The risk can be default, earnings do not

The risk can be default, earnings do not

If there is an inviolable when it comes to trade the markets rule is always respect the stops. Before opening a new position we must know our level of accepted risk. This is the best way to ensure that our losses will be under control and we will not let us dominate by emotions when it comes to operate.

The truth is that trading is hard, and the proof of this is that the number of traders who fails is much greater that succeeds. However, traders who fail to do contrary to what many may think because their ideas about the market are wrong, but because they let their emotions become involved in the process. This failure is due to the fact that they close their positions very soon--even the winners - and let run their losses too. The key here is that the risk must be default. Logically the most appropriate time to consider the risk is before entering the market, when our mind is open and the decisions are not affected by what happens to the price.

On the other hand, if we have an open position we want to stay with it until it becomes a winner, which unfortunately happens always. We must always think of the worst possible scenario and place our stop-loss in a monetary or technical level that is consistent with our strategy of monetary management.

Once again we must emphasize the fact that the risk must be default before entering the market, and we must stick to the parameters that we have set for this purpose. Emotions should be abandoned to not allow that they dictate the point in which we place our stops.

Each operation, no matter how safe is your development is basically an educated guess. In the market, nothing is certain because there are many external factors that can affect the movement of prices in the markets, and the Forex does not escape this phenomenon. Sometimes the basics move the market without prior notice and cause changes in trend, in other factors intervene, how the actions of the major central banks or a change in the rates of interest for example. Faced with this reality, the traders must be prepared before the unexpected, for which there is no better tool than the stop orders that limit losses since they allow us to predetermine our risk.

Unlike the risk, earnings may not have anticipated. For example when moving currency pairs, the movement can be broad or the opposite short. It is here that the monetary management becomes essential. Some professional traders tend to operate based on the opening of several batches at a time instead of just one large. In this way ensures fast with the first batch gain while leaving the second run and move stop loss to the point of breakeven (price at which that lot does not produce profits or losses). This allows trader to operate with more peace of mind since it ensures a profit and saves you from the uncertainty of deciding if you should close or not a position that let it continue could provide higher returns.

Usually the Forexmarket moves in trends which can last days, weeks or even months. For this reason many strategies to operate in this market are based on trends since operate on ranges can be difficult and cause constant losses. Despite this, many traders specialize in operate on ranges since they also present opportunities.

If the market is in a range that lot that left open the trader probably finish without causing profits or losses since the price likely will activate stop loss. However, if a trend emerges that same lot will produce a profit.

When operating in the market, half of our trading plan must be constituted by the operation strategy and the other half by the monetary management. Even if we are losing operations, we need to understand them to learn from mistakes. No and well understood no strategy is safe and works 100% of the time. However if the ruling is in line with a strategy that has produced more successes than failures in the past, accept the loss and continue left single trader.

The key is to get our minds to focus on the general approach of our strategy and see each individual operation as something insignificant. Once we have mastered this skill, no matter if we operate with $1000 or $100000, always follow our rules.

Not to leave a winning operation becomes loser

Not to leave a winning operation becomes loser

In the market we must always protect our revenues. Point. There is nothing worse than be observing a position that was earning 30 points in a minute, just to see how it reverses and in a short time he is losing 40 points or more and activates our stop-loss. If one has not undergone this experience, you can be considered lucky, since it is a situation faced by most of the operators more often of what you can imagine and is an example of a poor monetary management. The Forex market can move fast, what can become a winning operation loser in a matter of minutes, so it is critical to proper management of capital.

One of the primary rules in trading is to protect profits, even if it means winning only 10-15 pips in an operation. For some, 15 pips it may seem like a pittance, but if we make 10 operations that earn 15 pips on average, this means a total gain of 150 pips which is not negligible. 



Of course, this approach may seem that we are operating as speculators fear fearful to take the risk, but trading the most important thing is to minimize losses and along with that, make money as often as possible. We have to think that it is our money. Even if it is money that we can lose, commonly known as venture capital, we must always bear in mind that we are against the market. Like a soldier on the battlefield, first of all, it is necessary to protect themselves.

There are two ways to avoid that an operation passes winner or loser. The first method is to go with the market (the trailing stops) stop moving. The second is a derivative of the first, and basically operate with more than one lot. The trailing stops require more work, but it is one of the best ways to ensure the cattle pips. The key to the use of the trailing stops is setting a target of profit taking in the short term.

For example, if our short-term objective is 15 pips, this means that once the market moved on our behalf about 15 pips, we proceed to move stop loss to breakeven (the price at which position does not produce profits or losses). If at the end the price moves against and activates the stop, this doesn't matter since even though profits were not obtained, there were no losses. Conversely, if the operation is developing positively, we can go moving stop loss along with the market in increments of 5 pips, allowing you to go little by little protecting retained earnings. This we can compare it with a game of Black Jack, in which retired $25 as part of our untouchable profits whenever we won $100.

The following method as mentioned involves operate with more than one lot. For example, if we operate with two lots, we can establish two goals of earnings. The first can be placed on a more conservative level which is close to the price of entry, about 15 or 20 pips, while for the second batch can be used a much more remote goal with which we seek to make a more considerable profit, thereby increasing the profit/risk ratio. Once the first target is reached, move stop loss to breakeven, which in essence complies with rule not to allow that a winning operation becomes the loser.

With respect to the trailing stops, 15 pips use does not constitute a law written on stone. Everything really depends on the style of trading and the framework of time spent by the operator to operate. For example, traders who like to operate in the long term can be one first much greater than about 50 or 100 pips target, while short-term traders may prefer one objective of 10-20 pips.

Manage home individual operation is always more art than science. However, trading in general requires that we put our money at risk, so it is always advisable to think in terms of first protect our revenues to then try to increase them if possible. The successful operation in the market is simply the art of accumulating more gains than losses.

The destructively impulsive trading

The destructively impulsive trading. Forex

More money has been lost operating impulsively by other causes. For example, it is common to hear beginner traders phrases such as: "the market has come down too, so it should start uploading". This kind of thinking is based more on impulsive thinking rather than on the use of reason, which should always prevail when it comes to operate in the market.

It never ceases to amaze discover how behave people highly prepared, disciplined and intelligent in places like Las Vegas for example. Men and women who never in his life would pay more than one dollar that the price negotiated by a product or service in their business suddenly lose $10 000 or more in just 10 minutes in games like roulette or blackjack. Noise, lights, excitement and crowds present at its around transform these people sober and intelligent players unconscious and irrational. The foreign exchange market, with its ever-changing prices, its constant flow of news, and the more liberal leverage in the world's financial markets tends to have a similar impact in novice operators.

Operated by impulse is the same as bet, so simple. You can provide momentary profits when you are on a winning streak, but a single important loss may result in that trader will lose not only their profit, but also all its capital and in less time than it can believe. As well as all history in Las Vegas ends in bankruptcy, the same happens with the impulsive trading. In the market, the logic makes us winners and momentum to kill us.

This maxim is not true since the trading logic is always more accurate than the impulsive trading. In fact, sometimes the opposite. Impulsive traders may have an impressive streak of winning operations, while traders who use logic-based operation schemes can have losing streaks. The cause of that reason will triumph on the impulse is that traders focused on logic know how limited their losses, while impulsive operators are almost always one or two operations remain in total bankruptcy.

Now let's see an example of how both types of traders operating in the market. The operator A is an impulsive trader. It 'feels' the price action and acts accordingly. Now imagine that the GBP/USD is moving upward and it reached a new high. At this point the operator to "feel" that the price has gone up too and open a sell position. And then it happens that the couple continues to rise, which convinces the trader that the market is overbought State and decide to increase your sell position.

What happens then is that the price stops but does not back up. Faced with this situation the impulsive operator is sure that the price is at its highest for which tripled his sales position, only to watch in horror as GBP/USD continues to rise and rise, which ends with a margin call on your account. A few hours later, the price actually reaches its maximum value and begins to drop rapidly, what cause the operator to become submerged in a sea of negative emotions - including the fury - while watching as the market moves in the direction he predicted without that you can do anything.

In this case, the trader was right about the market, but chose the high momentum and not logic.

On the other hand, the operator B employs both technical analysis and fundamental analysis to calibrate risk and estimate the time to enter. He also thinks that the GBP/USD is overbought, but instead of choosing a halt prematurely to enter the market, waiting patiently to which there is a clear technical signal like a red candle in an upper Bollinger band or a movement in the RSI below the level 70 before opening a position. In addition, the operator B uses the height of the movement as the logical point to place your stop-loss with which quantifies the risk.

This trader is sufficiently intelligent to use a size of position which does not risk more than 2% of your account and the operation fails. Even if you make a mistake as A operator, logical and methodical approach to operator B allows you to preserve your capital, by which may operate another day, while actions impulsive operator A led it to lose all of your account.

In the Forex market trends can last a long time, so dare to operate against the trend based on feelings about that is before the maximum or the minimum, can lead to disaster if the trader does not care. In fact, it is not necessary to hold a whole movement of trend reversal for good profit, if we can take advantage of a 70% - 80% of a movement, we can say that it was a very good operation.

While the impulsive trading may seem more exciting, the reality is that the trading based on logic - used by professionals - is what will make us money in the long run.

Forex traders are profitable

39.1% of the Forex traders are profitable

Why so many lose in Forex and what adjustments the losers traders have to do in order to be among the select group of traders who consistently earn Forex?

Well, until we deepen more in the theme, first we will analyze the claim that 39% of Forex traders are profitable. The information was provided by the Forexmagnates site through a report on the profitability and performance of Forex brokers. The most prominent figure was 39.1% of profitability for customers of a broker who had around 24,000 active accounts.

There are also other interesting snippets of information that are worth noting before going ahead.

There was a sharp drop in the number of accounts and levels of activity in 2011, while the percentages of profitable traders increased. This could suggest a couple of points of interest, firstly, traders may be improving collectively in their activities in the market or (and is not mutually exclusive) many beginner traders have simply abandoned the market, returned to work 5-9, leaving the field open more competent traders whose superior results have improved the statistics data. We have also seen a reduction in the number of Forex brokers, which has caused that only the fittest traders supported by brokers to better comply with regulations regulatory end up prospering, when before many traders operated with deficient brokers services that ended up cause them losses.

Forex brokers industry to the United States retail is showing clear signs of slowing down, and in fact these companies report that the number of trading accounts has been backsliding. The extreme regulatory climate has made it extremely difficult for U.S. brokers to attract new customers. However, many customers of these companies show a high level of benefits and are cost-effective in the long run.

It is fascinating to see how many can find this fact quite striking and contrary to some of the most common preconceptions about the Forex. To my and many others claim that only 10% of traders are profitable is nonsense. Although most traders end up losing in the market, there is a lot who operate responsibly and with a sensible and well thought out trading plan, and therefore profit more or less regularly.

A question often posed by this type of statistics of success is "Are the figures by a small percentage of winning traders distorted being?” However, overall percentages, averages, and the distribution of the random data do not work that way, a basic knowledge every trader should have. If around 40% of the operations are profitable then the number of the percentage of traders who have a positive return should be fairly close to that number.

In the first paragraph we raised the question of why are so many losing traders in the Forex market? Armed with this new information one might wonder whether that assumption should not be examined in more detail. If we listen to the data, about one third of United States Forex trading accounts is profitable, or at least was in 2011. Certainly these statistics indicate most traders lose money in Forex, although not 90% catastrophic stating above. In these data, the distinction between full-time and part-time traders is not although we could dare to say that operators presenting best results are those who dedicate more time to this activity, as opposed to traders who enter the market from time to time to bet.

This assumption seems logical if we think that to be trader in time full (at least for a period), the person must have profits, i.e. which has to be profitable over time, otherwise could not engage in this activity 100%. Probably traders today are educated more than before and in addition, some of these people may be traders who started his career years ago and persevered despite initial losses.

Turning to the question posed in the initial paragraph; "Why so many lose in Forex and what adjustments the losers traders have to do in order to be among the select group of traders who win consistently in the Forexs?" Then we leave them with the six main reasons and please feel free to join this blog with your own suggestions or additions. Now we will not investigate the reasons or to provide solutions, is a simple and more complex list, the answers are there, the solution is obvious.

But first, let's recapitulate: If about forty percent of traders succeed in the Forex market, this means that this objective can be more within reach than many have foreseen. This is an important stimulus for novice traders.

The six main reasons why traders fail

1.    Low initial capital

2.    The lack of risk management

3.    Greed

4.    Indecision - doubt plan

5.    Try to choose maximum or minimum

6.    You refusing to accept losses

Scalping is not for emotional traders

Scalping is not for emotional traders

The Forex currency market is active throughout the day. This means that there are always people in different parts of the world that are negotiating with currency pairs together in the hope of generating a profit from these transactions. The Forex market has become very popular in recent years due to several reasons. To begin with, it allows the average person can make an investment with a very small amount. The barriers to entry are very low, and the operator can easily negotiate anytime during the day or night. Due to the fact that the market remains open throughout the day, many people tend to operate actively in the darkness of the night.

Now, there are many strategies and different styles of negotiation that a person can use when operating in the Forex market. One of them is the scalping. Some traders prefer to follow a strategy of negotiation in the long term, which means essentially that they hold positions with currency pairs longer in order to generate more profits. However, there are many operators who opt for lower profits by performing operations for smaller periods. Many traders with little experience in the foreign exchange market often think the scalping as a viable strategy.

However, that is scalping? In a nutshell, scalping in Forex market basically means to negotiate currency based on time frames short, even for a few minutes, in which the objective is to obtain fast profits in a short time. Some traders often hold their positions in currency pairs for more time in the hope of generating a greater benefit. However, there are many who feel that continuous benefits in the short term are a much better choice. Traders that use scalping hold positions for a short period of time and then closed them to earn a small profit.

The reason why the scalping is so popular is because it allows the trader to operate with an aggressive approach, without risking to have large losses. Instead, you can finish producing significant benefits in the long term. However, while it can be a great choice for the beginner traders, it is necessary to know some important aspects about the scalping. First, this strategy is not for traders who are too emotional and that often make operations without carefully analyzing the market.

On the other hand, the scalping requires the trader to put a considerable amount of attention to the market. The trader has to understand peak of negotiation at all during the day and will also need to find out how it is changing the market with each individual operation performed. Therefore, it is logical to think that scalping requires a considerable amount of time. This style is not for the casual trader which only operates for a couple of hours in the foreign exchange market.

It goes without saying that this strategy is not for everyone. It requires a very particular set of skills, as well as a considerable amount of discipline by the trader, if you want to generate a profit. In general, it is advisable to incur once you have some experience in Forex scalping. Without the proper experience, likely ending the trader with a significant loss on your account.

The psychology of trading

The psychology of trading. Apart from the fear

Investment in financial markets is one psychologically frustrating activity. We can have all the logic of ours and which, however, the market perform the movement you want (and worse, when you want). We must get used to generate a high tolerance to failure against losses and a not build us castles in the air when we are in a winning position. In general, the more frequent are our operational; more we will face against our own psychology. For those who do intraday trading (many fast operations to the end of the day not) keep any open operation) or swing trading (operations in a short period, usually of a) day a couple of weeks), is made absolutely indispensable to follow the famous three "em" of Alexander Elder: "Money, Mind, and Method".

Fear is a powerful motivator and a "healthy" emotion, to a certain extent. One thing people often do not realize when you think of the fear, however, is that fear is activated not only by the danger, but also for the opportunity to. The other side of the danger. And in fact, trading both aspects are inseparable.

As a result of this division, there are two types of traders, which are mainly motivated by the fear of losing an opportunity... and those who are mainly motivated by the fear of losing money.

Those who are afraid of losing money end up losing good opportunities, and those who fear losing good chances at the end lose because they come to the market when they should not.

In clinical terms, this situation of double aspect is called approach/avoidance and is one of the problems most stressful psychologically speaking that human beings face and that also manifests itself in the trading. Suffer from approach/avoidance is like driving with one foot on the accelerator and the other on the brake. The driver accelerates up to the red line, but not going anywhere.

It's like a double bind. Naturally, people try to avoid double links and however in trading we face it all the time. It is not surprising that the traders stress, even professionals.

The beginner traders worsen this approach/avoidance situation, focusing on one side of the coin, usually the reward. But when we do that, when we ignore the reality of the risk and we focus exclusively on the positive side of the market, we feel emotionally ambush if the market does not behave as we expected. This puts the trader in a cycle of endless hope and despair, or in the case of some traders, bloody fights without end on the market.

How do we avoid this problem?

There is no reward without risk. To balance the risk/reward equation we have to give the same level of attention to the risks that I incur to estimate the potential of reward. If we are able to maintain both possibilities in our minds simultaneously, the potential gains and potential loss, we will eliminate the possibility of being surprised by a nasty surprise, which is what feared in the first place. If we prepare for the loss in advance and manage the size of the position properly, most of the negative effect of a loss is reduced.

Therefore, it is essential to pay attention to both effects of the equation.

Common pitfalls for beginners traders

7 common pitfalls for beginners traders

Operate in the foreign exchange market is hard enough without the potential traps in which fall many beginner traders. Without the proper guidance, large amounts of money can be lost quickly through erroneous practices that could have been avoided. STP as Trade brokers not benefiting from the loss of customers, and in fact, it is of greatest interest that traders obtain gains and to continue to operate with them in the long run. For this reason, they offer the following tips for operators with little experience.

No one is immune to these traps, but learn to identify them can save lot of time and money in the future. These are common misconceptions that have people about financial markets and which unfortunately are applied more or less constantly, especially for beginners.

Try to check these errors at least once a month, and be sure to protect yourself against these. Here are the 7 most common traps in which a trader may fall during his career in the markets:

Moved and concentrate too much on earnings

Veteran operators always keep calm, regardless of whether they win or lose. Make lots of money of course, is the dream of all, but the people who let their emotions peel off too when they win will not enjoy his victory for long. To think that it is a kind of glow, a trader could run a greater risk of which is willing to accept normally. It is always good to celebrate modestly when you win, but should not be allowed that this feeling stays in your head for a long time, since no one wins all the time.

Blindly follow the masses in the market

Even when there is a great calm in the market or a specific asset that can have a greater boom due to a Newsflash, it is important to be careful not to be dragged by the current, since it is often impossible to know when it will end. Novice investors often make the mistake of not having an exit strategy for the moment and can continue in the market long after the good times have ended, even losing money in large quantities.

Follow blindly the opinions and expert analysis

Investors may not know it all, even on a specific asset, so it is important to be selective and to diversify. Renowned sites and opinions of first-line operators weigh much into a decision. However, for each operation, you should consult more than one source in order to refine the plan to follow. Often, the predictions of many elite operators will be far from the reality, therefore not should get all the eggs in a single basket.

Delay time for the closing of a position

When a trader opens a position and the market moves in your favor, he tends to keep the operation open for longer than originally intended. This can occur even if an asset achieves a more high/low value than expected. After all, who knows when will reach its maximum benefit? But therein lies great danger: think that the asset goes up or down all the time. Even worse, it is common that assets carried out a considerable correction after a rise and steep fall. Inexperienced traders tend to keep their positions for too long, holding heavy losses thinking that eventually the market will start to move in your favor. The market leaders often focus on securing their gains able term when they occur, and not concentrate on large profits that can or does not occur.

Add to losing positions

This trap is related to the previous, but has a different twist. While a position that stays open may be generating losses, a common mistake that many traders make is to think that at any time the market to reverse his direction, and these losses will end up turning it into profits, which often does not occur, especially in a trend. And most importantly: do not be should add more positions in order to offset the losses, since it can take a long time until the price return to the predicted direction, and even the price could not never returning to the value at which the position was opened.

Operate based on pulse

While there is some room for intuition in Forex, operators should not base their decisions on these impulses. Instead, always must be attached to the basic principles and analysis. And certainly they should not be based on an unfounded rumor or a respected guru telling the future. Nobody is capable of this, and the failure to perceive this truth is the loss for many traders.

Going against the market

There will be times in which many people are going to lose, especially when there is a war or a company goes bankrupt. However, unless the causal factor is known clearly in your mind, do not operate against the market. Every day, millions of investors operate around the world, all with the same goal of making money such as you. Don't think that you can beat them all unless it has a clear, tacit test that are doing something wrong. Remember: sometimes there is a lot of wisdom in the crowd.

There are many other hazards to consider, but these are the main. Please note that the trading requires patience and persistence. Even experienced operators make mistakes and lose much. The more a person operates most experience win.

Advantages of forex currency market

Advantages and disadvantages of the currency forex market

Find out about the advantages and disadvantages of the currency forex market is absolutely necessary, as well as compared to other markets to determine which best suits our investor profile before you invest our savings.

These are some of the points that must be taken into account before choosing the currency market as a platform for our investments.

Advantages of forex currency market

Well used leverage

Leverage is a very useful tool if we use it wisely and that will allow you easily increase or decrease our exposure to the market.

Open 24 hours a day

Being a global market and in continuous movement, we can perform operations on any time of the day since the price of currency pairs is continuous.

Very liquid market

Be so liquid is one of the biggest advantages of the Forex market since, except for highly volatile, we will always find a counterpart to our operations.

Cost of operations (commissions)

While operating we will find with expenses inherent to operations in the form of Commission (fixed) or through pay a differential (spread) between supply and demand. Either way, costs tend to be lower in comparison with the investment in other types of financial assets.

Bi-directional operations

In this market brokers allow us to open short positions (to take advantage of a bearish movement) or long (we can take advantage of the upward trend) and which, therefore, makes our chances of finding investment opportunities increase.

Disadvantages of the currency forex marketPoorly used leverage

Seeing that the broker with whom we are doing operations allows us to open positions in a situation of 300:1 may seem a positive feature, but have positions open that leverage is a reckless if we are not aware of the high risk posed to our capital this way of operating.

Non-regulated market

Being a global interbank market, its regulation offers many difficulties. Therefore, we can see how the different agents that are part of it, such as banks or brokers, are regulated and supervised by national institutions such as the CNMV in Spain or FINMA in Switzerland.

Without a centralized market

One of the main characteristics of this market is that it does not have a body or centralized institution through which pass all the operations and that it could oversee the proper functioning of the market.

These are some of the most important points that must be taken into account when taking the decision on the currency market is the most suitable for us or if on the contrary we must choose other financial assets for our investments, as can be the CFDs, equity investments,... etc.

Steps to Create Your Own Trading System in Forex

6 Steps to Create Your Own Trading System in Forex

The main objective of this article is to guide you through the process of developing your own trading system to Trade Forex.

Although devising a system may not take too long, if it can take a long time to prove its effectiveness. So, you should be patient, because a long term a good system of trading you can generate much money.

How create your own Trading System in Forex

Step 1: Time frame

The first thing you need to decide to create your trading system is to know what kind of operator wants to be. Would you like to be 1 day or 1 hour trader? Would you like to see graphics every day, every week, every month or even every year?

How long you would maintain your open positions?

Answering these questions will help you determine which frame time used in your operations. Although in the same way you can analyze graphs with different periods of time, this will be your main time frame, which you will use when you search for signals to open and close positions.

Step 2: Choose indicators that will help you identify a trend

Given that one of our goals is the identification of trends as soon as possible, we use indicators of technical analysis that can achieve it. For example, moving averages are one of the most popular indicators that operators use to identify trends. They are typically used two moving averages (a slow and other fast) expects that the fast across to the slow above or below. This is the basis for what is known as crossing moving averages-based system.

Of course, there are many other ways to find trends, but crossing moving averages are one of the easiest to achieve this.

Step 3: Find indicators that confirm the trend

The second objective for our system of trading for Forex is that it has the ability to prevent false signals and thus avoid falling into false trends. The way to do this is making sure that when we see a sign of a new trend, we can confirm it using other indicators.

There are many indicators confirming trends, like for example: MACD, stochastic and RSI.

As you feel more familiar with the indicators, you will find some that will want over others and that you can incorporate them in your system.

Step 4: Define the level of risk

In developing the system, it is very important that you define how much you are willing to lose in each operation. A very few like to talk about losing, but in reality, a good operator think first what can eventually lose before you think about how much that can win.

The amount of money one is willing to lose is very different from one trader to another. You have to decide how much space is sufficient to enable your operations breathing, but at the same time, not risking much in a single operation. In following lessons we will explain more details on the administration of the money (money management). The money management plays a large role in how much risk that you should give to each operation.

Step 5: Define inputs and outputs

Once you've defined how much these willing to lose in a transaction, the next step is to discover where place the closing of a transaction to get the maximum possible benefit.

Some people like to go as fast as they can in a trend when its indicators give a good signal, even when the sailing has not been closed. Others like to wait until the end of the candle.

According to my experience I think it is better to wait for the candle close before making an entrance. I have been in many situations where I am in the middle of the candle and all my indicators are engaged, only to discover that at the end of the candle, operation turned against me.

But you can have a different view when you have some experience. It is really only a style of operating. Certain people are more aggressive than others and you should go slowly giving your account type of trader are you.

For closings or market outlets, there are different options. One way of doing a close is to place a stop-loss; this means that if the price moves to your advantage in "X" amount, move stop loss for this "X" amount.

Another way is to determine a level and exit when the price reaches that level. As to determine that level, it is up to you. Some people choose to support and resistance levels to do so. Others only choose the same amount of pips in each operation. Way, calculate the target level is your thing, just be sure that it is the optimum for you and hold on to the. No matter to pass, never leave before.

Another way to go, is to have a criterion, that you a signal that will allow you to exit. For example, you can create a rule that, when your indicators are marked a certain level, you come out of the operation.

Step 6: Type system rules and comply with them

This is the most important step when creating your trading system in Forex. You must write the rules of your system and always follow them. Discipline is the most important characteristic that a Forex trader must have, so always stay true to your system! Only in this way you can detect possible errors and improvements but step by step, test, returns to try, take conclusions and make small changes without drive you crazy. If you are continually changing system without giving a certain margin is impossible that you know what works and what does not. No system will work for you if you do not follow their rules, so remember to be disciplined!

How to test your system?

The fastest way to test the effectiveness of your trading system is to open an account with an online broker. You can access the trading platform and charts where you can go back in time and move the chart forward slowly to see if your system had worked well. Ideally, move forward vela to sail. When you move the chart candle to candle you can follow the rules of your trading system and analyze what would be the result of your operations accordingly. You can record the history of your operations and be honest with yourself.

Save the lost profits, average earnings and losses. If you are happy with the results try your demo account system during a reasonable period of time. A period of at least two months is recommended. This will give you an idea of how you can operate your system when the market moves. You must believe me there is a big difference when operas live, when only you do tests.

After a couple of months of operating in demo, you can realize if your system is reliable for the market and go to use your system in a real trading account. At this point, you must you have confidence and feel comfortable with your system to open operations without hesitation.

Automatic Forex trading systems

Automatic Forex trading systems (Robots): advantages of using them

Forex traders always debate about which is the best method of trade to use: is better to trade in the financial markets by hand or use automated trading robots?

Before you say you are the advantages of using this type of system I am going to give an explanation about bots in general.

The real commercial robots are those that provide a series of benefits which will make your transactions to be performed without complications or risks.

I would describe as a perfect trade robot that gives you the option of adapting it to their own style of making operations. You can be a manual operator that has its own strategy of negotiations and adapt them to a robot.

In other words, a trading robot is computer software that has been specifically designed to follow its requirements and its trading rules. So this would be another version of you, with the difference that is automated and the only thing that makes is to analyze and exercised their activities in financial markets 24 hours a day.

Please note that a robot can be fully automated, but you can activate and deactivate when necessary. It's like having an employee who never sleeps and never gets emotional and simply does what you tell you to do.

Some people call trading robot automated trading systems, others call them expert advisors, and others just call them simply Forex robots. No matter whose name them from this type of software, what matters is that they can be programmed to make your work easier. .

Advantages of using automated trading robots

Remember that each negotiating currency is different and what works well for anyone who works in this may not work well for you. We all have to find our own way to make our trading. 

Below are the advantages of using an automated trading system.

1. Work with a set of rules without inclinations, without greed, without fear or ego

Unlike humans, trading robots will be never ill guided by emotions, and are not affected by the psychology of the merchant. Operations to run automatically once the trade rules are met. Follow all the rules of the trading without flush whatever the market situation. They will not to panic in a trading loss or revenge after a great loss. They won't jump back into the market after a major victory to earn more money. They play and carry out its rules without clouding the negotiation process with the emotions. Let us be realistic, since human beings are basically emotional beings and it is not uncommon for example get nervous when suddenly we lose in a negotiation, this could affect our performance to make the next currency move. However, with robots, we can be sure that they follow the rules despite previous operations.

Automated trading is a great way to build confidence in the market to avoid the emotions and psychological problems affect business decision-making.

2. Monitor the market 24 hours a day

Let's be honest here also because some people simply don't have time to trade due to their busy schedules. Some of these same people are looking for robots to make them trading because they don't have time to do it so often.

You don't have to worry if you have lost some opportunities of trading Forex robot will do the tracking for you. Automated trade systems can take the trading in the day and night, and the opportunities are not lost. Monitor the markets every second on a 24/5 basis without any intervention. You don't have to be stuck on the screen and analyze the graphic on the right it close enough to see possible configurations of transactions. His Assistant or robot gives you the power to control dozens of currency pairs at the same time with the ability to identify and respond to business opportunities immediately. They are capable of opening and closing operations in accordance with its negotiating strategy, while you are engaged in any other human activity. This is a great way to save time and do other activities. In short, you don't have to be enslaved making contributions for the purpose of obtaining benefits.

3. Identify and react to opportunities faster

Entering or exiting a currency trading to another a few seconds before can make a big difference in the outcome of the trade. A Forex robot is performed in a fraction of a second and benefits from sudden movements of the market. The speed of the computer used to monitor markets and identify opportunities for hard-coded rules-based trading executed based on these rules in fractions of seconds. As soon as you enter a position, all other orders are automatically generated, including stop losses and proceed when there are benefits. You will never stay without trading opportunities.

4. Continuously carry out the negotiation plan

It is irrefutable that the ability to meet the plan is what makes the difference between a good (profitable) trader and a bad trader (unprofitable). By using an automated robot for the Forex trading, you can be very sure that the robot will be totally disciplined to implement the plan regardless of market condition. The robots are designed to keep the plan and no exceptions. If you think that it cannot maintain the plan established at all times, by using a robot, you don't have to concern or care about this because the robot is always an expert when it comes to make purchase transactions in the Forex currency market sale

5. Running operations without errors

What is even more surprising when using a robot is not only going to continue with the trade plan, but will always carry out operations correctly. A robot is not going to make a sale when a purchase should be, is not going to go into the wrong lot size and will not calculate evil a stop-loss or will not calculate wrong parameters of profits. If you do the trading, there will be moments in which no doubt runs incorrectly, but with robot operations this can be avoided completely.

Note: This is usually the case, but there are many things that may arise and cause errors in the operation of a robot, including the broker server connection problems, problems of Internet access, as well as problems with the construction of the Meta Trader robot. Peaks of propagation can impair performance, as well as a host of other problems that could occur. The experience of the real world, robots may sometimes have problems also.

6. They diversify the trading

If you are in search of ways and means where you can maximize your potential trading in such a way how to get to trade more in an instant, a Forex robot is the answer to your search. A robot monitors dozens of currency pairs at a time and does so more efficiently than a human operator, and also makes it effortless. It has the ability to explore sales opportunities across a variety of markets, generate orders and monitor trading transactions. Also it gives you power to negotiate multiple accounts or multiple strategies at the same time. This may sound you incredible to, but for a robot this is absolutely feasible.

Conclusion

How much time can you commit themselves to negotiate? How much effort is willing to put? How long can putting on this type of trade? Many operators enjoy viewing graphics, studying the technical indicators, and anxiously waiting for news or important news release. The use of a robot completely removed these factors for the merchant and therefore may not correspond to the preferences of each one. On the other hand, if an operator is trying to make money with almost no participation, trade with a robot can be the right choice. However, if the merchant enjoys the search process and make decisions of trial on the basis of information that come in graphics, then security robots will be boring for them.

It seems pretty obvious that if you are the type of agent that doesn't mind using a bit of your time or even enjoy the process of analysis of indicators and graphs, then an automated system would not be of no use to you. However, if you don't want to dig deeper into the negotiating process and prefer to spend more time doing other activities while accepted some gains in this trade, definitely a Forex robots you can be what you need.