Forex Trading Indicators - The Keys to Finding Forex Success

By Steve Crown 

The Forex Market or Foreign Exchange market is where a professional trader purchases and sells currencies. The best way to initiate trades is to become fully familiar with the Forex trading indicators: In fact it is necessary that you do so. By understanding the Forex indicators you are in a position to properly evaluate information and affect successful trades. The various types of Forex indicators are discussed below.

1. Trend indicators will show three movements with respect to (the market) price including up, down and to the side. The trend indicators are helpful in implementing your Forex trading strategy. The trend indicators show you what to expect with regard to price consistency and inconsistencies over specific (time) periods.

2. Volume indicators are relative in that they are useful in supplying information as to the interest level of investors in the Forex market. If the investor volume is high then it is more than likely indicative of a new trend. A low level of interest may suggest investor uncertainty or also that investors are simply not interested in a particular currency market. Conceptually in order to fully appreciate volume indicators you will need to become knowledgeable in what the (supplied) data means. Additionally, you will need to know the best way to respond to the information provided. Quick increases or decreases in volume may suggest reversals. A decrease in volume that is continual yet consistent may be supported by movement that is fast-paced within the market.

3. The third type of indicator is the momentum indicator. The momentum indicator tracks the rates within the currency exchange during particular time periods. It also charts simultaneously the weakness or strength of a trend's movement. The greatest momentum is found at the start of a trend. The lowest level of momentum is naturally at the end of a trend.

In order to use the Forex indicators successfully you will need to establish incompatibility with the Forex rate(s) and the data provided by Forex indicators. Movements with respect to indicators and rates suggest the following information:

1. Changes in trend may be expected when the momentum indicator is strong and the rate of exchange is moving sideways.

2. A weak momentum indicator is a sign that the currency exchange rate is about to increase.

3. Diversity in direction between the momentum indicator and rate is illustrative of the fact the current trend is starting to weaken.

4. Another important Forex indicator is the volatility indicator. The volatility indicator provides the trader with information as to the relative proportion of a price or rate increase or decrease. As a trader you will find sometimes the Forex market is highly volatile and other times it is less risky.
The indicators make it possible for the Forex trader to achieve profits when conducting trading activity within the Forex market. If the Forex market is at a low level of volatility you may surmise that there is little investor interest. In this light you may anticipate an enormous movement within the market. This is your sign that it may be the time to reap substantial profits with respect to your trading activities.
You will need to select indicators that provide you with the necessary data essential to your success as a Forex trader. You do not want to use too many indicators that are similar. What you want is an indicator that provides information and an indicator that subsequently verifies the information (previously) supplied by the initial indicator.

Safeguarding Your Investments With Forex Risk Management

By Delores Lee 

Forex trading is one of engines that run the world economy. It is the place where people earn higher profits, create their names and gain stability in the trading business. It is a one big platform of opportunities and great benefits which would likely be an open door for success. The chance to get financial success significantly depends on how you execute Forex risk management. However, there are a lot of business owners who are afraid to try foreign exchange trading. This is due to the fact that they are blind by the thought that investing in a currency is a scam or by other fraudulent schemes made to rip them off. But this is just a false belief. They just don't know how helpful their investments would be in the world market.

What happens on a Financial Market?
People buy and sell different stocks and currencies taking the advantage of their daily fluctuations. Here competencies and different innovations never run out of style. The Forex market is a highly sophisticated type of financial market and therefore traders should be aware of modern Forex risk management systems. A lot of quick decisions are to be made, so traders should really be flexible and focus on every trading process in order to get full control of the whole transaction. By doing so losses and future financial troubles will be avoided.

Two Groups of Traders in the Fx Market

• Banks and Companies. This first type of traders are trading for the sake of business. Once they profited in the currency of one country, they will then convert it to the currency of another country in order to earn more. This method will help them to save a lot since converting through the Central Bank is too costly.


• Individual Traders. This refers to struggling traders that want to earn higher profits. They are self governing and are the ones designing their own trading systems and methods. Some big investors may consider them as nothing in the Forex world, but somehow their investments also contribute to the value of currency that affects the economic growth.

What is Forex risk management?
It is one of the most popular strategies of this new era. One of the features of this method allows traders to trade online without using real money. One of the advantages is that you have small risk due to not exposing your investment. This is very helpful especially for small traders or even for neophytes of trading.
Whatever the Forex market may bring you, just remember that confidence is not effective if not anchored with great competency and responsibility. Success in trading is easy to reach only if you have a proper Forex risk management.

Let's all admit the fact that Forex market is the place not only for success and profits but also for losses and high risks. Perhaps, the reward and financial gains you acquire here is just similar or with very little difference to the risks you take. Because of the market's volatility, there is no stability on its direction, not to mention that the price of currencies and stocks often fluctuates. As a result, traders are prone to drawbacks and losses if they won't implement proper Forex risk management.

This kind of business requires hard work and higher competency in order not to encounter troubles in the future. Traders really need to commit an enough time to study and master the major processes in trading. They also need to be familiar with all the factors that significantly affect the market's flow that may influence trading transactions. Part of their responsibility is also to be aware of the risk they are taking, they're future outcome if not taken into account, and on how to manage or lessen its intensity. That's why a Forex risk management was developed in order to:

• Avoid surplus stocks. One of the ways to avoid financial troubles is to limit your stock orders. Purchase only an average quantity needed for trading. This way, you could avoid extra expenditure and debt.

• Conquer your emotions. In the trading business, it is ideal to not let your emotions overrule in the process. It would only add up to your worries and burden.

• Do not invest your money in just one trading transaction. Higher risks are taken if you will just concentrate and put all your investments in one trade. Chances are, if unfortunate events will happen, you'll just going to lose all your money leaving you with no resources to pull you up.

Forex risk management is essential in every trading. It does not only lessen the risks you are taking, but also gives you the confidence to overcome hardships and difficulties the Forex market may give you. Remember, the key to success is hard work and competence. This two work hand in hand for the achievement of goals.

Difference Between Demo and Live account in Online Forex Trading.

A consistent live account trader of one month is better than the consistent of five years of demo trading. The fact is that you cannot grow or be successful if your money is not involved in forex trading. As a demo account trader you can try all experiments but with live or real account it is a different psychological frame of mind. You learn faster from your mistakes and get refined, matured and disciplined in the market.

As a beginner trading live account, you will see money on the table (i.e. sure trading position that will yield profit) yet fear of loss grips you and you just sit down there and watch the market move in the trend you have envisaged or analyzed. But if it were demo account you will go for it. On demo account you take risks which ordinarily you would not dare on a live account, you end making money there. But it turns out to be another story when it’s a live account.

Even though demo account is a near perfect simulation of live trading, the trader’s emotions and fears are completely wide apart. It is traditional or conventional for most trainers to ask you to begin demo trading after your training, but with my training, I am changing that course. My experience, boldness and success stem from the fact that I got burnt in the market, but I decided to face the question of why I encountered losses and since I found that answer I have nearly been on over 95 per cent success story.

Most people who have lost money in forex trading and hence loathe forex are those who (by my guess) spent much time demo trading without a good psychological preparation for the real or live trading. Also, those who lose money initially to inadequate education (on technicals and fundamentals) of the market think forex trading is a herculean task. The initial losses discourage them and they never go far beyond overcoming that trauma to look for the right answer rather the blames are heaped on the market. Forensic analysis on their account history will definitely show their wrongdoings.

In summary, good education and fearless early live market entry is a sure way to finding the door to successful career and profitable trading.  No pain, no gain!