Forex Education Blog

Minimizing Risk

The Forex market is an exciting market with a high degree of potential returns, but risk and reward exist here as it does in any other investment venture. I like to call the potential reward as ‘Where I am right’ and the risks as ‘Where I am wrong.’

The first thing I consider on any trade is ‘at what price am I wrong?’ Knowing where my analysis is wrong gives me my total risk. Next is to consider ‘where am I right?’ Knowing ‘where I am wrong’ and ‘where I am right’ helps me to minimize risks by only taking trades that give me a strong risk to reward ratio.

Bottom line: Knowing where my trade is wrong gives me the ability to minimize and manage risk.

To learn more about managing risk vs. reward, attend a free trading demonstration with MTI.

Currency Trading for Beginners

Currency trading education can cover a lot of territory. To learn currency trading, the new student should start out by understanding the broader concepts first. Here are answers to three of the more basic questions:

What is forex?
Forex refers to the foreign exchange market. Forex is the global market in which one nation’s currency is exchanged for another. Simply put, it’s money trading. Forex is the only market in the world that trades strictly in currencies. When visitors to another country exchange the currency of their own country for the local currency, they are trading the forex on a very basic level.

Who trades in currencies?
People who professionally trade money or currencies are referred to as foreign exchange traders, forex traders or currency traders. It is their goal to exchange money for profit. More monetary wealth changes hands in forex than any other market – literally trillions per day. Forex traders work in a market that literally trades 24 hours a day, 7 days a week. The forex allows more potential for profit than any other market, due to this round-the-clock accessibility. Until recently, the forex was only available to banks, government agencies and large corporations. Today, anyone can participate in currency trading. Of the many markets in which to trade, forex currently represents the most wealth-building potential. Any professional trader will tell you that the key to unlocking that potential starts with a clear understanding of the market. Every successful forex trader was a beginner at some point in their past.

How can I learn forex currency trading?
In order to learn to trade forex, one must grasp the basics and build from there. Finding a good education resource will pay off in the long run. Once the beginner gets answers to some basic questions and wants to learn more, he or she will need to consider comprehensive forex education sources to further his or her understanding. Since learning directly from a professional forex trader is not always practical, reading books written by professional traders is an excellent way to get started. Professional forex traders often write of their trading experiences and can provide great insight and knowledge. Education in forex involves more than just reading books, so the next tier is gaining experience. Each step of learning the forex is dependent on completely understanding the previous steps.

Market Traders Institute is committed to educating the forex trader in all aspects of foreign currency trading. Get information on a free forex webinar to help you maximize your success in the forex market.

Forex Trading 101

Learning the basics of forex trading is a bit like going back to school. There are new words and concepts to learn and understand in forex education. Learning to trade the forex involves homework, and lots of it. The forex student needs to learn what the forex market is and understand its behavior before entering into the trading aspect. Books and the Internet are excellent places to start in figuring out what makes the forex market tick. The best sources are those that are able to teach knowledge without over-complicating, over-simplifying or making it seem boring.

Eventually, a new student to forex should try to go beyond reading at some point and begin practicing on the forex market. Practicing the lessons from all that reading is key to learning forex trading. One of the ways to apply the lessons is to trade on the actual forex market. An alternative to trading on the actual forex market is participating in simulated trading. Simulated trading allows the student to apply what they have learned during real-time market moves without risking their own money.

For this, the forex demo is vital to help the beginner learn about forex trading. This is where the rubber meets the road. New forex students can trade the markets without risk by using a forex demo account. A demo for forex is a virtual account especially designed to simulate trading in real-time – as the market is actually moving. Demos are great for testing and practicing trading strategies without risking any capital. Since practice makes perfect, a demo is the best way to learn!

Forex trading education can teach the student what causes the market to behave the way it does and how to take advantage of these moves. Most important of these is how to turn this knowledge into real skill. When learning a new skill, equal time should be given to studying as well as practicing. Forex trading is no different. A forex demo gives the student a chance to learn the skill of trading without suffering losses. It can also help the forex student develop confidence in trading the markets through repetition. Building a confident, successful forex trader is the ultimate goal of the dedication, education and practice of learning the forex.

Market Traders Institute is committed to educating the forex trader in all aspects of foreign currency trading. Get information on a free forex webinar to help you maximize your success in the forex market.

USD vs. GBP in Recent Months

Years from now, we may look back and view the last few weeks as the true bottom for the Green Back and the end of an almost 1 year slide against the Euro. After three weeks of dollar strength, the Euro attempted to fight back but found itself helpless to resist the power of the USD. The recent rate hike may solidify the dollar’s place as the world’s safe haven against economic diversity, a position that has been held by the GBP for the last 16 months.

This insurgence of USD strength has shaken the foundation of many currencies in the market, but perhaps none more than the Euro. In two and a half months, the Euro has slid almost 1700 Pips with no sustainable retracement in sight.  Look for the Euro to try to fight back over the next 60 days, and hold on to as much positive sentiment as possible while the Dollar continues to steam roll the majors across the board. While I believe the Euro will put up a valiant fight, expect the Dollar to win the day.

Tips for Success

I have been with Market Traders for a couple of years now.  What I have found to be the most helpful is realizing that you’re not going to make money overnight.  To be successful in this market you have to treat it like anything else you are successful in.  You have to put in the time and effort it takes to master this market:

Learn something new every day.

Follow all of the rules to the “T” and don’t get frustrated.

The more you keep your emotions out of it, the better chance you have of success.

Continue your education. Take every class, webinar, workshop and training that you can find.  Your learning doesn’t stop after you finish the UTP -  it has just begun. Continue to sharpen your saw on a daily basis.

If you have an open mind and a great work ethic you will be a success, just like so many of our students and employees.

To find out more about MTI’s trading techniques, attend a live trading demonstration.

Make Time to Trade the Forex

Time.  Time is the one thing that none of us have, but we all want.  Time is what we make of it.  I used to think that there was never enough time in the day to trade and work.  Then I started winning a couple trades.  It is amazing how I created time when I started seeing that this was a worthwhile endeavor.  It really didn’t matter what time I woke up or what time I went to bed.  I was making pips, and pips were my focus!

I will tell you the secret to success right now: make time for what is important.  If you want to make money, make time for it.  If you want to become a trader, make time for it.  If you would like to be a family man, make time for it.  If you would like to be successful, make time for yourself.

To learn how to become a more educated and more profitable trader, make time to attend a live trading demonstration with MTI.

Success in the Forex

After wrapping up a great 2009 both in the Forex market and in my life personally, 2010 started on a very high note.  I received a call from a student of mine who I speak to on a weekly basis who called with some good news.  After going through the education for the past 9 months, my client Gerald came to the realization that this is something he can do full-time.

Gerald has been working at a job that is 8 hours from his family and obviously only get to see them sparingly each month.  We made a goal together to get him to a place in his life both financially and professionally that he could trade the Forex market as a full time job and return to be with his family.  I received the call and Gerald had a tone in his voice that I knew something was up.  He told me “Geoff… we did it.”   My gut reaction was, ‘OK, Gerald followed that strategy we talked about the week before and had another successful week of trading.’  So I asked, “How many pips did we capture Gerald?”  He started laughing and said, “No no no… We did it! I am putting my notice in at work and moving home with my family and will now be doing this full time.”

Receiving a call like this put the biggest smile on my face to know we set a goal and reached it a year before we thought we could.  Hearing the jubilation and the sense of relief in Gerald’s voice made me feel good.  Family is the number one thing in my life and something I take very seriously, so to know what Gerald was going through over the past few months and to know MTI played a big part in helping a family makes not only my career but my life that much more rewarding.

So congratulations to Gerald and to everyone who realizes with a goal and the right mindset anything can be accomplished.

To learn how to find success for yourself, attend one of MTI’s free trading demonstrations.

Why Forex?

I think the biggest beauty of this market is that it’s recession proof.  I spend a few hours a day talking to potential investors in the market about just that.  Many think that gold and silver are the way to go; however, gold has recently plummeted to $1046 and silver is trading around $15 an ounce.  It appears as though people are selling because they are scared.  In the Forex, you can make money in either direction Bullish or Bearish.

First things first, though. You need to actually determine market direction before you can find a proper entry and a proper exit points.  The Euro is in trouble, currently still in a 2 month downward spiral against the USD.  This is mostly fueled by Greece and Portugal’s economic troubles, which are not anywhere close to being resolved.   Portugal is only going to receive 60% of the bailout they asked for and Greece is looking at 2012 to bring their budget shortfall below the 3% mark, currently the are at 12.7%.  This just shows the euro has a long way to go and should continue to head to the south.

If you’d like to attend a live trading demonstration, please register for a webinar. Happy trading!

A Day in the Life of a Trader

So when I sat at my desk this morning, pulled up my MTI 4.0 Charting.  When you are trading USD/CAD, something that is very important is to take a look at the overall price movement of oil contracts.  For long term trading you should make certain that you understand any upcoming fundamental news announcements that could affect this pair’s movement.  Today I am looking for a short term movement to capture around 95 pips.

Seeing on a 120min. price chart this pair has recently been range-bound from late January to today.  Looking at the low of 1.0560 and a high of 1.0720, the pair has recently again tested the low of around 1.0570.  Looking at this from a perspective of a swing trader, the recent retracement from 1.0720 to the before mentioned low, leads me to believe that this pair may bounce before a continued move south.

By going long from this recent level of support, eliminates quite a bit of risk, however it still leaves the possibility of a loss.  But with proper risk/reward ratio, it is a risk I am willing to take.  Looking to risk around 60 pips to capture 90 pips leaves me still in a good position for profit.  While I cannot determine if this meets your requirements for a live position, in my overall analysis I see this is a risk I am willing to take.  The coupled screenshot gives you a visual understanding of what I saw when I placed this trade.  Remember traders, everyone has different trading styles and risk tolerance levels and that is why one should always look to further educate themselves as trading is not a fantasy but a formula.

Educational Specialist Commentary

Another good day yesterday trading.  I am taking a look at the USD/CHF and we do have some convergences, however around the 1.0686 price point for a shallow D extension.  I’m anticipating the USD/CHF to continue bearish and test the outer trend line around the 1.0500 price area.  If it does that then our conservative D extension will be shallower than the previous D convergences, which will be around 1.0670 at the .18 extension of the sub swing.  Lets make it another good week of trading.