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If you looking for a way to increase your income in a relatively short period, Forex trading systems should be on your list of consideration. In the past decade since they were first introduced there dependability and reliability has improved significantly. Presently there are over one hundred systems available for public use.Out of those one hundred currency trading systems, there are a select few that are very high quality. From that select few, there are two products that I think are exceptional software systems and they currently dominate the sales figures within the industry. They are so successful because they deliver to the customers what they promise.Please don't misunderstand me, you simply can not upload a Forex software system to your computer today and begin to make money tomorrow. I wished it worked that way, unfortunately it doesn't. These are TOOLS to help you make money and you need to learn how to operate these tools.Each of these software products has numerous programmable options to allow its users the flexibility of managing there investments according to there individual risk tolerance level. In other words, one person might be willing to accept a higher risk if it means a corresponding larger reward. Where as the next person, might want a low risk factor and for that safety level they are willing to have smaller returns on there investment.Which ever type of investor you are the Forex trading systems I am recommending willing meet your needs. But, to ensure long term profitability I advice you to open a demo Forex account and practice until you are achieving the financial results you are expecting. The systems I use each day to make my living with are named Fap Turbo and Forex MegaDroid. When you have some time, why not review there websites and see what they can do for you if you dedicate yourself to learning how to operate the software?Perhaps the best advice that you will receive in your trading career is live to trade another day. Currency markets are volatile, brutal and unforgiving. You should learn to survive in the markets.The single most common factor that causes many traders to blow up their accounts is greed. When you get greedy, you start taking unnecessary risks. You will spend countless hours trying to discover the Holy Grail technical indictor or a forex robot that will make you rich. You believe that by discovering that secret of investing, you will become rich without losing a single trade.Unfortunately there is no Holy Grail for anyone in trading. You will win and you will lose. So you must learn not to risk more than 2% of your account on one trade. Grow your account incrementally over time. Never ever be tempted to risk big, making one single winning trade that can make you rich.Now, know how much you are willing to risk in a single trade. I have said 2%. But if you want to be aggressive you can go up to 5%. But stay between 2-5%. Don't exceed it. On the other hand, if you are conservative, you should consider risking between 1-2% only.Once you have decided on the risk you are willing to take, knowing the rest is simple. Suppose you have a $50,000 account and you decide on a risk of 2%. How much you can risk on a single trade? You can only risk (50,000) (0.02) =$1,000. This is the maximum you should risk on a single trade.However, if you are going to trade more than one position at the same time, the amount may become higher. Let's assume you are in 3 trades at the same time trading three currency pairs! You should risk only $1,000 per trade. So your total money at risk will be (3) (1000) =$3,000. Once you have calculated your risk, you are can determine the trade size.Trade size is the number of contracts you purchase in any one single trade. You need to first determine where you want to put your stop loss in order to determine the trade size. Let's use a simple example to make it clear. Suppose you are willing to risk $1000 on trading EUR/USD pair and you decide on a stop loss of 50 pips. Each pip on EUR/USD pair is equal to $10. So the number of contracts that you can trade are 2= (1,000)/ (50) (10).You have taken the guesswork out of your trading once you have determined your risk level and calculated the trade size. You can sleep well now knowing how much of your money is at risk. You are going to be able to trade tomorrow, no matter what happens today.Using these common and simple money management rules will help you avoid the pitfall of losing almost all the money in your account. Never ever take more than 2-5% risk in any single trade. Learning to survive the markets and trading another day is the essence of trading. This can help take your trading to the next level of profitability.Rollovers occur when a transaction continues for more than two days, and the Forex trading order is automatically rolled over to the next day.Because the Forex trading market is a spot market, where trandsaction are made instantaneously, trades must settle in two business days. But don’t worry… You don’t have to sell everything after two days! This is exactly why we have the option for Forex trading rollovers.In Forex system trading you have the option of a rollover, so that your transaction will remain relevant for two more days. Forex trading Rollover can happen every two days, so your investment stays indefinitely.Rollover Charges and Interest RatesEvery rollover has a certain transaction cost, which is set according to the Forex site and software you are using. This information needs to be looked over before you invest, so there won't be any surprises.Rollover charges are different according to the currency you invest in, and this should also come into account when deciding how to trade.Forex trading Rollovers occur when the NY trading market closes at 17:00 ET. Traders sometimes earn interests on rollovers. US interest rates, for example, are higher than Japan's, so if you are holding a long USD/JPY you will be able to accumulate interest for the rollover. On the other hand, holding the JPY will means paying interest on the rollover.When the rollover is made, the currency can also move up or down for a few pips, so also take that into account when you notice changes in the Forex currency the day after.

NAPSI)-The U.S. economy may be down--as well as the rest of the world's financial markets--but banks are hiking their fees again and Americans struggling through these tough times are the ones taking the hit to their wallets. The decision by several large national banks to hike credit card interest ratePrepaid re loadable debit cards offer the best financial management option today. Consumers are looking for a system to help them pay bills, make purchases and save money, and prepaid debit cards help by giving users control of their spending.Meanwhile, bank customers are continuing to be heavily affected by increased fees and interest rate hikes. According to the Federal Deposit Insurance Corp., last year, United States banks and savings institutions collected $39.5 billion in deposit-account charges. In addition, research firm Moebs Services, Inc. found that the financial industry's median overdraft charge has increased 10 percent--to $27.50--in the six months since banks began receiving money under the Troubled Asset Relief Program (TARP), a program started last year by the U.S. government to purchase assets and equity from financial institutions in order to strengthen the financial sector.Prepaid debit cards are the viable alternative to the fees and interest rates that consumers are currently paying. These cards are able to offer many of the benefits of the larger banks--online access and bill pay, instant account alerts--and even some that banks can't, such as a savings account with a 5 percent annual percentage yield.While banks are taking more money out of Americans' wallets, NetSpend prepaid debit cards are helping people put that money back, and even providing them with money management tools and features that enable them to better track spending and put money away for the future.XTRL, what does is mean? Where did this term come from? XTRL it is an old acronym for Control. It can be used interchangeably with CTRL. This site is about taking charge of your surroundings and having more to say about what goes on in your life. From what you buy to how much you pay in taxes, even funeral expenses, you can have more control over your situation no matter what that might be If you want more input over the decisions others are making for you then you should find this web site helpful. We can show you how to save money and time. and take back XTRL.

"I realized several years back the FOREX is the best opportunity available to every day people like me to build a sound financial future. See you in the trade rooms.""2006 is the year of financial freedom for me - "I can feel it in my bones." I know it's coming and I know that forex trading is the key. Once I learn to master this skill my life never be the same - none of our lives will.""I'm 18 years old, and im interested in doingcurrency trading. I have no previous experience in FX training, trading, or any other type related to this, but i hope to catch on quickly. I've wanted to invest in real estate since I was 14, and have studied it on and off since then, but I think this is agreater financial and career establishing opportunity, and im trying to learn as much as I can.""I have no experience in the financial world I don't even balance the check book! BUT I do know that I can do this and so can you!! So far I have been successful...I promise its not hard.""I come into this enterprise with miniscule experience as a trader and just enough knowledge about fx to lose my shirt in 5 minutes or less. I’m here to learn a workable system for foreign exchange trading. I like the concept of being ableto make money from anywhere I can take my laptop.""I am new to forex trading. My expectation in this course is to build a base of understanding and knowledge of the forex exchange. My goal is to learn how to trade effectively to retire from my 9-5 within the next three years if not sooner. My challenge is to leave emotions out and follow the fundamental rules to become a successful trader.""I have been with FXT since February 2005 and have enjoyed the program very much. My wife and I have been busy learning how to be successful traders over the last few months. Our goals are to become financially successful so we can provide more for our church and spread the Lord's word acorss the world. May God bless us all abundantly through this wonderful program.""I am new to Forex Trading. I've played the HYIP game and I look forward to learning a skill that will provide me the opportunity to be successful based on how I apply what I have learned. Success is a choice and I plan on being successful.""I am a retired airline pilot who has done a little commodity trading in the past, however, have always been very intrigued by the FX market. Now that I have completed the beginner's and advanced training from FXT, I am doing a review with the new Interactive Training Modules. I'm pleased to report that I am already having success in live trading, and am VERY excited about the FX market and the FXT products and business!What a fantastic opportunity!""I am looking forward to learning and trading the forex market. Some years ago, I traded options with some success, but discovered the forex market could be more rewarding. So looking forward to learning.""I joined one month ago and have been in corporate chat rooms. I am up over 130 pips and really just learning! I spent over $7000 on other systems and training and couldn't make money. FXT is FANTASTIC!""I found out about forex while looking for a new career. I have bookkeeping experience but thats about it! I love the concept of this type of trading and look forward to learning the skills and "enjoying the game"."I'm very excited to learn about Forex. I want to build my skills so that I can generate enough from Forex to raise my kids and sustain a nice life style as well as have time to help others.""I started with FXT about 3 weeks ago and I am excited to have an opportunity to learn how to be a FX Trader the right way. At 58 I feel like I am going to college for the first time, but my mentor has made me feel quite comfortable here. I feel I have finally found a home with FXT and working in the FX currency market.""I am looking forward to opportunity and education that is offered by FxT. The interaction that the business provides through this learning center and the potential for positively changing your life is exciting."

The global Forex market which is widely known as the foreign exchange or the currency trading market has become one of the most popular markets to deal with in the last few years. With the increase in the global economy, a lot of people have started trading in Forex. Prior to this, the economy was not spread over all the countries. It is now possible for people to convert large sum of money into different currencies. This market is the largest in the world and includes all kinds of investors including banks, other financial institutions and other individual investors. The daily volume of trade in the forex market exceeds four trillion dollars and hence it appears to be quite a lucrative market to venture in.There are quite a few things that would separate the forex trading from the conventional markets. The trading volume differs greatly and then follows the other factors such as the exchange rates and lower profits. Hence a lot of people are turning towards the global foreign exchange market to beat the competition and this market has a demonstrated track record of its increase since 2001.The other way in which the forex market differs from the traditional market is that here the inter-bank market is at the top of the pyramid. Unlike the stock options, the investors to not have a same access to all the prices. It differs greatly. As the level of access is decreased, the difference between the asking price and the bidding price also increases. Hence it is still possible for someone with lower access to earn large amounts of money.At the same time as there is no central market involved in forex, there are no specific regulations that control the exchange. Global trading system in forex includes quite a lot of countries and hence compiles an intertwined market. Therefore there is not much of the single trading system here considering the scores of different prices and rates. These differences in the exchange have a direct effect on the gross domestic product, the inflation rates as well as the trade and the budgets of the economic transactions.There are a lot of people who plunge into the forex trading market in order to invest large sum of money and with the intention of making more money from it. This financial market is still on a rise, despite the recessive economy all around the world. A lot of new invest

NEW YORK (Dow Jones)--The euro's forward march stalled Thursday as choppy U.S. stocks caused the common currency to bounce up and down against the dollar before exiting the New York session little changed from day-earlier levels.

In overnight trading, the euro had continued its two-week tear against the dollar, rising to a fresh 12-month high of $1.4768, but couldn't sustain those gains in erratic North American trading.

The euro had been climbing against the dollar as improving economic data and rising equities fueled optimistic risk trades. When economic data brightens and stocks rise, investors funnel funds into the euro, the Australian dollar and other high-yielding currencies.

But when data is discouraging and stocks fall, investors seek shelter in the safe-haven dollar.

Investors might have taken the pause in the euro's recent rally to take profits on the common currency's recent gains, a move that would lend temporary support to the dollar, said Vassili Serebriakov, foreign exchange strategist at Wells Fargo in New York.

The dollar advanced against the euro for part of the New York session, but the euro zone's common currency made a modest comeback in the afternoon. Trading was confined to a narrow range.

"We're still in a dollar-bearish environment, so any pullbacks are relatively shallow," Serebriakov said.

U.S. economic data released Thursday mostly met analysts' expectations, but showed a continuing slow recovery in the housing market, leading to a split market reaction, analysts said.

The better-than-expected Philadelphia Fed Manufacturing Survey business index jumped to 14.0 in September, its highest level since June 2007, and up from 4.2 in August.

Beneath the survey, though, lurked a worsening employment number, which could have led to some of the dollar's resilience in Thursday's session, said Brian Dolan, chief currency strategist at Forex.com in New Jersey.

Traders are "eyeing the 10,000 level" on the Dow Jones Industrial Average, said Kathy Lien, chief strategist at Global Forex Trading in New York. However, the Dow Jones Industrial Average ended slightly lower on the day.

"Should equities continue to rally, it will be hard to argue against further dollar selling," said Scotia Capital's Sacha Tihanyi.

Thursday afternoon in New York, the euro was at $1.4737 from $1.4729 late Wednesday, according to EBS via CQG. The dollar was at Y91.17 from Y90.78. The euro was at Y134.38 from Y133.72. The U.K. pound was at $1.6440 from $1.6506, while the dollar was at CHF1.0285 from CHF1.0306.

The Australian dollar advanced to its highest level since August 2008, $0.8775, before paring some of its gains. The Canadian dollar also rallied and the U.S. unit fell to as low as C$1.0608, its lowest level since last October.

Elsewhere, yen support continued from Japanese officials overnight Thursday, calming concerns that the new government might be tempted to curb yen strength through market intervention.

The yen got a lift on remarks by Bank of Japan Governor Masaaki Shirakawa suggesting he thinks a stronger domestic currency may benefit Japan's economy in the long term.

Earlier Thursday in Tokyo, new Japanese Finance Minister Hirohisa Fujii had said that he still sees no need to intervene in currency markets to weaken the yen.

"There's no change in my thinking" that it's not the time to consider foreign-exchange intervention, Fujii said at a news conference. Fujii had added that "the idea that the yen should be cheaper for the sake of (Japan's) exporters is wrong."

Elsewhere Thursday, the outcome of the meeting of the Swiss National Bank had only a fleeting effect on the dollar. The central bank said it will continue to intervene in currency markets to weaken the Swiss franc. A strong franc is rendering imports cheaper, which is increasing the risk of deflation, or a prolonged period of falling prices.

The U.K. pound weakened on comments from Prime Minister Gordon Brown at a summit of European Union leaders Thursday. He said countries should "continue and cement" their fiscal stimulus packages. The pound had alerady been under pressure after comments from a Bank of England governor earlier in the week supported continued low interest rates

The message that the G7 was trying to get across to traders and other financial gurus of the world last month is beginning to make sense and sink in. What was the message? “There have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability. We continue to monitor exchange markets closely, and cooperate as appropriate.” In other words, while all of Europe is reeling in the fact that the US Dollar is giving the Euro a bit of a boost, traders and financiers alike need to remain vigilant because things can easily change.
Luxembourg Finance Minister Jean-Claude Juncker stated to reporters that, “Financial markets didn’t correctly understand the message from the G7. “I have the impression that more financial markets have a better understanding. I would encourage them to stay on track.” Juncker is the chair of the finance ministers from the fifteen nations that currently recognize the Euro as their currency. He realizes that things could change all too quickly if there was a sudden upswing in the dollar and that things need to move a slower pace to make sure other economies do not see the same financial slump as the United States.


Dollar Drops And Boosts Euro

The dollar has fallen yet again and with the newly released data on the economy’s strength, doubt has been raised over whether or not the Federal Reserve will be able to bring the interest rates back up later in the year. Of course, in Germany, the Euro got a nice boost thanks to producer prices hitting a three week high. Boris Scholossberg, who is the senior currency strategist at DailyFX.com, believes that the inflationary pressures in Europe are helping to keep the Euro up.
He went to also note that a weak 0.2 percent rise in American producer prices has also caused concern. The United States consumer market is currently sitting the lowest ever since 1980, the last time the country was in a recession. “This is really bothering the market, because last week people thought Fed easing was over and the economy had stabilized, but the numbers lately are causing doubt,” Schlossberg said.
While the interest rates in the United States seem to be helping the flagging American economy, the situation is more complicated than it seems. This is due in part to core producer prices rising more than 0.4 %. These prices do not include food and energy figures. “Nothing here to give the Fed a peaceful night’s sleep, even allowing for the better-than-expected headline for finished goods that was helped by a fall in gasoline prices,” stated Alan Ruskin who is the chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut.
While Schlossberg stated that Wednesday’s Ifo survey of the German business market could push the Euro to a high of $1.60, the slower euro-zone growth is making it uncertain how markets are going to fare when the bank’s make their next move. Some people do not agree, however, and feel that the healthy first quarter growth in the euro zone will not add to the confusion of the rising and falling economic conditions.
The currency markets related to the bank of Japan has managed to keep their borrowing costs to 0.50% as was expected and the Australian dollar hit their highest number - $0.9617 – in 24 years. This was announced shortly after the central bank’s policy meeting told everyone that they had been discussing raising interest rates which may indicate that a future hike may be in store. There is still no word on how the Federal Reserve will take the new data or whether or not they will officially announce an American recession, something the American people are already accepting.

The dollar continued its downward spiral on Friday, dropping to another yearly low versus a basket of currencies. Out of fashion even compared to low-yielding currencies like the yen, the buck has been pummeled this week amid speculation the global economic situation has improved significantly.Optimism has been reflected in surging stocks of late, causing traders to seek better returns in the higher-yielding euro and sterling.On Friday, traders shrugged off disappointing Japanese GDP figures, instead focusing on better-than-expected Chinese economic data. Retail sales and industrial production rose in China, bolstering the view that Asia can lead a worldwide recovery.The dollar plunged to its lowest level since February versus the yen, hitting 90.20. With the loss, the dollar accelerated toward its 13-year low of 87.08, set in January.Japan downwardly revised its economic growth for the second quarter, to reflect a steeper fall in domestic demand that was partly offset by a faster growth in exports, an official report showed Friday.
Meanwhile, the dollar extended its yearly low versus the euro, dropping to 1.4634. The buck has been drifting steadily lower all summer as stocks continued to improve.The dollar also fell further versus the sterling, slipping to a monthly low of 1.6741. In economic news from the US, consumer attitudes brightened in September, according to a closely watched survey.An improved outlook helped bolster optimism, though the results indicated that consumers remain convinced that they will face a tough economic situation for some time.

Determining what trading style fits you best Understanding the different trading styles. Developing and maintaining market discipline. Before you get involved in actively trading the forex market, take a step back and think about how you wantto approach the market. There is more to currency trading than meets the eye, and we think the trading style you choose is one of the most important determinants of overall trading success. This chapter takes you through the main points to consider as you define your own approach to trading currencies. We review the characteristics of some of the most commonly applied trading styles and discuss what they mean in concrete terms. We also run you through the essential elements of developing and sticking to a trading plan.Finding the Right Trading Style for You
We’re frequently asked, “What’s the best way to trade the forex market?” That’s a loaded question that seems to imply there’s a right way and a wrong way to trade currencies. Unfortunately, there is no easy answer. Better put, there is no standard answer — one that applies to everyone.
The forex market’s trading characteristics have something to offer every trading style (long-term, medium-term, or shortterm) and approach (technical, fundamental, or a blend). So in terms of deciding what style or approach is best suited to currencies, the starting point is not the forex market itself, but your own individual circumstances and way of thinking.
Real-world and lifestyle considerations
Before you can begin to identify the trading style and approach that works best for you, give some serious thought to what resources you have available to support your trading. As with many of life’s endeavors, when it comes to financial-market trading, there are two main resources that people never seem to have enough of: time and money. Deciding how much of each you can devote to currency trading helps to establish how you pursue your trading goals.
If you’re a full-time trader, you have lots of time to devote to market analysis and actually trading the market. But because currencies trade around the clock, you still have to be mindful of which session you’re trading, and of the daily peaks and troughs of activity and liquidity. (See Chapter 1 for trading session specifics.) Just because the market is always open doesn’t mean it’s necessarily always a good time to trade. If you have a full-time job, your boss may not appreciate your taking time to catch up on the charts or economic data reports while you’re at work. That means you’ll have to use your free time to do your market research. Be realistic when you think about how much time you’ll be able to devote on a regular basis, keeping in mind family obligations and other personal circumstances.
When it comes to money, we can’t stress enough that trading capital has to be risk capital and that you should never risk any money that you can’t afford to lose. The standard definition of risk capital is money that, if lost, will not materially affect your standard of living. It goes without saying that borrowed money is not risk capital — you should never use borrowed money for speculative trading. When you determine how much risk capital you have available for trading, you’ll have a better idea of what size account you can trade and what position size you can handle. Most online trading platforms typically offer generous leverage ratios that allow you to control a larger position with less required margin. But just because they offer high leverage doesn’t mean you have to fully utilize it.
Making time for market analysis
The amount of data and news that flows through the forex market on a daily basis can be truly overwhelming. So how can an individual trader possibly keep up with all the data and news? The key is to develop an efficient daily routine of market analysis. Thanks to the Internet and online currency brokerages, independent traders can access a variety of information. Your daily regimen of market analysis should focus on: Overnight forex market developments: Who said what, which data came out, and how the currency pairs reacted. Daily updates of other major market movements over the prior 24 hours and the stories behind them: If oil prices or U.S. Treasury yields rose or fell substantially, find out why. Data releases and market events (for example, the retail sales report, Fed speeches, central bank rate announcements) expected for that day: Ideally, you’ll monitor data and event calendars one week in advance, so you can be anticipating the outcomes along with the rest of the market.
Multiple-time-frame technical analysis of major currency pairs: There is nothing like the visual image of price action to fill in the blanks of how data and news affected individual currency pairs. Current events and geopolitical themes: Stay abreast on issues of major elections, political scandals, military conflicts, and policy initiatives in the major currency nations.
Technical versus fundamental analysis
Ask yourself on what basis you’ll make your trading decisions — fundamental analysis or technical analysis? Fundamentals are the broad grouping of news and information that reflects the macroeconomic and political fortunes of the countries whose currencies are traded. Most of the time, when you hear someone talking about the fundamentals of a currency, he’s referring to the economic fundamentals. Economic fundamentals are based on:
Economic data reports Interest rate levels Monetary policy International trade flows International investment flows. The term technicals refers to technical analysis, a form of market analysis most commonly involving chart analysis, trend-line analysis, and mathematical studies of price behavior, such as momentum or moving averages, to mention just a couple. We don’t know of too many currency traders who don’t follow some form of technical analysis in their trading. Even the stereotypical seat-of-the-pants, trade-your-gut traders are likely to at least be aware of technical price levels identified by others.
If you’ve been an active trader in other financial markets, chances are, you’ve engaged in some technical analysis or at least heard of it. Followers of each discipline have always debated which approach works better. Rather than take sides, we suggest following an approach that blends the two disciplines. In our experience, macroeconomic factors such as interest rates, relative growth rates, and market sentiment determine the big-picture direction of currency rates. But currencies rarely move in a straight line, which means there are plenty of shortterm price fluctuations to take advantage of — and some of them can be substantial.
Technical analysis can provide the guideposts along the route of the bigger price move, allowing traders to more accurately predict the direction and scope of future price changes. Most important, technical analysis is the key to constructing a welldefined trading strategy. For example, your fundamental analysis, data expectations, or plain old gut instinct may lead you to conclude that USD/JPY is going lower. But where exactly do you get short? Where do you take profit, and where do you cut your losses? You can use technical analysis to refine trade entry and exit points, and to decide whether and where to add to positions or reduce them. Sometimes forex markets seem to be more driven by fundamental factors, such as current economic data or comments from a central bank official. In those times, fundamentals provide the catalysts for technical breakouts and reversals.
At other times, technical developments seem to be leading the charge — a break of trend-line support may trigger stop-loss selling by market longs and bring in model systems that are selling based on the break of support. Subsequent economic reports may run counter to the directional breakout, but data be damned — the support is gone, and the market is selling. Approaching the market with a blend of fundamental and technical analysis improves your chances of both spottingtrade opportunities and managing your trades more effectively. You’ll also be better prepared to handle markets that are alternately reacting to fundamental and technical developments or some combination of the two.
Different Strokes for Different Folks
After you’ve given some thought to the time and resources you’re able to devote to currency trading and which approach you favor (technical, fundamental, or a blend), the next step is to settle on a trading style that best fits those choices. There are as many different trading styles and market approaches in FX as there are individuals in the market. But most trading styles can be grouped into three main categories that boil down to varying degrees of exposure to market risk. The two main elements of market risk are time and relative price movements. The longer you hold a position, the more risk you’re exposed to.
The more of a price change you’re anticipating, the more risk you’re exposed to.In the next few sections we detail the three main trading styles and what they really mean for individual traders. Our aim here is not to advocate for any particular trading style, because styles frequently overlap, and you can adopt different styles for different trade opportunities or different market conditions. Instead, our goal is to give you an idea of the various approaches used by forex market professionals so you can understand the basis of each style.
Short-term, high-frequency day trading
Short-term trading in currencies is unlike short-term trading in most other markets. A short-term trade in stocks or commodities usually means holding a position for a day to several days at least. But because of the liquidity and narrow bid/offer spreads in currencies, prices are constantly fluctuating in small increments. The steady and fluid price action in currencies allows for extremely short-term trading by speculators intent on capturing just a few pips on each trade. Short-term forex trading typically involves holding a position for only a few seconds or minutes and rarely longer than an hour. But the time element is not the defining feature of shortterm currency trading. Instead, the pip fluctuations are what’s important.
Traders who follow a short-term trading style are seeking to profit by repeatedly opening and closing positions after gaining just a few pips, frequently as little as 1 or 2 pips. In the interbank market, extremely short-term, in-and-out trading is referred to as jobbing the market; online currency traders call it scalping. (We use the terms interchangeably.) Traders who follow this style have to be among the fastest and most disciplined of traders because they’re out to capture only a few pips on each trade. In terms of speed, rapid reaction and instantaneous decision-making are essential to successfully jobbing the market. When it comes to discipline, scalpers must be absolutely ruthless in both taking profits and losses. If you’re in it to make only a few pips on each trade, you can’t afford to lose much more than a few pips on each trade.
Jobbing the market requires an intuitive feel for the market. (Some practitioners refer to it as rhythm trading.) Scalpers don’t worry about the fundamentals too much. If you were to ask a scalper for her opinion of a particular currency pair, she would be likely to respond along the lines of “It feels bid” or “It feels offered” (meaning, she senses an underlying buying or selling bias in the market — but only at that moment). If you ask her again a few minutes later, she may respond in the opposite direction. Successful scalpers have absolutely no allegiance to any single position. They couldn’t care less if the currency pair goes up or down. They’re strictly focused on the next few pips.
Their position is either working for them, or they’re out of it faster than you can blink an eye. All they need is volatility and liquidity. Retail traders are typically faced with bid/offer spreads of between 2 and 5 pips. Although this makes jobbing slightly more difficult, it doesn’t mean you can’t still engage in shortterm trading — it just means you’ll need to adjust the risk parameters of the style. Instead of looking to make 1 to 2 pips on each trade, you need to aim for a pip gain at least as large as the spread you’re dealing with in each currency pair. Theother basic rules of taking only minimal losses and not hanging on to a position for too long still apply. Here are some other important guidelines to keep in mind when following a short-term trading strategy:
Trade only the most liquid currency pairs, such as EUR/USD, USD/JPY, EUR/GBP, EUR/JPY, and EUR/CHF.The most liquid pairs have the tightest trading spreads and fewer sudden price jumps.
Trade only during times of peak liquidity and market interest. Consistent liquidity and fluid market interest are essential to short-term trading strategies. Market liquidity is deepest during the European session when Asian and North American trading centers overlap with European time zones — about 2 a.m. to noon Eastern time (ET). Trading in other sessions can leave you with far fewer and less predictable short-term price movements to take advantage of.
Focus your trading on only one pair at a time. If you’re aiming to capture second-by-second or minute-by-minute price movements, you’ll need to fully concentrate on one pair at a time. It’ll also improve your feel for the pair if that pair is all you’re watching.Preset your default trade size so you don’t have to keep specifying it on each deal. Look for a brokerage firm that offers click-and-deal trading so you’re not subject to execution delays or requotes. Adjust your risk and reward expectations to reflect the dealing spread of the currency pair you’re trading.
With 2- to 5-pip spreads on most major pairs, you probably need to capture 3 to 10 pips per trade to offset losses if the market moves against you. Avoid trading around data releases. Carrying a shortterm position into a data release is very risky because prices can gap sharply after the release, blowing a shortterm strategy out of the water. Markets are also prone to quick price adjustments in the 15 to 30 minutes ahead of major data releases as nearby orders are triggered. This can lead to a quick shift against your position that may not be resolved before the data comes out.
Medium-term directional trading
Medium-term positions are typically held for periods ranging anywhere from a few minutes to a few hours, but usually not much longer than a day. Just as with short-term trading, the key distinction for medium-term trading is not the length of time the position is open, but the amount of pips you’re seeking/risking. Where short-term trading looks to profit from the routine noise of minor price fluctuations, almost without regard for the overall direction of the market, medium-term trading seeks to get the overall direction right and profit from more significant currency rate moves.
Almost as many currency speculators fall into the mediumterm category (sometimes referred to as momentum trading and swing trading) as fall into the short-term trading category. Medium-term trading requires many of the same skills as short-term trading, especially when it comes to entering/ exiting positions, but it also demands a broader perspective, greater analytical effort, and a lot more patience.
Capturing intraday price moves for maximum effect
The essence of medium-term trading is determining where a currency pair is likely to go over the next several hours or days and constructing a trading strategy to exploit that view. Medium-term traders typically pursue one of the following overall approaches, with plenty of room to combine strategies:
Trading a view: Having a fundamental-based opinion on which way a currency pair is likely to move. View trades are typically based on prevailing market themes, like interest rate expectations or economic growth trends. View traders still need to be aware of technical levels as part of an overall trading plan.
Trading the technicals: Basing your market outlook on chart patterns, trend lines, support and resistance levels, and momentum studies. Technical traders typically spot a trade opportunity on their charts, but they still need to be aware of fundamental events, because they’re the catalysts for many breaks of technical levels.
Trading events and data: Basing positions on expected outcomes of events, like a central bank rate decision or a G7 meeting, or individual data reports. Event/data traders typically open positions well in advance of events and close them when the outcome is known.
Trading with the flow: Trading based on overall market direction (trend) or information of major buying and selling (flows). To trade on flow information, look for a broker that offers market flow commentary, like that found in FOREX.com’s Forex Insider (www.forex.com/forex_research.html). Flow traders tend to stay out of shortterm range-bound markets and jump in only when a market move is under way.
When is a trend not a trend?
When it’s a range. A trading range or a range-bound market is a market that remains confined within a relatively narrow range of prices. In currency pairs, a short-term (over the next few hours) trading range may be 20 to 50 pips wide, while a longer-term (over the next few days to weeks) range can be 200 to 400 pips wide. For all the hype that trends get in various market literature, the reality is that most markets trend no more than a third of the time.
The rest of the time they’re bouncing around in ranges, consolidating, and trading sideways. Although medium-term traders are normally looking to capture larger relative price movements — say, 50 to 100 pips or more — they’re also quick to take smaller profits on the basis of short-term price behavior. For instance, if a break of a technical resistance level suggests a targeted price move of 80 pips higher to the next resistance level, the medium-term trader is going to be more than happy capturing 70 percent to 80 percent of the expected price move. They’re not going to hold on to the position looking for the exact price target to be hit.
Long-term macroeconomic trading
Long-term trading in currencies is generally reserved for hedge funds and other institutional types with deep pockets. Long-term trading in currencies can involve holding positions for weeks, months, and potentially years at a time. Holding positions for that long necessarily involves being exposed to significant short-term volatility that can quickly overwhelm margin trading accounts. With proper risk management, individual margin traders can seek to capture longer-term trends. The key is to hold a small enough position relative to your margin balance that you can withstand volatility of as much as 5 percent or more.
Carry trade strategies
A carry trade happens when you buy a high-yielding currency and sell a relatively lower-yielding currency. The strategy profits in two ways: By being long the higher-yielding currency and short the lower-yielding currency, you can earn the interestrate differential between the two currencies, known as the carry. If you have the opposite position — long the low-yielder and short the high-yielder — the interest-rate differential is against you, and it is known as the cost of carry.
Spot prices appreciate in the direction of the interestrate differential. Currency pairs with significant interestrate differentials tend to move in favor of the higheryielding currency as traders who are long the high yielder are rewarded, increasing buying interest, and traders who are short the high yielder are penalized, reducing selling interest. So let me get this straight, you may be thinking: All I have to do is buy the higher-yielding currency/sell the lower-yielding currency, sit back, earn the carry, and watch the spot price move higher? What’s the catch?
The catch is that downside spot price volatility can quickly swamp any gains from the carry trade’s interest-rate differential. The risk can be compounded by excessive market positioning in favor of the carry trade, meaning a carry trade has become so popular that everyone gets in on it. Figure 3-1 illustrates the trending price gains of a carry trade, punctuated by sudden price setbacks. Carry trades usually work best in low-volatility environments, meaning when financial markets are relatively stable and investors are forced to chase yield. Keep in mind that carry trades need to have a significant interest-rate differential between the two currencies (typically more than 2 percent) to make them attractive. And carry trades are definitely a longterm strategy, because depending on when you get in, you may get caught in a downdraft that could take several days or weeks to unwind before the trade becomes profitable again.
Developing a Disciplined Trading Plan
No matter which trading style you decide to pursue, you need an organized trading plan, or you won’t get very far. The differencebetween making money and losing money in the forex market can be as simple as trading with a plan or trading without one. A trading plan is an organized approach to executing a trade strategy that you’ve developed based on your market analysis and outlook. Here are the key components of any trading plan: Daily NZD/JPY Carry trades can see significant spot price gains punctuated by rapid price reversals.
Determining position size: How large a position will you take for each trade strategy? Position size is half the equation for determining how much money is at stake in each trade.
Deciding where to enter the position: Exactly where will you try to open the desired position? What happens if your entry level is not reached?
Setting stop-loss and take-profit levels: Exactly wherewill you exit the position, both if it’s a winning position (take profit) and if it’s a losing position (stop loss)? Stoploss and take-profit levels are the second half of the equation that determines how much money is at stake in each trade. That’s it — just three simple components. But it’s amazing how many traders, experienced and beginner alike, open positions without ever having fully thought through exactly what their game plan is.
Of course, you need to consider numerous finer points when constructing a trading plan. But for now, I just want to drive home the point that trading without an organized plan is like flying an airplane blindfolded — you may be able to get off the ground, but how will you land? And no matter how good your trading plan is, it won’t work if you don’t follow it. Sometimes emotions bubble up and distract traders from their trade plans. Other times, an unexpected piece of news or price movement causes traders to abandon their trade strategy in midstream, or midtrade, as the case may be. Either way, when this happens, it’s the same as never having had a trade plan in the first place.
Developing a trade plan and sticking to it are the two main ingredients of trading discipline. If we were to name the one defining characteristic of successful traders, it wouldn’t be technical analysis skill, gut instinct, or aggressiveness — though they’re all important. Nope, it would be trading discipline. Traders who follow a disciplined approach are the ones who survive year after year and market cycle after market cycle. They can even be wrong more often than right and still make money because they follow a disciplined approach.
Taking the Emotion Out of Trading
If the key to successful trading is a disciplined approach — developing a trading plan and sticking to it — why is it so hard for many traders to practice trading discipline? The answer is complex, but it usually boils down to a simple case of human emotions getting the better of them. Don’t underestimate the power of emotions to distract and disrupt. So exactly how do you take the emotion out of trading? The simple answer is: You can’t. As long as your heart is pumping and your synapses are firing, emotions are going to be flowing. And truth be told, the emotional highs of trading are one of the reasons people are drawn to it in the first place. There’s no rush quite like putting on a successful trade and taking some money out of the market. So just accept that you’re going to experience some pretty intense emotions when you’re trading. The longer answer is that because you can’t block out the emotions, the best you can hope to achieve is understanding where the emotions are coming from, recognizing them when they hit, and limiting their impact on your trading. It’s a lot easier said than done, but keep in mind some of the following to keep your emotions in check:
Focus on the pips and not the dollars and cents. Don’t be distracted by the exact amount of money won or lost in a trade. Instead, focus on where prices are and how they’re behaving. The market has no idea what your trade size is and how much you’re making or losing, but it does know where the current price is. It’s not about being right or wrong; it’s about making money. The market doesn’t care if you were right or wrong, and neither should you. The only true way of measuring trading success is in dollars and cents.
You’re going to lose in a fair number of trades. No trader is right all of the time. Taking losses is as much a part of the routine as taking profits. You can still be successful over time with a solid risk-management plan.

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