Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – School’s Over! Now What?

So now you’ve finished the School of Pipsology. Are you ready to step into the real trading world? Before you enter the wild and wacky world of forex, we believe that it’s always important to give back and help out in the community.

Drop by the BabyPips.com forums and you’ll find the coolest cats in the forex community. Meet other rookie traders in Newbie Island. Brush up on your fundamental analysis by strolling through Fundamentalville. Join the search for the “Holy Grail” trading system and learn to live like rockstars just like our honorary FX-Men!

Absorb as much as you can and learn from your fellow traders. Remember, it’s better to check and educate yourself before you wreck yourself!

Next, get to know the successful graduates of the School and find out what they’re up to now.

Cyclopip

Back in High School, we talked about how currency crosses present more trading opportunities as well as cleaner trends and ranges. Lucky for you, we’ve got the guy (err… monster) who’s an expert in trading those cross-currency pairs. Cyclopip may have just one eye but it’s pretty darn sharp when it comes to spotting big winners on the crosses!

Have we mentioned that Cyclopip is also our resident sports fanatic? You see, back in the day when his ale belly was barely visible, Cyclopip was the reigning MVP of the CBA (Caveman Basketball Association). So if you dig currency crosses or hoops, make sure you check out Cyclopip’s Currency Cross-Eyed trading blog because this superstar sure knows how to make it rain buckets and pips!

 

Happy Pip

 

If you need proof that diamonds aren’t always a girl’s best friend, look no further than Happy Pip, our lady trader for commodity-related currencies or comdolls! This Daisy Dukes-lovin’ party girl gets her kicks by watching gold and oil, especially if she spots good trades on her favorite Aussie, Loonie, and Kiwi pairs.

Not a lot of people know this, but Happy Pip used to be a cheerleader back in high school. That should explain the huge smile that’s always on her face! She even gets to do her “happy dance” if she wins a trade on her Playing with Comdolls blog. If you need somebody to perk up your day, make sure you go Happy Pip’s way!

 

Huck

The youngest in the bunch is Huck, a young barista and part-time forex trader. She normally has her hands full just like all you yuppies out there, but luckily, she was able to find time to develop her own HLHB mechanical trading system!

Since she still considers herself a newbie in the forex world, Huck decided to stick with the major currency pairs first. Don’t underestimate her though. She is fully capable of bagging hundreds of pips with her gutsy trade ideas! Check out her blog called “The Loonie Adventures of a Forex Noob” and don’t hesitate to give her a shout out!

 

Queen Cleopiptra

Back in college, we talked about the importance of intermarket analysis. We told you that you should keep an eye on the dollar index, as well as intermarket correlations with commodities and equities.

Now, this won’t be easy at first, so we’ve invited Raghee Horner as a guest blogger and crowned her Queen Cleopiptra!

In her Chartology blog, Queen Cleopiptra discusses price action, chart setups, volatility, market cycles and the psychology as to why the markets move the way they do.

In addition, her Highness also talks about the gold, oil, the dollar index, and equity markets and their potential effect on overall risk sentiment and the forex market. If you wanna be the best at intermarket analysis, she’s the woman you need to go to!

 

Jack The Pipper

Ever turn on the tube and flip to the news channel and see that a billion dollar deal pushed through? Or that Company A bought out Company B for X kajillion euros? Ever wonder how it will affect the currency market?

Luckily for you, Jack “The Pipper” Crooks is here to tell us all about how moolah flows! In his Currency Currents blog, Jack focuses on the key factors that help drive the flow of global capital in and out of equities, fixed incomes markets, commodities and currencies.

So never fear, Jack’s got yo’ back! Once you understand what makes the world of money go round, some of that cash will flow right into yo lil’ piggy bank!

 

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Be Patient. Stay Disciplined.

Patience.

It’s a virtue…Especially in trading.

Arnold H. Glasgow, an American humorist, once said, “The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.”

Developing your trading plan will take time. Developing skills will take time.

Waiting for the right trades requires patience. Entering and exiting a trade at the right moment requires patience.

Discipline.

Discipline is also a virtue, and it means doing the things you need to do to progress and get better….even if you don’t want do it.

This means preparing for each trading day or week with research and chart study.

If you’re a mechanical or automated trader, this means back testing systems and constantly trying different settings and strategies as the environment changes.

And of course, don’t forget about keeping a trade journal and reviewing every single day you trade.

Journaling is the one trading task that separates the wannabe traders from the real deal traders. Unfortunately, most newbies won’t do it.

Trading concepts and techniques are simple and easy to learn. What’s hard to learn is how to be patient and disciplined to do the right things and make good trading decisions. Truthfully, it will be one of the most difficult endeavors you will ever take on.

To a newbie, sitting on the sidelines and watching the markets move while you wait for your best setups means you’re missing out on profits.

This way of thinking leads to a failure of patience and discipline and causes some of the most notorious trading mistakes in the book:

• Impulse trades
• Letting losers run too long
• Cutting winners too quickly
• Revenge trades

These actions will kill your account!

Remember that your job as a newbie is to learn how to make good trading decisions and SURVIVE!

The best thing you can do to stay patient and disciplined is to look at your career as a trader as a marathon and NOT a sprint.

This is not an overnight, get-rich-quick scheme.

This is a commitment to build skills that will allow you to profitably trade in any environment the market will throw at you at any time.

And essentially, free you from the chains of the “Man.” Fight the Power!!

If you stay patient, maintain discipline, and commit to constant improvement, then your results today as a forex noob will probably be nothing compared to the results of the trader you will become after years grinding it out in the markets.

Another thing….

Always remember that opportunities for good trades occur ALMOST EVERY SINGLE DAY!

No need to rush into bad trades. They will only set you back from reaching your goals.

Stick to your best ideas and setups, and if they don’t come that session, just wait for the next.

Unless the world stops trading currencies (knock on wood) then there will always be opportunities around the corner.

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Focus on the Process. Not on the Profits.

We’ve made the School of Pipsology as easy and fun as we could to help you learn and understand the basic tools used by forex traders all over the world, but remember that a tool is only as good as its handler.

A painting does not become a beautiful masterpiece by the brush alone. It’s the vision and skillful hand of a painter that creates a work of art.

A football doesn’t find its way to the end zone by itself. It is the quarterback’s ability to read a defense, position his players accordingly, and send the football to the right spot at the right time.

It’s not the “ridiculously awesome” indicator, the Cowabunga system, or the “super duper” strategy that gets your account in the black at the end of the year.

It’s your ability to read the market, execute the correct strategy for that particular situation, and consistently apply risk management techniques that hopefully gets you more profitable wins than losses in the long run.

Like in art, sports, or any performance endeavor, trading is a multi-faceted skill. The tools alone won’t make you successful.

A dedicated effort towards education and application of what you learn, as well as the constant review of your performance is the only path to success.

In the beginning, that process of learning and deliberate practice should be your main focus, NOT the profits.

Continuing with the basketball analogy, if your goal was to reach the NBA, would you get to the level of performance you desired by playing games only?

Or would you develop faster by focusing on physical conditioning, developing different skills (a jumpshot, dribbling, footwork, passing, etc.) in practice, as well as playing games?

Probably the latter right?

If you went straight to the NBA without any training, do you think you’ll score many points or win games?

Nope. We didn’t think so.

Learn the market. Learn trading techniques and high probability setups/systems.

Learn how to manage risk with proper position sizing and stop losses.

Learn how to put it all together in DEMO.

Then record and review your progress constantly at MeetPips.com.

Over time, this process will lead you to a method or system that works for YOU and that’s when your winning trades begin to outweigh your losing trades.

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Binary Options vs. Spot Forex

Binary options trading has long existed over-the-counter, only experiencing a massive growth spurt in the last few years. Now, approximately 90 companies (including those who white label their products) offer some sort of binary options trading service.

So okay, it’s a growing industry… But why should you involve yourself in it? Why should you learn a whole new type of trading when you’re already learning spot forex? Isn’t it better to something you already know?

There are many advantages and disadvantages to both binary options and spot forex. We’ll touch upon a few and hopefully, you can determine which trading instrument may be right for your trading style.

Max Risk

One of the great things about binary options trading is that you always know the exact maximum gain or loss in advance. The trader controls the premium at risk to enter the binary option trade, and that is the only amount that can absolutely be lost. Most binary option brokers even allow you to cut your max loss by “folding” your trades ahead of expiration after certain types of trade conditions have been met.

In contrast, with spot forex, even with a stop loss order set, you cannot be 100% certain that you will lose only the pre-calculated amount that you risked. While improbable, there’s always the chance that certain issues may affect your final max risk like slippage, lack of liquidity to execute a stop order at the desired price, a broker’s trading platform goes down, etc.

Trade Management Flexibility and Maximizing Reward

Aside from High/Low options, many of the binary option plays are only available at certain times of the day or week, and most times the strike prices are set by the broker.

Even if you have an idea of how a market might behave within a certain time frame, you may not have the best option available to you to play your idea. With spot forex, you are able to enter limit orders for any price or execute a market order at any time during open market hours.

In terms of exiting open trades, some binary options brokers allow you to close options trades early, but usually only after a predetermined amount of time has pass after the option trade has opened and before it closes.

And as mentioned before, the value that is returned to the trader is based on whether the market is in-the-money or out-of-the-money and of course, with a piece going to the broker.

In spot forex, you can close your trade at any time (except on weekends with most brokers). Even if it’s one second into the trade, you can get out and book profits or reduce losses.

Finally, if you think there’s going to be a long trend and you want to maximize your profit on it by holding it as long as possible, you can do so in the spot market using scaling in and trailing stop techniques. With a binary option, the expiration date and cap on profits limits you; you’re out of the trade as soon as you close or the option expires.

Depending on your risk and trade management preferences, either trading instrument can be good or bad depending on how much time you want to spend in front of your trading platform, how active you want to be, or what you expect the market may do.

Transaction Costs

In binary options trading, there are no additional transaction costs other than what is normally factored into the final payout.

In spot forex, the transaction cost comes in the form of a spread, a commission, or both. We’ve already discussed this in a previous chapter, but feel free to revisit the lesson and read up on it again.

Trade Choices

Another great thing about binary options trading is that you aren’t limited to just currency pairs like with most retail forex brokers. While currency pairs are the most common assets you can trade, with some binary options brokers, you may also have the opportunity to trade your ideas on a limited number of individual stocks, stock indices, and even commodities.

Volatility Risk

Surprise volatility is not usually an issue in binary options trading. Any trade you take can weather the volatility caused by certain events. Provided that your view turns out to be correct, you don’t need to worry about the market’s knee-jerk reactions. The max risk is still set, but so is the max reward.

In spot forex, however, sharp swings can affect the value of a position greatly and very quickly, which makes the additional task of setting up proper risk management processes very important.

Trader Error

The margin for error when entering a trade is very small in binary options trading. This is due to the fact there are only two actions to take with binary options: open and close.

There are no limit orders to keep track of, or to close or adjust. In spot forex, an inattentive trader may forget to place exit and/or adjustment orders, potentially creating a loss greater than he/she intends.

Best Cash Back Forex Rebates : Learn How to Trade Forex: Foreign Exchange (FX) Currency Trading – Market Analysis for Binary Options

Remember back when you enrolled yourself into the School of Pipsology, we talked about “The Big Three” types of market analysis. In case you forgot, they are:

1. Fundamental Analysis
2. Technical Analysis
3. Sentiment Analysis

Why are we bringing this up again? Well, the good news is that these building blocks of analysis can also be used when trading binary options!

Fundamental Analysis

Trading the News

One way to make use of fundamental analysis would be to go with a trade-the-news strategy. If you’ve gone through our lesson on this trading strategy, you would know that this is best applied to those events that usually cause a ton of volatility. The spike in volatility tends to lead to fast moves which can send price rocketing higher or plunging lower.

For binary options, this can be particularly effective when you trade simple Up/Down options. After all, you would simply need to get an idea how price may react to better/worse than expected data and how strong the reaction may be. You just have to be confident that price can reach the strike price of the option that you bought.

For example, you plan to trade the Australian retail sales report. Let’s say you have a bullish bias on the results. Chances are that a better-than-expected result will spur the Aussie to new highs, so you would look to buy a “call” option on AUD/USD.

Now let’s say that, as you expected, we saw a better-than-expected result. Luckily, AUD/USD also rose, rising above the strike price. Paycheck time, baby!

Of course, there are a couple of factors to take into consideration when playing the news.

First is the potential for volatility. When playing a news report and buying a binary option, you have to be fairly confident that the event will spark enough volatility so that price can reach the strike price and stay above/below that level. If you try trading a report that rarely causes a ripple, you’ll be throwing money down the drain.

Second, you have to factor in the time component of binary options. Remember, for the simple Up/Down options, price has to be above or below the strike price at the expiration date.

When trading binary options and implementing a trade-the-news strategy, you may also want to consider going with one-touch options since price would only have to touch and not necessarily close at a particular level.

You can also try the Out of Range options if you expect the price to move with strong momentum away from its previous range. With this option you don’t have to pick a direction, just decide whether or not the market will move big time in one direction or another.

Technical Analysis

Love using those fancy-schmancy indicators like moving averages, Bollinger bands, and Stochastic? Don’t be afraid to slap these indicators on your trading charts when you plan to trade binary options!

Remember, these indicators help you gauge where price action may be headed next. These are used across all sorts of trading markets and not just spot currencies. Just make sure you have a good understanding of how each indicator works before incorporating it into your analysis.

Studying technical levels and inflection points may also prove helpful when you trade binary options.

Let’s take a look at this example on GBP/USD.

Price has just broken down from a double top. With this behavioral pattern, price normally continues to trade lower at a distance equivalent to the height of the double top.

One way you could play this is by taking a One-Touch trade. If the strike price that your broker offers is somewhere between 1.5450-1.5550, which is within the height of the double top, buying a “put” option might be a setup worth considering.

Sentiment Analysis

Sentiment analysis is the task of measuring the market’s current “feeling” with regards to broad risk flows. Are traders confident in buying up risky assets or would they rather reduce risk by buying safe-haven assets or going into cash? This type of analysis will prove to be particularly useful when trying to hop on trends.

Will EUR/USD break for new highs? Or do you think the trend is overdone and there’s not enough momentum? You can use sentiment analysis to gauge how the market is feeling.

If it seems that risk appetite is still at a high with no potential changes to the market themes in sight, then the chances are we could see the trend continue. If you’re fairly confident that market sentiment will favor a risk-on environment, you could consider purchasing a “call” option on a risk currency or asset (e.g., Australian or New Zealand Dollar, Equities, Commodities, etc.)

On the flip side, if you think a reversal in sentiment is in play and depending on how overdone you believe the move is, you could consider purchasing a “put” option on those same risk currencies or assets.

Combination

Just as in spot forex trading, it’s not necessarily a case of choosing which type of analysis you’re going to use because they’re not mutually exclusive.

In fact, you can combine all of these types of analysis to form the basis of any trade that you take. Fundamentals can help give you a bias as to what direction you want to take, while technical analysis will help determine the chances of the market reaching, breaking and finding support/resistance at a certain price. Meanwhile, sentiment analysis may let you know whether the market is in a risk-on or risk-off mood.

In the end, the key is for you to learn from all your mistakes and gain experience. Over time, this process will help you fine tune your analysis and help you develop good trading practices.
source: www.babypips.com

 

 

 

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