Author: A. Pablo
Source: articledashboard.com
One of the most important characteristics of the Forex markets is that they have the largest volume of trades per day among all the capital markets you can opt to trade. This characteristic along with it's high, Stock Day Trading, leverage and around the clock trading schedule makes Forex a very attractive activity with a huge profitability potential.The forex markets have an additional characteristic that makes them "easy" to trade compared, Stock Day Trading, to other markets. Very often they develop strong trends that seem to follow a repetitive pattern in all the different time, Stock Day Trading, frames you can use to analyze the market conditions.Ralph Nelson Elliot observed this patterns and after analyzing a great number of charts he discovered in the late 1920's that the, Stock Day Trading, markets move in a repetitive manner that is too far from being a simple chaotic behavior. He discovered that the markets move in cycles and that they reflect the mass psychology of the active elements participating in them, with characteristic "waves", Stock Day Trading, representing this active elements psychology in their daily encounters with the markets.Elliot not only discovered the repetitive nature of the markets cycles represented by the waves but he also realized that this patterns had a fractal nature. This means that the patterns not only repeated with time but that in a given fixed period of time the characteristic wave pattern would repeat at different time scales (days, hours, minutes).The Elliot wave pattern is divided into, Stock Day Trading, five constitutive waves: the first of the waves is called the impulsive wave. The fractal nature if this waves was evident to Elliot when he observed that in every impulsive wave he analyzed, when observed at a smaller time scale he would find the characteristic five waves of the pattern he had found and if he now looked at the impulsive wave of the smaller impulsive waves in an even smaller scale, Stock Day Trading, he would find again, Stock Day Trading, five ways, etc. Elliot waves are very important in Forex trading because considering the repetitive nature of this patterns you can make a pretty accurate forecast of what the markets will do next giving you a huge advantage over other forex traders without this great trading tool.
Saturday, October 3, 2009
Thursday, October 1, 2009
The Six Sure-fire Ways To Fail Trading Commodities, Part 5
Author: Thomas Cathey
Source: articledashboard.com
Actual trading events where things went very wrong - and, Stock Day Trading, how to avoid them The Six Sure-Fire Ways to Fail Trading Commodities:5) Load Up With Everything You Have in Your AccountWe've all read the same stuff about commodity trading money management...about how we should only risk 5-10% of our account one any single trading idea, etc. Much of the trading folklore is false, but this one idea is the truth.During the last 2006 gold commodity market run up, I sometimes chatted with commodity futures brokers about the anonymous results of their clients who traded their own accounts. No names, just results. There was one futures and option trader who stood out. He was right, Stock Day Trading, about the gold market. He hated buying way out-of-the-money inflated options on futures (for good reason) and stayed with futures contracts only, Stock Day Trading, . He was a brave soul who had about $100,000 to work with and held maybe 5 futures contracts for the long haul. As gold futures moved from the $500/oz area toward $650, he was making a good score. I was proud hearing of his ability to sit through the corrections and add more on the dips. He was up to about, Stock Day Trading, 12 futures contracts. His protective stops were down maybe 25 full points away from the action. His stops were safe at the time because the volatility was mild. His was a textbook campaign so far.Then came the day when the gold futures market took its first sharp dip and stopped him out. He made about $60,000 on the trade, but was angry he got stopped out. The gold market took off again to the upside. He lost his discipline and started buying breakouts. Gold futures contracts went into a nasty chopping range for a month as he bought futures most days and got stopped out for losses. He was livid. He then started buying larger and larger lots and moving his stops farther away. The market always figures a way to screw the majority at any one time and continued to take him out. In short order he gave back the $60K profit and some of his principal.This was his second warning to stop and pull, Stock Day Trading, the plug on himself, but he didn't get the message. The gold market had changed from a trending market to a chop. Finally he decided to change his tactics and join'em in the chop game. He started buying 20-lot futures in the middle of the night with stop loss orders a few dollars away. This wasn't his game and he lost again, dropping another $50K, Stock Day Trading, . The market started to trend up again as he added more new money to his account to buy the breakouts. The days were running out for this gold bull leg. Gold future contracts were sometimes having daily swings of $50. It was totally Jaws V.Then he decided he needed to buy gold call options to survive this intra-day and overnight volatility. He loaded up on strikes at 900 and 1000, far out-of-the-money. At about this time gold futures contracts finally made their top at over $700/oz as he correctly forecast in the beginning. He would have been up over $120K just by sitting tight. Since that time, gold futures have declined sharply into the low $530 range, Stock Day Trading, . His option account eroded to worthless. While holding call options, he had gotten stubborn and decided the market would not boot him out, no matter what. Does this sound familiar?What can we learn from this? He started out well, but unfortunately made a multitude of errors in the end. He had a fixed scenario, lost his discipline, traded too large for his account and bought far out-of-the-money, Stock Day Trading, gold options that were inflated in value. It's sad, really. The saddest part is that he was correct on the direction of the gold futures market! He KNEW gold was going up and had started buying futures contracts in the lower $500/oz zone. He was right as rain for several months and was doing fine. But the market changed from a trending, to a chopping, then finally to a bearish, Stock Day Trading, decline. This is quite normal in normal markets. Remember, Stock Day Trading, to always trade for a normal market! He was always looking for a classic gold-bug blow-off scenario. Sure it will happen again someday, but not often enough to risk money on it every time.SOLUTION:, Stock Day Trading, The moral of this story is back to our 5%-10% money management rule. ALL the bad things in this tale could have been greatly softened if he risked only 10% or less on any one trading idea. He would still be trading. It's no crime to get sloppy and lose our discipline. We are human and will always have trading issues. But an all-or-nothing attitude will sink us every time. (Read some of my lessons on "Win-Loss Ratios and Risk")Part Six of Seven Parts - Next!There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.
Source: articledashboard.com
Actual trading events where things went very wrong - and, Stock Day Trading, how to avoid them The Six Sure-Fire Ways to Fail Trading Commodities:5) Load Up With Everything You Have in Your AccountWe've all read the same stuff about commodity trading money management...about how we should only risk 5-10% of our account one any single trading idea, etc. Much of the trading folklore is false, but this one idea is the truth.During the last 2006 gold commodity market run up, I sometimes chatted with commodity futures brokers about the anonymous results of their clients who traded their own accounts. No names, just results. There was one futures and option trader who stood out. He was right, Stock Day Trading, about the gold market. He hated buying way out-of-the-money inflated options on futures (for good reason) and stayed with futures contracts only, Stock Day Trading, . He was a brave soul who had about $100,000 to work with and held maybe 5 futures contracts for the long haul. As gold futures moved from the $500/oz area toward $650, he was making a good score. I was proud hearing of his ability to sit through the corrections and add more on the dips. He was up to about, Stock Day Trading, 12 futures contracts. His protective stops were down maybe 25 full points away from the action. His stops were safe at the time because the volatility was mild. His was a textbook campaign so far.Then came the day when the gold futures market took its first sharp dip and stopped him out. He made about $60,000 on the trade, but was angry he got stopped out. The gold market took off again to the upside. He lost his discipline and started buying breakouts. Gold futures contracts went into a nasty chopping range for a month as he bought futures most days and got stopped out for losses. He was livid. He then started buying larger and larger lots and moving his stops farther away. The market always figures a way to screw the majority at any one time and continued to take him out. In short order he gave back the $60K profit and some of his principal.This was his second warning to stop and pull, Stock Day Trading, the plug on himself, but he didn't get the message. The gold market had changed from a trending market to a chop. Finally he decided to change his tactics and join'em in the chop game. He started buying 20-lot futures in the middle of the night with stop loss orders a few dollars away. This wasn't his game and he lost again, dropping another $50K, Stock Day Trading, . The market started to trend up again as he added more new money to his account to buy the breakouts. The days were running out for this gold bull leg. Gold future contracts were sometimes having daily swings of $50. It was totally Jaws V.Then he decided he needed to buy gold call options to survive this intra-day and overnight volatility. He loaded up on strikes at 900 and 1000, far out-of-the-money. At about this time gold futures contracts finally made their top at over $700/oz as he correctly forecast in the beginning. He would have been up over $120K just by sitting tight. Since that time, gold futures have declined sharply into the low $530 range, Stock Day Trading, . His option account eroded to worthless. While holding call options, he had gotten stubborn and decided the market would not boot him out, no matter what. Does this sound familiar?What can we learn from this? He started out well, but unfortunately made a multitude of errors in the end. He had a fixed scenario, lost his discipline, traded too large for his account and bought far out-of-the-money, Stock Day Trading, gold options that were inflated in value. It's sad, really. The saddest part is that he was correct on the direction of the gold futures market! He KNEW gold was going up and had started buying futures contracts in the lower $500/oz zone. He was right as rain for several months and was doing fine. But the market changed from a trending, to a chopping, then finally to a bearish, Stock Day Trading, decline. This is quite normal in normal markets. Remember, Stock Day Trading, to always trade for a normal market! He was always looking for a classic gold-bug blow-off scenario. Sure it will happen again someday, but not often enough to risk money on it every time.SOLUTION:, Stock Day Trading, The moral of this story is back to our 5%-10% money management rule. ALL the bad things in this tale could have been greatly softened if he risked only 10% or less on any one trading idea. He would still be trading. It's no crime to get sloppy and lose our discipline. We are human and will always have trading issues. But an all-or-nothing attitude will sink us every time. (Read some of my lessons on "Win-Loss Ratios and Risk")Part Six of Seven Parts - Next!There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.
Wednesday, September 30, 2009
Forex Trading Tips
Author: John Gaines
Source: articleage.com
Why do hundreds of thousands online traders and investors trade the forex market every day, and how do they make money doing it?This two-part report clearly and simply details essential tips on how to avoid typical pitfalls and start making more money in your forex trading. Trade pairs, not currencies - Like any relationship, you have to know both sides. Success or failure in forex trading depends upon being right about both currencies and how they impact one another, not just one.Knowledge is Power - When starting out trading forex online, it is essential that you understand the basics of this market if you want to make the most of your investments. The main forex influencer is global news and events. For example, say an ECB statement is released on European interest rates which typically will cause a flurry of activity. Most newcomers react violently to news like this and close, Stock Day Trading, their positions and subsequently miss out on some of the best trading opportunities by waiting until the market calms down. The potential in the forex market is in the volatility, not in its tranquility.Unambitious trading, Stock Day Trading, - Many new traders will place very tight orders in order to take very small profits. This is not a sustainable approach because although you may be profitable in the short run (if you are lucky), you risk losing in the longer term as you have to recover the difference between the bid and the ask price before you can make any, Stock Day Trading, profit and this is much more difficult when you make small trades than when you make larger ones. Over-cautious trading - Like the trader who tries to take small incremental profits all the time, the trader who places tight, Stock Day Trading, stop losses with a retail forex broker is doomed. As we stated above, you have to give your position a fair chance to demonstrate its ability to produce. If you don't place, Stock Day Trading, reasonable stop losses that allow your trade to do so, you will always end up undercutting yourself and losing a small piece of your deposit with every trade.Independence - If you are new to forex, you will either decide to trade your own money or to have a broker trade it for you. So far, so good. But your risk of losing increases exponentially if you either, Stock Day Trading, of these two things:Interfere with what your broker is doing on your behalf (as his strategy might require a long gestation, Stock Day Trading, period);Seek advice from too many sources - multiple input will only result in multiple losses. Take a position, ride with it and then analyse the outcome - by yourself, for yourself. Tiny margins - Margin trading is one of the biggest advantages in trading, Stock Day Trading, forex as it allows you to trade amounts far larger than the total of your deposits. However, it can also be dangerous to novice traders as it can appeal to the greed factor that destroys many forex traders. The best guideline is to increase your leverage in line with your experience and success. No strategy, Stock Day Trading, - The aim of making money is not a trading strategy. A strategy is your map for how you plan to make money. Your strategy details the approach you are going to take, which currencies you are going to trade and how you will manage your risk. Without a strategy, you may become one of the 90% of new traders that lose their money.Trading Off-Peak Hours - Professional FX traders, option traders, and hedge funds posses a huge advantage over small retail traders during off-peak hours (between 2200 CET and 1000 CET) as they can hedge their positions and move them around when there is far small trade volume is going through (meaning their risk is smaller). The best advice for trading during off peak hours is simple - don't.The only way is up/down - When the market is on its way up, the market, Stock Day Trading, is on its way up. When the market is going down, the market is going down. That's it. There are many systems which analyse past trends, but none that can accurately predict the future. But if you acknowledge to yourself that all that is happening at any time is that the market is simply moving, you'll be amazed at how hard it is to blame anyone else. Trade on the news - Most of the really big market moves occur around news time. Trading volume is high and the moves are significant; this means there is no better time to trade than when news is released. This is when the big players adjust their positions and prices change resulting in a serious currency flow.Exiting Trades - If you place a trade and it's not working out for you, get out. Don't compound your mistake by staying in and hoping for a reversal. If you're in a winning trade, don't talk yourself out of the position because you're bored or want to relieve stress; stress is a natural part of trading; get used to it.Don't trade too short-term - If you are aiming to make less than 20 points profit, don't undertake the trade. The spread you are trading on will make the odds against you far too high.Don't be smart - The most successful traders I know keep their trading simple. They don't analyse all day or research historical trends and track web logs and their results are excellent.Tops and Bottoms - There are no real "bargains" in trading foreign exchange. Trade in the direction the price is going in and you're results will be almost guaranteed to improve.Ignoring the technicals- Understanding whether the market is over-extended long or short is a key indicator of price action. Spikes occur in the market when it is moving all one way.Emotional Trading - Without that all-important strategy, you're trades essentially are thoughts only and thoughts are emotions and a very poor foundation for trading. When most of us are upset and emotional, we don't tend to make the wisest decisions. Don't let your emotions sway you.Confidence - Confidence comes from successful trading. If you lose money early in your trading career it's very difficult to regain it; the trick is not to go off half-cocked; learn the business before you trade. Remember, knowledge is power.The second and final part of this report clearly and simply details more essential tips on how to avoid the pitfalls and start making more money in your forex trading.Take it like a man - If you decide to ride a loss, you are simply displaying stupidity and cowardice. It takes guts to accept your loss and wait, Stock Day Trading, for tomorrow to try again. Sticking to a bad position ruins lots of traders - permanently. Try, Stock Day Trading, to remember that the market often behaves illogically, so don't get commit to any one trade; it's just a trade. One good trade will not make you a trading success; it's ongoing regular performance over months and years that makes a good trader.Focus - Fantasising about possible profits and then "spending" them before, Stock Day Trading, you have realised them is no good. Focus on your current position(s) and place reasonable stop losses at the time you do the trade. Then sit back and enjoy the ride - you have no real control from now on, the market will do what it wants to do.Don't trust demos - Demo trading often causes new traders to learn bad habits. These bad habits, which can be very dangerous in the long run, come about because you are playing with virtual, Stock Day Trading, money. Once you know how your broker's system works, start trading small amounts and only take the risk you can afford to win or lose.Stick to the strategy - When you make money on a well thought-out strategic trade, don't go and lose half of it next time on a fancy; stick to your strategy and invest profits on the next trade that matches your long-term goals.Trade today - Most successful day traders are highly focused on what's happening in the short-term, not what may happen over the next month. If you're trading with 40 to 60-point stops focus on what's happening today as, Stock Day Trading, the market will probably move too quickly to consider the long-term future. However, the long-term trends are not unimportant; they will not always help you though if you're trading intraday.The clues are in the details - The bottom line on your account balance doesn't tell the whole story. Consider individual trade details; analyse your losses and the telling losing streaks. Generally, traders that make money without suffering significant daily losses have the best chance of sustaining positive performance in the long term.Simulated Results - Be very careful and wary about infamous "black box" systems. These so-called trading signal systems do not often explain exactly how the trade signals they generate are produced. Typically, these systems only show their track record of extraordinary results - historical results. Successfully predicting future trade scenarios is altogether more complex. The high-speed algorithmic capabilities of these systems provide significant retrospective trading systems, not ones which will help you trade effectively in the future. Get to know one cross at a time - Each currency pair is unique, and has a unique way of moving in the marketplace. The forces which cause the pair to move up and down are individual to each cross, so study them and learn from your experience and apply your learning to one cross at a time. Risk Reward - If you put a 20 point stop and a 50 point profit your chances of winning are probably about 1-3 against you. In fact, given the spread you're trading on, it's more likely to be 1-4. Play the odds the market gives you. Trading for Wrong Reasons - Don't trade if you are bored, unsure or reacting on a whim. The reason that you are bored in the first place is probably because there is no trade to make in the first place. If you are unsure, it's probably because you can't see the trade to make, so don't make one. Zen Trading- Even when you have taken a position in the markets, you should try and think as you would if you hadn't taken one. This level of detachment is essential if you want to retain your clarity of mind and avoid succumbing to emotional impulses and therefore increasing the likelihood of incurring losses. To achieve this, you need to cultivate a calm and relaxed outlook. Trade in brief periods of no more than a few hours at a time and accept that once the trade has been made, it's out of your hands. Determination - Once you have decided to place a trade, stick to it and let it run its course. This means that if your stop loss is close to being triggered, let it trigger. If you move your stop midway through a trade's life, you are more than likely to suffer worse moves against you. Your determination must be show itself when you acknowledge that you got it wrong, so get out. Short-term Moving Average Crossovers - This is one of the most dangerous trade scenarios for non professional traders. When the short-term moving average crosses the longer-term moving average it only means that the average price in the short run is equal to the average price in the longer run. This is neither a bullish nor bearish indication, so don't fall into the trap of believing it is one.Stochastic - Another dangerous scenario. When it first, Stock Day Trading, signals an exhausted condition that's when the big spike in the "exhausted" currency cross tends to occur. My advice is to buy on the first sign of an overbought cross and then sell on the first sign of an oversold one, Stock Day Trading, . This approach means that you'll be with the trend and have successfully identified a positive move that still has some way to go. So if percentage K and percentage D are both crossing 80, then buy! (This is the same on sell side, where you sell at 20). One cross is all that counts - EURUSD seems to be trading higher, so you buy GBPUSD because it appears not to have moved yet. This is dangerous. Focus on one cross at a time - if EURUSD looks good to you, then just buy EURUSD. Wrong Broker - A lot of FOREX brokers are in business only to make money from yours. Read forums, blogs and chats around, Stock Day Trading, the net to get an unbiased opinion before you choose your broker. Too bullish - Trading statistics show that 90% of most traders will fail at some point. Being too bullish about your trading aptitude can be fatal to your long-term success. You can always learn more about trading the markets, even if you are currently successful in your trades. Stay modest, and keep your eyes open for new ideas and bad habits you might be falling in to.Interpret forex news yourself - Learn to read the source documents of forex news and events - don't rely on the interpretations of news media or others. John Gaines online trading, currency trading, financial serviceA veteran of online trading, John Gaines offers the financial services industry his perspectives and expertise on a variety of trading systems and financial instruments, including forex, CFDs, futures, options and stocks.
Source: articleage.com
Why do hundreds of thousands online traders and investors trade the forex market every day, and how do they make money doing it?This two-part report clearly and simply details essential tips on how to avoid typical pitfalls and start making more money in your forex trading. Trade pairs, not currencies - Like any relationship, you have to know both sides. Success or failure in forex trading depends upon being right about both currencies and how they impact one another, not just one.Knowledge is Power - When starting out trading forex online, it is essential that you understand the basics of this market if you want to make the most of your investments. The main forex influencer is global news and events. For example, say an ECB statement is released on European interest rates which typically will cause a flurry of activity. Most newcomers react violently to news like this and close, Stock Day Trading, their positions and subsequently miss out on some of the best trading opportunities by waiting until the market calms down. The potential in the forex market is in the volatility, not in its tranquility.Unambitious trading, Stock Day Trading, - Many new traders will place very tight orders in order to take very small profits. This is not a sustainable approach because although you may be profitable in the short run (if you are lucky), you risk losing in the longer term as you have to recover the difference between the bid and the ask price before you can make any, Stock Day Trading, profit and this is much more difficult when you make small trades than when you make larger ones. Over-cautious trading - Like the trader who tries to take small incremental profits all the time, the trader who places tight, Stock Day Trading, stop losses with a retail forex broker is doomed. As we stated above, you have to give your position a fair chance to demonstrate its ability to produce. If you don't place, Stock Day Trading, reasonable stop losses that allow your trade to do so, you will always end up undercutting yourself and losing a small piece of your deposit with every trade.Independence - If you are new to forex, you will either decide to trade your own money or to have a broker trade it for you. So far, so good. But your risk of losing increases exponentially if you either, Stock Day Trading, of these two things:Interfere with what your broker is doing on your behalf (as his strategy might require a long gestation, Stock Day Trading, period);Seek advice from too many sources - multiple input will only result in multiple losses. Take a position, ride with it and then analyse the outcome - by yourself, for yourself. Tiny margins - Margin trading is one of the biggest advantages in trading, Stock Day Trading, forex as it allows you to trade amounts far larger than the total of your deposits. However, it can also be dangerous to novice traders as it can appeal to the greed factor that destroys many forex traders. The best guideline is to increase your leverage in line with your experience and success. No strategy, Stock Day Trading, - The aim of making money is not a trading strategy. A strategy is your map for how you plan to make money. Your strategy details the approach you are going to take, which currencies you are going to trade and how you will manage your risk. Without a strategy, you may become one of the 90% of new traders that lose their money.Trading Off-Peak Hours - Professional FX traders, option traders, and hedge funds posses a huge advantage over small retail traders during off-peak hours (between 2200 CET and 1000 CET) as they can hedge their positions and move them around when there is far small trade volume is going through (meaning their risk is smaller). The best advice for trading during off peak hours is simple - don't.The only way is up/down - When the market is on its way up, the market, Stock Day Trading, is on its way up. When the market is going down, the market is going down. That's it. There are many systems which analyse past trends, but none that can accurately predict the future. But if you acknowledge to yourself that all that is happening at any time is that the market is simply moving, you'll be amazed at how hard it is to blame anyone else. Trade on the news - Most of the really big market moves occur around news time. Trading volume is high and the moves are significant; this means there is no better time to trade than when news is released. This is when the big players adjust their positions and prices change resulting in a serious currency flow.Exiting Trades - If you place a trade and it's not working out for you, get out. Don't compound your mistake by staying in and hoping for a reversal. If you're in a winning trade, don't talk yourself out of the position because you're bored or want to relieve stress; stress is a natural part of trading; get used to it.Don't trade too short-term - If you are aiming to make less than 20 points profit, don't undertake the trade. The spread you are trading on will make the odds against you far too high.Don't be smart - The most successful traders I know keep their trading simple. They don't analyse all day or research historical trends and track web logs and their results are excellent.Tops and Bottoms - There are no real "bargains" in trading foreign exchange. Trade in the direction the price is going in and you're results will be almost guaranteed to improve.Ignoring the technicals- Understanding whether the market is over-extended long or short is a key indicator of price action. Spikes occur in the market when it is moving all one way.Emotional Trading - Without that all-important strategy, you're trades essentially are thoughts only and thoughts are emotions and a very poor foundation for trading. When most of us are upset and emotional, we don't tend to make the wisest decisions. Don't let your emotions sway you.Confidence - Confidence comes from successful trading. If you lose money early in your trading career it's very difficult to regain it; the trick is not to go off half-cocked; learn the business before you trade. Remember, knowledge is power.The second and final part of this report clearly and simply details more essential tips on how to avoid the pitfalls and start making more money in your forex trading.Take it like a man - If you decide to ride a loss, you are simply displaying stupidity and cowardice. It takes guts to accept your loss and wait, Stock Day Trading, for tomorrow to try again. Sticking to a bad position ruins lots of traders - permanently. Try, Stock Day Trading, to remember that the market often behaves illogically, so don't get commit to any one trade; it's just a trade. One good trade will not make you a trading success; it's ongoing regular performance over months and years that makes a good trader.Focus - Fantasising about possible profits and then "spending" them before, Stock Day Trading, you have realised them is no good. Focus on your current position(s) and place reasonable stop losses at the time you do the trade. Then sit back and enjoy the ride - you have no real control from now on, the market will do what it wants to do.Don't trust demos - Demo trading often causes new traders to learn bad habits. These bad habits, which can be very dangerous in the long run, come about because you are playing with virtual, Stock Day Trading, money. Once you know how your broker's system works, start trading small amounts and only take the risk you can afford to win or lose.Stick to the strategy - When you make money on a well thought-out strategic trade, don't go and lose half of it next time on a fancy; stick to your strategy and invest profits on the next trade that matches your long-term goals.Trade today - Most successful day traders are highly focused on what's happening in the short-term, not what may happen over the next month. If you're trading with 40 to 60-point stops focus on what's happening today as, Stock Day Trading, the market will probably move too quickly to consider the long-term future. However, the long-term trends are not unimportant; they will not always help you though if you're trading intraday.The clues are in the details - The bottom line on your account balance doesn't tell the whole story. Consider individual trade details; analyse your losses and the telling losing streaks. Generally, traders that make money without suffering significant daily losses have the best chance of sustaining positive performance in the long term.Simulated Results - Be very careful and wary about infamous "black box" systems. These so-called trading signal systems do not often explain exactly how the trade signals they generate are produced. Typically, these systems only show their track record of extraordinary results - historical results. Successfully predicting future trade scenarios is altogether more complex. The high-speed algorithmic capabilities of these systems provide significant retrospective trading systems, not ones which will help you trade effectively in the future. Get to know one cross at a time - Each currency pair is unique, and has a unique way of moving in the marketplace. The forces which cause the pair to move up and down are individual to each cross, so study them and learn from your experience and apply your learning to one cross at a time. Risk Reward - If you put a 20 point stop and a 50 point profit your chances of winning are probably about 1-3 against you. In fact, given the spread you're trading on, it's more likely to be 1-4. Play the odds the market gives you. Trading for Wrong Reasons - Don't trade if you are bored, unsure or reacting on a whim. The reason that you are bored in the first place is probably because there is no trade to make in the first place. If you are unsure, it's probably because you can't see the trade to make, so don't make one. Zen Trading- Even when you have taken a position in the markets, you should try and think as you would if you hadn't taken one. This level of detachment is essential if you want to retain your clarity of mind and avoid succumbing to emotional impulses and therefore increasing the likelihood of incurring losses. To achieve this, you need to cultivate a calm and relaxed outlook. Trade in brief periods of no more than a few hours at a time and accept that once the trade has been made, it's out of your hands. Determination - Once you have decided to place a trade, stick to it and let it run its course. This means that if your stop loss is close to being triggered, let it trigger. If you move your stop midway through a trade's life, you are more than likely to suffer worse moves against you. Your determination must be show itself when you acknowledge that you got it wrong, so get out. Short-term Moving Average Crossovers - This is one of the most dangerous trade scenarios for non professional traders. When the short-term moving average crosses the longer-term moving average it only means that the average price in the short run is equal to the average price in the longer run. This is neither a bullish nor bearish indication, so don't fall into the trap of believing it is one.Stochastic - Another dangerous scenario. When it first, Stock Day Trading, signals an exhausted condition that's when the big spike in the "exhausted" currency cross tends to occur. My advice is to buy on the first sign of an overbought cross and then sell on the first sign of an oversold one, Stock Day Trading, . This approach means that you'll be with the trend and have successfully identified a positive move that still has some way to go. So if percentage K and percentage D are both crossing 80, then buy! (This is the same on sell side, where you sell at 20). One cross is all that counts - EURUSD seems to be trading higher, so you buy GBPUSD because it appears not to have moved yet. This is dangerous. Focus on one cross at a time - if EURUSD looks good to you, then just buy EURUSD. Wrong Broker - A lot of FOREX brokers are in business only to make money from yours. Read forums, blogs and chats around, Stock Day Trading, the net to get an unbiased opinion before you choose your broker. Too bullish - Trading statistics show that 90% of most traders will fail at some point. Being too bullish about your trading aptitude can be fatal to your long-term success. You can always learn more about trading the markets, even if you are currently successful in your trades. Stay modest, and keep your eyes open for new ideas and bad habits you might be falling in to.Interpret forex news yourself - Learn to read the source documents of forex news and events - don't rely on the interpretations of news media or others. John Gaines online trading, currency trading, financial serviceA veteran of online trading, John Gaines offers the financial services industry his perspectives and expertise on a variety of trading systems and financial instruments, including forex, CFDs, futures, options and stocks.
Tuesday, September 29, 2009
Trading In Black And White Forex Trading Newsletter - 3/30/06
Author: Eddie Yakubovich
Source: articleage.com
So, hopefully, you have been keeping up with my looks back on the Forex markets. Forex trading, like any other skill, can be improved with research and education.That being said, the greatest asset for research is hindsight. Remember, in Forex trading, history tends to repeat itself. It is this fact that we will try to exploit in our looks back at Forex trading.So far, we have focused only on Cable, which is a nickname for the currency pair - British Pound / US Dollar. The, Stock Day Trading, symbol for cable is usually represented as GBP/USD.In our technical analysis, we use time frames ranging from weekly to hourly. This way, we have a good outlook on the trend in the both the long and, Stock Day Trading, short term.Remember, this article was written well before you are actually reading it. Use this information as a tool only. By the time you read this, our support and resistance levels will have changed.Do not attempt to use this information as trading advice in any way whatsoever.I look forward to hearing your thoughts and comments.OK, let's get to the trading.Cable appears to moving once again. I really feel good to have a daily range well over 100 pips that was not directly driven by news. We fell short of getting in our trades last night, there just was no real bounce before the down move.The 1.7440 level only really had two reasons to take it, and was only 14 pips, Stock Day Trading, away from the close of the previous days trading close. That's just a, Stock Day Trading, little too aggressive especially with the volatility starting to increase.The 1.7440 level is now much more important as we add a last nights high to the growing list of reasons to take it. Cable has turned outlook consolidative first but upside should be limited by 1.744 resistance and bring fall resumption.We feel the resistance should holds below 1.7420 without news to push it past, and we will expect the price action to resume its downward, Stock Day Trading, move towards 1.7048.Now, go ahead and take a look at what trading activity transpired in the session following when this article was written. Hopefully, it went my way.Getting, Stock Day Trading, the proper forex trading education, to be able to recognize that adjustments should be made, and more importantly understand how to make those adjustments, is the best way to survive and thrive in this or any kind of market. Learn to be an independent trader and control your own future.Eddie has trained traders for 10, Stock Day Trading, years. His Forex trading course, or Forex seminar, is the only Forex trading education you need.
Source: articleage.com
So, hopefully, you have been keeping up with my looks back on the Forex markets. Forex trading, like any other skill, can be improved with research and education.That being said, the greatest asset for research is hindsight. Remember, in Forex trading, history tends to repeat itself. It is this fact that we will try to exploit in our looks back at Forex trading.So far, we have focused only on Cable, which is a nickname for the currency pair - British Pound / US Dollar. The, Stock Day Trading, symbol for cable is usually represented as GBP/USD.In our technical analysis, we use time frames ranging from weekly to hourly. This way, we have a good outlook on the trend in the both the long and, Stock Day Trading, short term.Remember, this article was written well before you are actually reading it. Use this information as a tool only. By the time you read this, our support and resistance levels will have changed.Do not attempt to use this information as trading advice in any way whatsoever.I look forward to hearing your thoughts and comments.OK, let's get to the trading.Cable appears to moving once again. I really feel good to have a daily range well over 100 pips that was not directly driven by news. We fell short of getting in our trades last night, there just was no real bounce before the down move.The 1.7440 level only really had two reasons to take it, and was only 14 pips, Stock Day Trading, away from the close of the previous days trading close. That's just a, Stock Day Trading, little too aggressive especially with the volatility starting to increase.The 1.7440 level is now much more important as we add a last nights high to the growing list of reasons to take it. Cable has turned outlook consolidative first but upside should be limited by 1.744 resistance and bring fall resumption.We feel the resistance should holds below 1.7420 without news to push it past, and we will expect the price action to resume its downward, Stock Day Trading, move towards 1.7048.Now, go ahead and take a look at what trading activity transpired in the session following when this article was written. Hopefully, it went my way.Getting, Stock Day Trading, the proper forex trading education, to be able to recognize that adjustments should be made, and more importantly understand how to make those adjustments, is the best way to survive and thrive in this or any kind of market. Learn to be an independent trader and control your own future.Eddie has trained traders for 10, Stock Day Trading, years. His Forex trading course, or Forex seminar, is the only Forex trading education you need.
Monday, September 28, 2009
Day Trading Success - With Pivot Points, Support Resistance And Moving Averages
Author: Sacha Tarkovsky
Source: articledashboard.com
If you want to make money day trading then you will need to have some indicators that work and the above are very popular. Lets look at them and see which are the most, Stock Day Trading, effective.The logic of day trading Is of course to predict where prices will go in a daily or hourly periods.The Market The market consists of trillions of dollars traded by millions of participants daily, all with different methods and trading objectives. This creates volatility which, Stock Day Trading, in a day can see prices go anywhere and is totally random and very few of these participants are, Stock Day Trading,, Stock Day Trading, interested in daily moves or ranges. So what does this tell us? Quite simply that pivot points, support and resistance are useless tools in such short time spans. If volatility and price moves are random they can't help you predict market direction.Now you know why: You never see a day, Stock Day Trading, trader with a long term track record of profits its always a hypothetical one!The only way you will ever make money in day trading is in hindsight you certainly wont see a real winning record over the long term. Moving averages can they be used? Well I saw a few systems and e-book promotions using moving averages to trigger trades, Stock Day Trading, and laughed out loud at how serious they were about doing this =. Moving averages are a lagging indicator! So how on earth can you use them to enter trades? These guys said they were traders but it was pretty obvious they had never traded in their lives. Most day trading systems are sold by writers who have never traded in their lives. They want you to buy their books and systems that's how they make their money NOT from trading. Day Trading If you want to lose it's a great way to do it!There is no better way to, Stock Day Trading, lose money than day trading, its fantastic at wiping out equity and doing it quickly. Applying technical tools over meaningless random data will not bring you success. There is a lot of hype about day trading. Investors fall for a good story due to being naive and greedy - don't make the same mistake.
Source: articledashboard.com
If you want to make money day trading then you will need to have some indicators that work and the above are very popular. Lets look at them and see which are the most, Stock Day Trading, effective.The logic of day trading Is of course to predict where prices will go in a daily or hourly periods.The Market The market consists of trillions of dollars traded by millions of participants daily, all with different methods and trading objectives. This creates volatility which, Stock Day Trading, in a day can see prices go anywhere and is totally random and very few of these participants are, Stock Day Trading,, Stock Day Trading, interested in daily moves or ranges. So what does this tell us? Quite simply that pivot points, support and resistance are useless tools in such short time spans. If volatility and price moves are random they can't help you predict market direction.Now you know why: You never see a day, Stock Day Trading, trader with a long term track record of profits its always a hypothetical one!The only way you will ever make money in day trading is in hindsight you certainly wont see a real winning record over the long term. Moving averages can they be used? Well I saw a few systems and e-book promotions using moving averages to trigger trades, Stock Day Trading, and laughed out loud at how serious they were about doing this =. Moving averages are a lagging indicator! So how on earth can you use them to enter trades? These guys said they were traders but it was pretty obvious they had never traded in their lives. Most day trading systems are sold by writers who have never traded in their lives. They want you to buy their books and systems that's how they make their money NOT from trading. Day Trading If you want to lose it's a great way to do it!There is no better way to, Stock Day Trading, lose money than day trading, its fantastic at wiping out equity and doing it quickly. Applying technical tools over meaningless random data will not bring you success. There is a lot of hype about day trading. Investors fall for a good story due to being naive and greedy - don't make the same mistake.
Sunday, September 27, 2009
Forex Day Trading - Day Trading Doesn't Work So Don't Try It
Author: Sacha Tarkovsky
Source: articledashboard.com
The logic of day trading is totally flawed and will never make, Stock Day Trading, you money over the longer term and will wipe out your equity. If you want to prove it ask anyone who says it does to give you a real time track record of profits and you won't get one. Why? Because day trading does not make money. Before we begin, you may ask yourself why there are so many people claiming they make money at day trading? Well the answer is it's a good story and appeals to peoples greed.This creates system sales and revenue for the vendor OF these day trading methods so they make money you lose. Here are the reasons day trading does not work: 1.Time Period A day is to short a time period to judge market trends accurately. Think about it. Trillions of dollars are traded, Stock Day Trading, everyday and prices can go anywhere and there is no, Stock Day Trading, way of guessing what the volatility in a day will be or the direction. Short term moves are simply random. You could probably flip a coin and do as well as most day traders. 2.Stops Day traders use the daily range to buy and, Stock Day Trading, sell and set stops. Stops therefore tend to be close to entry by the very nature of day trading. Volatility in a single session is impossible to judge and most times simply picks off the stops and creates small, Stock Day Trading, losses which add up.3.Banking profits early, Stock Day Trading, Most day traders are looking to scalp a few pips here and there. They do have some wining trades (more by luck than by judgment) but of course they break the fundamental rule of trading leveraged investments which is:Run your profits to cover your inevitable losses. As they have a lot of losses and marginal profits the net result is the erosion and eventual wipe out of account equity. Day Trading is a good story, but in reality day trading doesn't work over the long term. Simply, Stock Day Trading, ask any vendor who, Stock Day Trading, sells a day trading system for this:A real time track record of their profits over 3 years and see the answer you get. The conclusion from all of this? You guessed it - Avoid day trading if you don't want to lose your money.
Source: articledashboard.com
The logic of day trading is totally flawed and will never make, Stock Day Trading, you money over the longer term and will wipe out your equity. If you want to prove it ask anyone who says it does to give you a real time track record of profits and you won't get one. Why? Because day trading does not make money. Before we begin, you may ask yourself why there are so many people claiming they make money at day trading? Well the answer is it's a good story and appeals to peoples greed.This creates system sales and revenue for the vendor OF these day trading methods so they make money you lose. Here are the reasons day trading does not work: 1.Time Period A day is to short a time period to judge market trends accurately. Think about it. Trillions of dollars are traded, Stock Day Trading, everyday and prices can go anywhere and there is no, Stock Day Trading, way of guessing what the volatility in a day will be or the direction. Short term moves are simply random. You could probably flip a coin and do as well as most day traders. 2.Stops Day traders use the daily range to buy and, Stock Day Trading, sell and set stops. Stops therefore tend to be close to entry by the very nature of day trading. Volatility in a single session is impossible to judge and most times simply picks off the stops and creates small, Stock Day Trading, losses which add up.3.Banking profits early, Stock Day Trading, Most day traders are looking to scalp a few pips here and there. They do have some wining trades (more by luck than by judgment) but of course they break the fundamental rule of trading leveraged investments which is:Run your profits to cover your inevitable losses. As they have a lot of losses and marginal profits the net result is the erosion and eventual wipe out of account equity. Day Trading is a good story, but in reality day trading doesn't work over the long term. Simply, Stock Day Trading, ask any vendor who, Stock Day Trading, sells a day trading system for this:A real time track record of their profits over 3 years and see the answer you get. The conclusion from all of this? You guessed it - Avoid day trading if you don't want to lose your money.
Trading Commodity Futures Using Support and Resistance - Paper Trading
Author: Erich Senft
Source: articleage.com
Setting Up a Paper Trading AccountQuestion:I cannot trade with "real money" as yet; however, how do I go about setting up a paper trade account?Answer:You can paper trade various ways and it really does not require that, Stock Day Trading, you have anything more specialized than a notebook to track your trades and access to charts.Begin by funding your paper trading account with the amount of money you think you will really begin with, whether it is $2000 or $20,000. I would suggest that you begin with no less than $5000 and $10,000 is even better.Next you need to decide on which markets you are going to trade. The more money you have in your account, the more markets will be available to you. If you are trading with a $5000 account there is no point in becoming familiar with a market like Crude Oil that has a margin of $3000 per contract!Assuming that you are a smaller trader, you will be most interested in the lower margin markets like the grains, some of the meats, maybe a metal and a currency or two. I would, Stock Day Trading, suggest you limit, Stock Day Trading, your scope to about 6 - 8 markets, as these will be enough to track on a daily basis.Even real money traders rarely follow more than 8 markets...it just becomes too cumbersome, as I'm sure you will find when you've got, Stock Day Trading, more than one paper trade going at a time.If you don't know which markets to choose from, maybe I could make a couple of suggestions:* Corn, or wheat - these are good markets for traders of all levels, but especially the beginner. The margin is not too high and the markets normally act predictably and trend well. Corn and wheat have a tendency to move together (but not always), so watching both, Stock Day Trading, can be redundant.* Cocoa - a good market to make money in as a small move can add up to good profits. Also can be a good market to lose money in for the same reason. I don't mind cocoa, although I know people who have sworn it off. This is the time to find out if it is for you...when it doesn't cost you real money.* Sugar - used to be a good market because it is easy to get in with minimal risk; however the abundance of support and resistance can make it confusing to new traders. Lately the market has lacked direction which only adds to the confusion. Still it is low margin, Stock Day Trading, and relatively low risk market to trade.* Live Cattle - a decent meat market. Some new traders avoid the meats entirely because of their ability to make huge ranges. Cattle is the "safest" of the meat markets.* Cotton - can, Stock Day Trading, be a good market, but is capable of making large ranges. I used to avoid cotton like the plague, but have become fonder of it in recent years.* Soybeans - the Pork Bellies of the Grain complex. If soybeans are too volatile for you consider trading one of the bean cousins, like soybean oil, or soybean meal. They tend to mirror soybeans, but are generally, Stock Day Trading, less margin and less volatile.* Silver - I like the metals; however gold can be a little rich for the small trader. Silver mirrors gold - the poor man's gold, Stock Day Trading, . Some people like copper, but I consider it too thin and margins too high for small traders.* Canadian Dollar/Australian Dollar - two of the more reasonable currency markets. The margins are lower, but there is excellent money making potential. Other markets like Swiss Franc, British Pound, and Japanese Yen are good markets too but require much more margin and risk. All the currencies have a tendency, Stock Day Trading, to move in the same direction anyway (opposite the US Dollar) so it doesn't really matter.But don't stop here, this is the time to practice and refine your skills so include any other markets you are interested in, but avoid the exotics like lumber, rice, oats, palladium, etc. They are just too thin and too volatile for the small trader to be involved in.Now that you have a paper account and a mix of markets to trade you need to search the markets to find trades to make. Once you have found a trade you like, write down your entry, your exit and your profit target - exactly.If you are dealing with a broker, you can call and ask them if your paper order had been filled on a particular day. Alternatively you can just look at the charts and figure it out for yourself.Sometimes you will need to see an intraday chart to know exactly when you got your fill. Barcharts.com offer free intraday charts. Just follow the commodity, Stock Day Trading, chart link and then click custom charts, Stock Day Trading, to alter the time frame displayed to a 5 or 10 minute interval.Track your trades day by day keeping a journal of your profits and losses. A simple way to "journal" your trades is to put them on 3x5 index cards - one card per trade. Write down you reasons for taking the trade as well as exact entry and exits. Make sure to note what you did right and what you would do differently the next time. Allow an extra two ticks on your fills and exits as this will simulate slippage. Brokerage fees are usually $40 round turn per contract.See how well you can do but be honest. Cheating here will not help you in the future. I'm sure you've heard it before, but nothing changes when you trade with real money. If you can't do it on paper, you won't make it for real. Trust me. I've been there.If you don't already have it, you might want to consider using Gecko's Track 'n Trade Pro. As the name suggests the software not only provides charts but also "tracks your trades". You fund a fictional account, place your orders and the software will automatically update your position day by day.It really is phenomenal software and if you are halfway serious about trading you should check it out. It is a legitimate tax deduction too. ;-) You can get a free 30 day trial by following this link: http://www.trackntrade.com/demo/?abbr=SENFTThere is also paper trading software, Stock Day Trading, out there and on the internet which is supposed to simulate trading; however in my opinion it is not realistic for most small traders.Some of the simulators only allow you to trade the e-mini and others start you out with a $50,000 account. This is great if you want to trade the e-mini, or if you are trading with a $50,000 account, but this is not the case for most traders.Anyway, that's paper trading in a nutshell. I hope it helps a little. Please do not hesitate to write back if you have more questions, of if you need me to elaborate on something.Best of luck,- Erich erich@supportandresistance.comPS. Don't skip this part of your education. Most traders hurry through paper trading only to get killed in the markets. Don't make this mistake.U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures, Stock Day Trading, and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading, Stock Day Trading, system or methodology is not necessarily indicative of future results.CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS, Stock Day Trading, MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.The commodity markets first captured Erich Senft's attention in the 1970's when the Hunt brother's made the news when they tried to corner the silver market. Ever since then he had a desire to learn more about what made the commodity markets tick.After experiencing mild success trading futures with the, Stock Day Trading, limited strategies offered by Ken Roberts, he delved deeper into the study of, Stock Day Trading, the commodity markets and became particularly interested in the concepts markets.Erich and partner Tom Loge' run http://www.supportandresistance.com and publish the hugely popular Traders Helping Traders Ezine 6 days a week. Erich and Tom have a daily blog at http://www.supportandresistance.com/blog/Erich is a graduate of the University of Alberta business program and has a Bachelor of Commerce degree, Stock Day Trading, . He is also a registered Commodity Trading Advisor (CTA). He lives in the Pacific Northwest with his wife and three cats. When he's not talking or trading commodities you can usually find him on the golf course chasing a disobedient little white ball.
Source: articleage.com
Setting Up a Paper Trading AccountQuestion:I cannot trade with "real money" as yet; however, how do I go about setting up a paper trade account?Answer:You can paper trade various ways and it really does not require that, Stock Day Trading, you have anything more specialized than a notebook to track your trades and access to charts.Begin by funding your paper trading account with the amount of money you think you will really begin with, whether it is $2000 or $20,000. I would suggest that you begin with no less than $5000 and $10,000 is even better.Next you need to decide on which markets you are going to trade. The more money you have in your account, the more markets will be available to you. If you are trading with a $5000 account there is no point in becoming familiar with a market like Crude Oil that has a margin of $3000 per contract!Assuming that you are a smaller trader, you will be most interested in the lower margin markets like the grains, some of the meats, maybe a metal and a currency or two. I would, Stock Day Trading, suggest you limit, Stock Day Trading, your scope to about 6 - 8 markets, as these will be enough to track on a daily basis.Even real money traders rarely follow more than 8 markets...it just becomes too cumbersome, as I'm sure you will find when you've got, Stock Day Trading, more than one paper trade going at a time.If you don't know which markets to choose from, maybe I could make a couple of suggestions:* Corn, or wheat - these are good markets for traders of all levels, but especially the beginner. The margin is not too high and the markets normally act predictably and trend well. Corn and wheat have a tendency to move together (but not always), so watching both, Stock Day Trading, can be redundant.* Cocoa - a good market to make money in as a small move can add up to good profits. Also can be a good market to lose money in for the same reason. I don't mind cocoa, although I know people who have sworn it off. This is the time to find out if it is for you...when it doesn't cost you real money.* Sugar - used to be a good market because it is easy to get in with minimal risk; however the abundance of support and resistance can make it confusing to new traders. Lately the market has lacked direction which only adds to the confusion. Still it is low margin, Stock Day Trading, and relatively low risk market to trade.* Live Cattle - a decent meat market. Some new traders avoid the meats entirely because of their ability to make huge ranges. Cattle is the "safest" of the meat markets.* Cotton - can, Stock Day Trading, be a good market, but is capable of making large ranges. I used to avoid cotton like the plague, but have become fonder of it in recent years.* Soybeans - the Pork Bellies of the Grain complex. If soybeans are too volatile for you consider trading one of the bean cousins, like soybean oil, or soybean meal. They tend to mirror soybeans, but are generally, Stock Day Trading, less margin and less volatile.* Silver - I like the metals; however gold can be a little rich for the small trader. Silver mirrors gold - the poor man's gold, Stock Day Trading, . Some people like copper, but I consider it too thin and margins too high for small traders.* Canadian Dollar/Australian Dollar - two of the more reasonable currency markets. The margins are lower, but there is excellent money making potential. Other markets like Swiss Franc, British Pound, and Japanese Yen are good markets too but require much more margin and risk. All the currencies have a tendency, Stock Day Trading, to move in the same direction anyway (opposite the US Dollar) so it doesn't really matter.But don't stop here, this is the time to practice and refine your skills so include any other markets you are interested in, but avoid the exotics like lumber, rice, oats, palladium, etc. They are just too thin and too volatile for the small trader to be involved in.Now that you have a paper account and a mix of markets to trade you need to search the markets to find trades to make. Once you have found a trade you like, write down your entry, your exit and your profit target - exactly.If you are dealing with a broker, you can call and ask them if your paper order had been filled on a particular day. Alternatively you can just look at the charts and figure it out for yourself.Sometimes you will need to see an intraday chart to know exactly when you got your fill. Barcharts.com offer free intraday charts. Just follow the commodity, Stock Day Trading, chart link and then click custom charts, Stock Day Trading, to alter the time frame displayed to a 5 or 10 minute interval.Track your trades day by day keeping a journal of your profits and losses. A simple way to "journal" your trades is to put them on 3x5 index cards - one card per trade. Write down you reasons for taking the trade as well as exact entry and exits. Make sure to note what you did right and what you would do differently the next time. Allow an extra two ticks on your fills and exits as this will simulate slippage. Brokerage fees are usually $40 round turn per contract.See how well you can do but be honest. Cheating here will not help you in the future. I'm sure you've heard it before, but nothing changes when you trade with real money. If you can't do it on paper, you won't make it for real. Trust me. I've been there.If you don't already have it, you might want to consider using Gecko's Track 'n Trade Pro. As the name suggests the software not only provides charts but also "tracks your trades". You fund a fictional account, place your orders and the software will automatically update your position day by day.It really is phenomenal software and if you are halfway serious about trading you should check it out. It is a legitimate tax deduction too. ;-) You can get a free 30 day trial by following this link: http://www.trackntrade.com/demo/?abbr=SENFTThere is also paper trading software, Stock Day Trading, out there and on the internet which is supposed to simulate trading; however in my opinion it is not realistic for most small traders.Some of the simulators only allow you to trade the e-mini and others start you out with a $50,000 account. This is great if you want to trade the e-mini, or if you are trading with a $50,000 account, but this is not the case for most traders.Anyway, that's paper trading in a nutshell. I hope it helps a little. Please do not hesitate to write back if you have more questions, of if you need me to elaborate on something.Best of luck,- Erich erich@supportandresistance.comPS. Don't skip this part of your education. Most traders hurry through paper trading only to get killed in the markets. Don't make this mistake.U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures, Stock Day Trading, and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading, Stock Day Trading, system or methodology is not necessarily indicative of future results.CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS, Stock Day Trading, MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.The commodity markets first captured Erich Senft's attention in the 1970's when the Hunt brother's made the news when they tried to corner the silver market. Ever since then he had a desire to learn more about what made the commodity markets tick.After experiencing mild success trading futures with the, Stock Day Trading, limited strategies offered by Ken Roberts, he delved deeper into the study of, Stock Day Trading, the commodity markets and became particularly interested in the concepts markets.Erich and partner Tom Loge' run http://www.supportandresistance.com and publish the hugely popular Traders Helping Traders Ezine 6 days a week. Erich and Tom have a daily blog at http://www.supportandresistance.com/blog/Erich is a graduate of the University of Alberta business program and has a Bachelor of Commerce degree, Stock Day Trading, . He is also a registered Commodity Trading Advisor (CTA). He lives in the Pacific Northwest with his wife and three cats. When he's not talking or trading commodities you can usually find him on the golf course chasing a disobedient little white ball.
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