know what to do, no matter what happens... keep reading and GET READY...



A TURNING POINT IN FOREX TRADING?
Bill was planning on releasing his new course in the Fall, but due to extreme interest from the Forex trading community, he put all his other projects on hold in order to release it this week. Based on the early feedback he's been receiving from those lucky enough to see a preview copy, it looks like this may be a turning point in Forex trading. Why? Because Bill does everything in his power to give you the "keys to the kingdom" where you understand EXACTLY what to do when you go to place a trade. There's never any second guessing or wondering.



CAUTION: This is NOT for "systems junkies", or individuals who like to let others make their trading decisions. But it IS for traders who like to have FULL CONTROL of their destiny in the markets.

IT'S ALL ABOUT YOU
Bill designed this new method with YOU and YOUR schedule in mind. It's all about giving you the flexibility you need in your busy day to trade in as little as 20 minutes... or even all day long if that's what you have time for...but he's only planning on releasing a limited amount of courses in the next weeks that show you how to find trade setups quickly, protect your position with a sort of "risk shield", and then look for profit as fast as possible so you can move on to the next trade. So if you want to...



* Triple your profit potential by simultaneously looking at the short, intermediate, and longer-term trends and then automatically using the dominant trend to virtually ensure your edge and give you the best chance for a successful trade...

* Get started quickly and place your first trade with as little as a $500 trading account when you use "mini lots"...

* Trade in as little as 20 minutes, or all day long, by customizing your daily trading plan with the timeframes of your choice to fit your changing schedule...

* Enjoy frequent and fast trades from start to finish by quickly identifying only the highest-probability, lowest-risk trades...

* Practically "rub out" account-crippling losses by using simple yet profoundly powerful risk management rules. It's like having a Forex "Risk Shield" so you're protected at all times...

* Become an independent trader and stop relying on so-called gurus, black box systems, or other gimmicks. Be totally confident when you know what to do every time, no matter what happens in the markets...

...then check out the open letter Bill wrote for you that describes all the details:


I've seen this developer's trading courses disappear in a matter of days in the past, and it's a near certainty it will happen again... so IF YOU VALUE YOUR TIME, I really urge you to check out his letter here, and then ask yourself how what he has to say stacks up against how YOU currently trade:



This is what Bills says about his Forex Income Engine 2.0 course: We just finished up a GREAT 1.5 hour webinar for the Forex Income Engine 2.0. I hope you were lucky enough to be on. I think it was one of the best we've done. I revealed some of the actual strategies I teach in my new course, we gave away 3 more copies, and answered some very insightful questions. It wouldn't surprise me if your Forex trading improved JUST by watching this webinar.


As of this writing we have around 10 copies left of FIE 2.0. I know that we had a problem earlier in the week with double orders, and our fulfillment center accidentally shipped out a few extra copies, so that number may change a little..however, the inventory is dwindling, so if you want a copy, come and get it.

If I sell out before Tuesday, which is when I had planned on closing down my FIE 2.0 website, I'm not sure what I'll do yet. This is selling out MUCH faster than I anticipated, which means there was a LOT more demand that I expected... so, I'm going to sleep on it for now and see what the numbers look like later. Anyway, I hope you enjoy the replay! When you watch the webinar, you'll see we announced some KILLER bonus items at the end that we said would expire TONIGHT. Well, a few folks on the webinar asked if I could hold the bonuses for them if they order TOMORROW, so just to be fair to everybody, I'm extending the bonuses until 11:59pm on Friday. See them here:



Last week my brand new, step-by-step Forex Income Engine 2.0 home study course came off the market.

* 950 lucky traders got their hands on it, and are already placing trades using my 3 complementary methods that show them EXACTLY how to spot as much "pip potential" as they can handle, again and again. It's awesome!

Over the weekend, my support desk got slammed with dozens of requests from folks who missed the cut-off deadline last Tuesday night asking if they could get a copy of the course. Like I said last week, I can only handle so many new students, so I can't really let another 950 copies go right now. However, because the initial "rush" of support questions has quieted down a bit, here's what I'm going to do.

From now until Thursday, July 2nd, at 11:59pm Eastern, I'm going to release 35 more copies to celebrate my 35th year trading the markets. After that, I don't know when I'll release more. It could be a long time. All I know is that I want to focus on my new group of charter students and help to turn them into superstar Forex traders. Join us here:



Ever since the Forex Income Engine 2.0 began to arrive at traders' doorsteps last week, I've been receiving LOTS of great feedback. Here are just a few comments I got over the past few days:

----

"OH MY GOD!

I've bought all of Bill's Course's - FPA, FIE & FIE 2.0 This one has got me really excited. THANK YOU BILL!

And another OH MY GOD - How fantastic is the Pip Reinforcer...it's exactly what we need out here. A teacher every day going through it with us. SO GREAT!

...Luvin the FIE 2.0 - It's exactly what we need to hammer through these crazy markets. Thanks Bill! Keep 'em comin' - Yee Hah"

--Z.C., Australia


"It goes naturally that I am very-very-very pleased with what I am getting from your course as this is finally the real course I was seeking, and the fantastically simple right information to understand and succeed in this business! I have been 'looking' and trading demo accounts since 2001 without great success and stability, every time due to a huge-big information overload, way too much data and chart indicators following traditional methods that do not work and that always ended up confusing me. And I then stopped for a month but always was looking for simple systems or methods, and I must say: Bill, you got it perfectly! I am very pleased and impressed by your simplicity in explaining it!Well, again Bill, thank you very much for your course, it is a GREAT one! What a relief, I finally can go into this market!"

Knowledge on Mechanical Trading

Currency traders use different approaches in their trading. Some use discrete trading system and others use mechanical trading systems. Majority of successful traders use self developed mechanical trading systems that they developed themselves. There are always advantages and disadvantages of different trading systems. The majority of unsuccessful traders depend on discrete trading method that depends on their experience and technical knowledge.

Many traders develop their own trading systems. There are many actively developed trading systems also known as Expert Advisors or Robots for sale. Theses robots are basically computer programs that are based on some mechanical trading system. It can vary widely in prices. The prices can be from a few hundred dollars to a few hundred thousand dollars. The significant advantage of these computer programs is that they generate signals. These signals can be used by the trader for trading. Sometimes these computer programs are developed for a certain bank or a corporation.

The discrete trading method is used by many traders. They depend on their experience and instincts in trading. It is like an artist trying to adapt to different market conditions and using flexibility and tactics corresponding to the particular market condition. In case of a discrete trading method, the trader’s mood and health can greatly affect the outcome of each trade. The main disadvantage of the discrete trading approach is due to the stress factor influencing the trader, the unstable trade results.

A mechanical trading system prevents the trader from quick adjustment of trade tactics and strategies under changing market conditions. However, it almost completely removes the influences of the stress factor. It also reduces the negative pressure on a trader which is obviously a big plus. There are eight requirements that any ideal trading systems should fulfill. A mechanical trading system also doesn’t allow the quick customization of the trading system in cases like the change of the account size. These conditions are:

1. A good trading system should allow to any trader for the maximum adjustment according to his/her psychological character and makeup.

2. The trading system should depend on trading methods that are universal. It should not depend on a particular market condition at any moment of time.

3. It should be simple and logical. It should depend on understandable ready to use elements and units.

4. The trading system should provide specific price signals for the trader for entry and exit positions some time in advance.

5. The trading system must allow some room for the trader’s creativity. He/she should have the ability to tweak the system.

6. Without violating its main principles and elements of the trading system, there should be some flexibility to modernize. The trading system should adjust in accordance with the changing market conditions.

7. The trading system should relieve the trader from emotions. It should remove psychological stress in trading and should be ruled based that do not depend on emotions.

8. It should be customizable. Different traders can use the same method with different account sizes and different risk/reward appetites.

A previously effective trade system could lead to negative results from change of market conditions. No one trading system can fulfill all these requirements. Trade systems based on these requirements could be complex and adjustable. The only way of satisfying these conditions is through developing a diversified trading system. It can consist of a set of systems. These systems can be used as the basis for specific trade tactics at any given moment.

Kelly Ratio
There are many factors to consider while testing and evaluating a mechanical trading system. The important question is how to develop a trading system, evaluate it and then apply it with real money. We need to not only know that the trading system is profitable for each trading system that we test. But we should also know whether it is profitable with limited equity swings. We should know does the trading system have excessive drawdown periods? Three of the most important elements of mechanical trading systems are:

1) Rules for exiting at profit targets.
2) Rules for exiting at loss targets or how much loss is permissible and
3) Clear cut rules for entry and exit for each trade.

Do losses exceed gains more than what is tolerable in the long run? Does the trading system experience periods of time that result in significant losses that give back those gains when a string of multiple winners and substantial profits accrue? John Kelly while working at AT&T Bell Labs had developed the formula in 1956 now known by his name. A money management tool used by system traders is the Kelly Formula or Ratio. Most traders do not know when to correctly add on a trading position.

Gamblers realized its potential as an optimal betting system in horse racing. It soon became popular with the gamblers. This formula enabled gamblers to maximize the size of their bets on consecutive races. Gamblers would use the Kelly Formula to determine how much to parlay winnings into the next bet. Kelly Formula is used by many traders to determine how much money to place on the next trade taking into account the historical performance of the trading system.

Kelly Ratio is given by the formula: K=W-[(1-W)/R] where K is the Kelly Ratio in percentage. W is the winning probability and it is the probability that any given trade that you make will return a positive amount. R is the Win/Loss Ratio and it is the total positive trade amounts divided by the total negative trade amount. Suppose K is 25% then you can risk 25% of your account on each trade. Kelly Ratio tells you what you should ideally be willing to risk on each trade to maximize your total returns in terms of the percent of your total account.

To be on the safe side you should half the ratio. Suppose K is 25%. You should half it to 12.5%. What it means is that you should not risk more than 12.5% of your account on a single trade. Many traders argue that the Kelly Formula gives too high a figure so half it to be on the safe side. You can use it in deciding which trading system is better in the long run. Kelly Formula can help you in comparing two trading systems. You should look for a trading system that has the highest Kelly Ratio.

Sucess rate of Forex

Yesterday's experiments with creating an expert advisor to scalp the 5 minute chart show great profits and great risk.

I've been working to reduce the level of risk without taking away the reasonable chance of making reasonable profits.

Here is the most recent chart:


This is running from 01-Feb-2009 to 25-Apr-2009 and obviously surviving any ups and downs during that period.

I'm still not happy with the relative size of the larger draw downs. I believe I can tune it but I'll want to add back aggressiveness or the growth will start to drop more than I'd like.

... continuing ...

Alright, I'm in danger of curve fitting, but I've tuned the advisor to take less risk and earn less profit. However, right now, the earnings curve is getting near ideal. The draw down is acceptable and the profits are around $4,000 per month. Of course, remember that this is all somewhat theoretical and running in a test environment.


The question on my mind is whether or not I can somehow turn up profits without creating larger draw down. It's not easy but I'll fool around some more and see where I end up.

... continuing ...

Increasing aggressiveness did not help. Various other modifications were also unsuccessful.

I've run this starting 01-Nov-2008 and it dies a horrible death. This is not surprising, but it does imply you'd need to know when things were going horribly and stop it. If you are able to manually ascertain that the market should only be moving upwards then this EA should do okay. It only opens long positions.

Gridding Microtrades view on Forex

I've been thinking about grid based strategies designed to take advantage of volatility without incurring great risk.

The idea is that the strategy be followed using a carry trade pair in the event that you do inevitably end up holding some positions. You'll want a platform with a decent spread. Oanda often has about a 3.0 pip spread on the AUDJPY pair -- my current pair of choice.

So, let's start with these parameters:

• Every 20 pips have a limit order with a take profit of 20 pips.
• Each order is for 125 units (not lots).

What does this mean? It means that we will earn approximately a penny per pip of movement. It also means that a sustained downturn will accumulate positions at a very slow rate.

Note: I'll be throwing around numbers very loosely, if you want to consider this type of strategy seriously you'll want to account for spreads and other issues very accurately.

However, as I'm sure you can imagine, not all currency moves are for 23 pips or more. There are a lot of small moves that would be contained within a 20 pip range. There are a lot of moves that would rise and fall above the purchase price without being sold for a profit. This is missed opportunity.

You can easily calculate your risk... just assume a straight fall to some absolute low with a position acquired every N pips. Don't forget to account for the losses as purchases at higher levels will be suffering losses as well. How much capital do you need to sustain all of that?

What if you placed limit orders every ten pips and maintained a 20 point take profit stance? You'd double the theoretical maximum at risk and earn 2 cents per pip (over larger distances) if you kept the position sizes the same. It get's interesting when you decrease the size of the positions to reduce risk. Once you do that you can increase the density of your positions.

The interesting question is how much movement can you profit from as you increase position density, to catch smaller moves, given the spread on the pair you are trading? How many pips can you catch in a day without being in danger of accumulating more than you can handle in a downturn?

Practical risk reduction steps could be taken...

• You could place limit orders above the current price to avoid buying positions on the way down.
• You might also decide to trade only during periods that certain conditions are met.
• You might stop trading if you accumulated a large net position
• You should eventually make some profits which has the result of increasing your capital and adding to your total risk capacity.

This again gets interesting. If you assume you stop accumulating positions at a safe point you could easily recapitalize your account to start trading again within a lower range. While you trade with this new capital, within safe limits, you'll have a carry trade position which should have a reasonable average price in the bigger picture measured in months and years.

FOREX WITH MINIMUM MONEY

As I often do, especially when the markets are excruciatingly slow in determining when to make the next significant move, I've been thinking about Forex.

Take a mental walk with me...

The DOW falls from 10,000 to 5,0000 and loses 50% of it's value. It returns from 5,000 to 10,000 and gains 100% of it's value.

Wait, think about that for a minute. In the normal world having the ability to gain double digit gains, per year, is considered excellent.

If you are confident that an upward cycle will eventually happen, in a suitable time frame of course, then movement is valuable. If you aren't trading on margin, and you don't have the associated risk, then you can afford to look at each dip in price as an opportunity.

While this may be applicable to the DOW, it is ever more applicable to the Forex markets. If you are trading with little or no margin it's simply a matter of scaling your entry and exit based on price moves. This is very similar to the gridding concept that I posted recently.

However, when the margin is gone the risk is gone. You choose the price range you expect and scale your entry and exit points within it. If you must, you leave some positions in place while you recapitalize to attack another range. In fact, perhaps you simply allocate a set number of dollars per thousand pip trading range. If the price falls into a lower range you simple ante up and play within a lower range -- while your higher range positions provide interest income.

However, keep in mind, it's possible that currency pairs adjust interest rate differential. This could erode or reverse the suitability of holding a pair over a long period of time.

VIDEO ANALYSIS OF FOREX

I've become a little frustrated with most of news sources out there. If you've been an active forex trader for any length of time you'll notice that talking heads are always trying to tell you why something happened.

That's really nice, and might possibly help you learn about various financial interactions, but it's absolutely useless from a trading point of view. If you are trading you need to figure out what's going to happen -- not what just happened. Check out this video (complete with atrociously low audio levels).
This type of analysis is unlikely to help you with your fx trading tomorrow. Generally, how the markets will move tomorrow, based on tomorrow's news, is not something you'll get from any of the gurus and talking heads.

On the other hand useful analysis will be too slow to be meaningful. For example, I'm very confident the world economy will eventually recover. When that happens we'll have a period of high interest rates as rising commodity prices drive inflation. Guess what? This will mean that carry trades pairs will end up at much higher prices. Unfortunately, I can't tell you when the world is going to focus on this. Generally, not before the money moves from wherever it is to wherever it is finally going to end up.

The closest thing to predictive analysis, or something you can really use to drive your forex trades, is technical analysis. Charting. Something which gets very little respect in some circles. Many people don't understand it and many others discount it because it isn't able to make perfectly accurate predictions. Technical analysis does not have to be a perfect tool for prediction. It merely has to increase the odds that your fx positions end up earning you a profit.

RATE OF FOREX BUSINESS

While I don't have any pictures to show, yet, I am working on an EA that trades AUDJPY based on the market price relative to the average price of positions held.

The first few passes at this type of system were pitiful. My testing starts from September of last year to now while only opening long positions. As you can imagine this is a difficult period of time for a long only system!

However, late last night I was able to complete a test that showed profits.

The strategy behind this EA is basically as follows:

* If you've just seen a recent downward movement open an initial position.
* If the price is high enough above or below your average order open price, open another.
* If the current price is above your average price close your lowest and most profitable position.
* Try not to open any position while in a downward movement regardless of the above rules.

Obviously, the last item mentioned is not simple, but it is the key to account survival. If you open too many positions and the market falls too far you will get a margin call.

As ever, I'm basically using the AUDJPY for this. I am interested in strategies that can accumulate a safe quantity of long positions such that they pay me to wait for the eventual upturn.

I'll provide updates once/if I'm able to get appropriate results.

TIPS FOR FOREX

The AUDJPY currency pair is currently trading around the 76.00 mark.

Over the last twenty days, from May 7 through May 27, I've been experimenting with a concept I've been calling microtrading.

I don't intend to close all of my positions at the moment, but if I did my account NAV would increase by more than 10% over that period.

While I realize that active trading can return spectacular results compared to a paltry 10% it does require a lot more effort and time. Personally, my full time job and other issues have my complete attention. I don't have the luxury of time or the mindset to take larger risks at the moment.

Anyway, open up your trading platform and I'll walk you through the process of trading this strategy.

1) On May 10 we topped out around 76.00 on the AUDJPY pair.

2) Based on my account size I could safely open long positions for every fall of 20 pips. This isn't the goal but it is the maximum density of trades I'd allow.

3) As the price of this currency pair dropped to around 70.50 on May 15 I would accumulate positions based on the previous point. Basically, when you see what looks like a support point or if the price moved down a lot while you were at work or sleeping, then you open another micro trade.

4) When any one trade has more than 200% profit with respect to margin committed and you believe you are at a resistance point, consider unloading it.

5) Be patient when the market moves sideways. In terms of serious monetary strategies a week or a month is not a long period of time. Keep in mind that you are trading a carry trade pair so you will be paid to wait.

6) I firmly believe that eventually the AUDJPY pair will recover strongly. I'm willing to hold positions for long periods of time as I wait for this. If you don't believe this or you aren't willing to wait, then this strategy may not be useful for you.

Using the above method, with almost zero stress except for impatience during several weeks of sluggish movements, my trading account never committed more than 6% of it's NAV (using 50:1 leverage which is the maximum at my fx broker -- Oanda). However, this morning, as I've stated above, I could close out all my positions at a 10% NAV gain.

This is a simple trading system, though purists may balk at calling it a "system" due to its loose definition. Wait for a drop and buy tiny positions. Capture large profits when they present themselves. Be patient and don't accumulate too large a portion of your NAV. I'd definitely recommend using Oanda due to the ability to trade any size positions and the fact that you can't trade with extreme leverage.