0 Some Proven Forex Strategies

In order to become a confident Forex trader one needs to know various Forex strategies. Learning about these various strategies is not only about going deep into Forex education and trading knowledge, but also about learning how to trade to become a full time Forex trader. Ultimately the strategies help the trader identify profitable trading approaches and apply them to his own trades.

If you have still not understood the importance of Forex education then read on to know why even professionals suggest that all traders should undergo some training. Once you realize the importance of the basic and advanced Forex strategies, you'll realize how simple it is really is to make money consistently.

If you are a beginner and don't know where to start from, here are some easy to understand strategies that are sure to help you.

Sample Strategies For Forex Trading

· Strategy 1: Simple moving average: Successful trading is all about reducing the risk against the reward expected. The same applies to this strategy. This strategy is a disciplined way of reducing risk as well as making most out of the encouraging market scenario. This strategy is based on a 12-period SMA model where each period is of 15 minutes. The strategy works by using a simple algorithm. Here a signal to buy is received when the price of the currency crosses above the 12 period simple moving averages. The strategy helps a short position get recognized, and the longer position can be cashed upon. This strategy helps the trader always remain in the market.

· Strategy 2: Forex trading training also uses another widely known strategy that deals with the support and resistance levels. The concept here is that the Forex market would tend to trade whenever the trade is either above the support levels or below the resistance levels. This means that if the resistance level breaks down, the entire market would follow the same route.

The above mentioned Forex strategies are simple examples of technical analysis applied to Forex trading. These two strategies also have a risk control element built-in in them. A trader is suggested to make use of as many such proven strategies as possible. Proper research and the use of various strategies used by professional traders can take you a long way.

Why Do Strategies Help One Win?

Once you start working around proven Forex strategies you are sure to emerge a winner because:

You'll have an edge over others.
The use of tried and tested strategies would reduce your indecisiveness and fear.
You would be able to read entry setups as well as end moves before other do.
Strategies would help you read and understand the market better.
You'll learn to exit and make profits before the opportunity vanishes.
Last but not the least; you would be able to implement the strategies to make profits without having to install costly software and trading systems.


To sum up, once you learn to use the various Forex strategies to your advantage, you'll realize that making money in the Forex market is actually no big deal at all.
Amin Sadaks is the leader in Forex education. Learn more about his Forex training experience at http://www.forexcommander.com.

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0 7 Keys To Choosing A Good Forex Trading System

Forex Trading Systems: 

So you want to choose a good forex system, one that will be worth your time and effort learning how to trade? 

Well, there are a couple of key points to keep clearly in mind, even before you go out hunting for a system to learn. 

Firstly, realize that some systems perform better or are more consistent than others. Yes, it's true that this in itself is in the eye of the beholder, as everyone is different. But say you're comparing two daily systems, and they're very similar in time required to trade it, but the first has better profitability and better consistency, with a smaller draw down, then for most people, the first is a system that may be more attractive. 

The second point to consider is that systems differ vastly in the amount of time that's required to trade it. Some systems are take less time to trade, while some require you to be at the screen several times a day, or more. This is a question therefore about what suits your lifestyle. 

What we're looking for is a currency trading system that's profitable enough - and this is different for everybody, that has an acceptable draw down, and that actually fits into our daily routine! 

This is important, as when any of these factors are not there, we'll find ourselves unable, or unwilling trade the system. 

By the time you've read this article, you'll know how to choose a forex system that's worth the time and effort to learn as prosper from! 

So here are the 7 power points when checking out a forex system or training course that you've found: 

1. The profitability of the system. 

This is shown as either pips per month, or when assuming a certain float amount, the dollar amounts per month. 

These profit figures are often quoted in pips per month, as it's one way of comparing trading systems, despite the fact that people are trading different trade sizes. 

However, when looking at pip profit figures, just be aware that if you assume a fixed risk model, that the average face value that people will trade with any given float, will depend on the average risk per trade. This in turn, depends on the average stop loss distance for that system. But the stop loss distance is not often quoted. 

As an example, say you want to trade with a 2% fixed risk model. If the average risk per trade in the first system is say 30 pips, and in the second system is 60 pips, then the average face value would be twice the size in the first system for any given float. If both systems produce the same average pip profit per trade, say 100 pips, the first system will, in terms of dollar amounts, produce the higher profit. 

If on the other hand, we're assuming a fixed dollar risk model, then the amounts you put in will depend on the size of the float. 

2. The maximum draw down either historical or based on real trading. 

The maximum historical draw down of a system is the largest decrease in equity that has happened in the past during back testing or real time trading of the system. 

When comparing draw down between systems, you can either look at pips, or if using a assumed float, look at the dollar value. Then with this dollar value, express it as a percentage of the cash float used. For example, if the maximum historical draw down was $6000 based on a $10 000 cash float, then the draw down is 60%, expressed as a percentage of the cash float. 

As well as using this draw down figure to compare systems, you can also use it to figure out the amount of funds you'd need to start trading the system. 

In the example we just mentioned, you'd need at least $16 000 in the beginning ideally, to trade the system. That is $10 000 float plus backup of $6000. This is in case a drawdown occurs when you first start trading, not months or years after you start. It's wise to be prudent and to have backup. 

3. What's the win loss ratio of the system? 

The “win-loss” ratio of the system, is the percentage of winning trades compared to losing trades. A high win-loss ratio is a bonus, in that the system may be psychologically easier to trade. 

But more ultimately, you need to look at both the win loss and profit loss ratio, which we come to now… 

4. The “profit-loss” ratio of the system. 

The “profit-loss” ratio is the average size of winning trades compared to losing trades. 

A high ratio means that the system is pretty robust. And this is a strength. 

So if the “profit-loss” ratio multiplied by the “win-loss” ratio is greater than one, then you're on the right track, that is, the system is profitable. You'd want this ratio to be 2 or 3 or more, not just bordering on one, which means that the system is profitable with a good edge. 

5. The consistency of the Forex system, by month and by year. 

If you can find a profitable system, with a reasonable draw down, and is very consistent, then that's great. Look at the monthly, quarterly and yearly results to best tell this. 

Some people won't mind a slightly higher draw down and less consistency, if the profitability was much higher. However, others depending on their circumstances and personality may want consistency more than profitability, to an extent. There's a different sweet spot for everybody! What's your sweet spot? 

6. How much time do you need to trade the system each day? 

Some forex systems require about 15 minutes a day to trade, and these are usually daily systems. And others need a few hours per day to achieve similar returns. 

On a slightly different note, some forex systems trade the major economic announcements. In these systems of course, you know exactly when you need to be at the computer. Do you want to be a day trader, or do you prefer to trade a short time a day and then focus your day on other businesses? 

7. Is the system quite systematic, quite discretionary, or a combination of the two? 

A mostly mechanical system is an advantage in that they're teachable and learnable. There's less need to learn discretionary skills that come from real-time paper and live trading, although it's rarer to find systems that are 100% mechanical. 

For example, when putting in your support and resistance lines, does the course give you clear rules so that your lines, and therefore your trading decisions will be close to that of the person that's teaching you, or the mentor that developed the system. 

Even better, do they have weekly examples of how they draw their lines to fine tune your drawing of these lines? 

So when checking out a forex course, keep these points in mind. 

And have some practice looking at various forex strategies for yourself so you get familiar with what's around. 
You want a system that was worth learning and trading, not one that causes frustration! 

Now you have some tools under your belt to help you properly look at forex systems.

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