Fixed Trail

As you all know that there is always a big risk of any trade that is placed into any open market. The novice traders of the market manage this risk by one methodology, whereas, the professional and skilled traders of the market adopt the totally different method.

There has always been a specific difference between both stakeholders. In the markets various technical indicators like, ‘Price Channels’, ‘ATR’ and PSAR are being used for managing risk , but in this article I am going to highlight a new way of managing risk . It is ‘Fixed Trailing Stops’. These ‘Fixed Trailing Stops’ are used to capitalize on to continued momentum in the trending markets.

Purpose of Fixed Trailing Stops

The ‘Fixed Trailing Stops’ have particularly designed for advancing a step forward a particular amount of pips when a position gets moved in your own favor. This ‘Fixed Trailing Stop’ could be very beneficial in the trending markets. It helps you for locking in profits on a broaden move. How work these ‘Fixed Trailing Stops?

Function of FIxed Trailing Stops

For explaining the functionality of ‘Fixed Trailing Stops’ I take an example of a currency pair USD v/s CAD with multiple lots. I will explain you how can ‘Fixed Trailing Stops’ work in your favor.

In the example chart a currency pair USDCAD has been entered to sell at 1.0308. This entry has been placed with 50 pips stop, at 1.0308 price levels, along with a ‘Fixed Trailing Stops’ to 50.
An entry for buying at 1.0208 levels has been placed as well, for balancing half of the position. What would happen now?

What Would Occur Now

If the currency pair USDCAD moves in your favor as per plan. Then look at your entry order .In case price touches at the price level of 1.0208 your first entry order for buying will be executed, because the order was set for buying back half of your net position. It means if your two trades’ 100k total, then your entry should be placed to offset at 50k.

The second part of the order will be your ‘Fixed Trailing Stop’. Suppose your trade moves in your favor by 50 pips, this will move your stop on your remaining position at 1.0258 levels. If the trade has been in your favor, then this order has a potential to trail further. Every time your currency pairs move 50 pips, your ‘Fixed Trailing Stop’ would move forward and continuing to lock with in this additional amount. If your position moves against you, the stop is made to close your trade at the new updated price.

So, you can use this philosophy of two lots on almost any king of trending graphs of any currency pair. The first set is designed for locking a pre-determined gain. The second set is designed as the trending component.

In case the market remains in trend position and makes a lower low, this lot would continue to trail, locking in profits. All the orders are placed on the basis of ticket by ticket.

Except the thinking that you are a huge financial institution or a bank, you will definitely need a trader for the purpose of trading currencies. All the traders demand a broker to trade in Forex market. This is an important step that should be taken prior to the time you start trading various currencies. This is not as difficult as there are large numbers of brokers in Forex market.
Yet all the brokers are not similar. You should find such a broker who has the capability to meet the specific needs in the role of a trader. Keep in mind that all the brokers do not provide same services and do not have similar policies also. This affects the ability of trading in an effective manner.
Five Important Broker Services
This list offered here consists of the basic services that a Forex trader who have just started trading will want from a broker. You should confirm with each broker that they offer these services. If they do not offer, you should look for any other broker.
Available Pairs of Currency
You should look for a broker who can deal the important currencies including CHF, AUD, EUR, CAD, JPY, USD and GBP. Obviously, you should not plan to trade all the currencies but only the important currencies should be provided by the broker.
The pairs of currency meant for trading can affect the ability to make an entry into the trades according to your choice. If a broker does not provide this service, move to another broker. You should not wait for a trader to include large number of currencies on the platform of trading.
Low Costs of Transaction
The costs of transaction are measured by pips number. A best way for determining the costs of transaction is to have a glance at pip spread. A good thumb rule is to examine EUR/USD spread. Make it a point that it does not cross five pips. If you find that it crosses five pips, you should immediately ask a broker regarding high costs of transaction or just choose another trader. The costs of transaction can affect profit directly so you have to consider the service in a serious manner.
RequirementOf Margin
Even if you might want to prevent utilizing margin, you will likely to utilize margin in the currency trading. Like the costs of transaction, the requirement of margin has to be very low. If the requirement of margin is low, you will have a great ability for high gains. The requirements of margin should not cross ten percent. Still, the dealers should be careful while utilizing margin and prevent using large number of leverage or margin. This is regarded as a big mistake that most of the traders commit. Utilize margin in a prudent manner and make sure to select broker that maintains the requirements of margin to minimum.
Requirement of Minimum Trading Size
There are various kinds of accounts offered by several brokers. The two general kinds of accounts are mini and standard. In the standard account, a dealer utilizes lots of nearly one lakhs units. On the other hand, in a mini account, lots are generally ten percent of the basic size. One of the most interesting things to be kept in mind is that margin for a mini account is about 200:1 which double the accessible margin of standard account is. However, the large leverage should be only used by an experienced trader.
Two different accounts carry various risk levels and potentials for gains. Mini account is perfect for the Forex traders who are new in trading as when the potential of profit is low, the amount of danger is lower. In fact, a dealer can easily open mini account with nearly three hundred dollar though two thousand dollar is suggested as minimum amount. Basic accounts are generally used for more skilled traders who will offer money to the accounts with nearly ten thousand dollar and more.
Hours of trading
Most of the brokers will align the hours of trading with several hours in the trading market. These timing is from 5:P.M on Sunday and 4:00 PM on Friday. You should confirm these timings before selecting a broker. If dealerdoes not trailthese hours, look for another broker.
Select Good Prospects
Several brokers will provide these elementary services. A trader who has just started trading should choose three brokers and compare it in a close manner from the basic five brokers to the arrival of trading stage. Taking enough time to look for a dealerwith whom you feel comfortable is important for the career in trading. One will have to spend large amount of time with the broker sothey have to demand services that are needed for trading in a successful manner. There are several Forex traders so spend enough time to look through a bunch and choose the correct one.
Fraudulent Dealers
With the increasing number of dealers in a market, the quality and number of services has also increased. On the other hand the totalunscrupulous dealers have also risen. Commodity Trading Commission has made a list of different signs that an individual or a company might be engaging in the fraudulent activity.

Several fresh and newcomer Foreign Exchange business people may enter market with wrong expectations of profits. This will lead to trading which are irresponsible and may even cause and will usually place the traders in a wrong or virtual mind frame.
Any way I will start by saying that best global Hedge Funds profit comes around 20% per year. Yes, only 20% annually. If you don’t trust me, then just go through the following link and you will be given all details.
http://www.eurekahedge.com/news/08_june_EH_May08_Absolute_Return_A_Comparative_Review_of_Recent_Hedge_Fund_Performance.asp
And now are we discussing about the professional people and the analysts with higher access to information.
Still, the internet comprise of 100% and plus returns annually. There is no wonder why new business people dream of getting wealthy in a couple of days or months.
But the thoughts of this kind can make an account alive. Thus newer traders should realize that any of the given method can only result in a particular rate of return. And this is achieved through forward testing of the strategy for about 6 months. In fact, I could say from my experience that even the best methods can’t exceed 15 to 25% return in a year.
I have been utilizing my strategy for several years now. And that’s why I know better that in the negative months, I have lost pips of around 50-100 where as in the positive months I got pips around 150 to 250.
This aided me much not to get into overtrading as my expectations of profit are in accordance with my method. If I was suspecting 600 pips per month, and my method produce monthly around 200 pips then I may overtrade in order to attain extra pips. But the thing is instead of gaining more; I will always used to suffer losses from the attempt of overtrading.
Furthermore, if you expect huge profits of Forex, then no doubt you may fell as a prey to scammers that will predict you to the world. This means that always the realistic expectations and dreams would serve as a best means of defense.
I really apologize if I have busted any here, but it is of course crucial to enter Forex world with realistic anticipations. This will definitely protect you from heart break and make you a good trader at last.

There are some key Fibonacci retrenchment levels that you must remember. This includes 23.6%, 38.2%, 50%, 61.8%, and 76.4%. From this list the important ones are 38.2%, 50%, and 61.8%. These important levels are included by default in the Fibonacci retrenchment software.

In case, your trading software doesn’t support any Fibonacci tools, then there is nothing to worry about. We have designed Fibonacci calculator for this purpose.
The Fibonacci retrenchment levels are being used by the traders as a part of resistance and support levels. Since, a majority of traders are using the same technique to sell or buy orders on the basis of which they either enter in a trade or make their stops. As a result of resistant and support levels, this technique really becomes valuable.
The most important Fibonacci extension levels are as follow: 38.2%, 50%, 61.8%, 100%, 138.2%, and 161.8%.
Extension and support levels are being used by the traders to set a target profit. Once again, as a majority of traders are following the same path to sell or buy then this technique becomes very valuable for everyone. It brings the results as expected.
To insert the Fibonacci levels effectively, a trader must be familiar with Swing high and low points.
Swing high works like a candlestick which contains a minimum of two inferior highs on the right and left side.
Swing low work like a candlestick that contains a minimum of two higher lows on the right and left side.
Using the Fibonacci tools can increase a trader’s chance of winning through resistance levels, candlestick patterns, and trend lines for making an entry or stop.

To find forex strategy isn’t a very easy task. This depends on several factors that need to be sewed to individual trader.

First query one must ask, is what you need to get away from forex trading?
You involved as an investor or day trader?

Suppose you are participating as an investor, then your goal should be long-term stability than short-term profits. it means that you should have a risk management plan tight and a more fundamental understanding of what happens to the currency you invest in. Basic trading measures are most appropriate for this kind of trade.

If you work as a daytrader, you can find a method to take benefit of daily currency fluctuations, without considering long-term basics. As a daytrader, a system based on the technical analysis would be the most suitable system.
Trading Psychology

The type of trading strategy is not a matter; the conclusion is that you should feel comfortable with the same. Always try to spend the time to test your strategy on demo account. If you take one system to another dealer, spend your time analyzing and defining their trade with system. If system you need to use is a technique that has developed the strategy, then try a program for back testing, like MetaTrader.

To find forex strategy means purely personal decision. Every trading person uses its own criteria when comes to business performance. Results may then vary between merchants using same system. Take your own time to decide on methods of business and develop system. The forex market is not going away, but instead will always be there when ready to commit to trading lively. The more you understand nuances of forex trading system and environment, the more will be your chances of long-term success.

Technical analysis has been commonly used in old markets like that of stock market. Methods of technical analysis depend on history of prices in order to predict future.Though there are Several methods used for predicting, the prime key is that most of them may probably rely on the price developments of the past period. Technical analysis will take a couple of various forms and numerous methods for its use.

One way of technical analysis is the practice of using technical indicators. A technical indicator refers to the graphical presentation of rate action which is normally shown at screen bottom. One of the famous examples of technical indicator is MACD. You can find MACD use in first forex trading tutorial.

There are other methods also to use technical analysis. One can make use of trend lines, or measure the support and resistance. Both methods are based on expecting at the table and review of recent history. Is this the price for a model? Does it happen in a row? Whatever the price is, it usually belong to any of these two classes. If the price moves in a model, and in a single direction, then you could use trend lines so as to analyze where the price values have to go. When the price seems to bounce in a repeated pattern, you can use lines of support and resistance to draw attention to where the price must change its direction.

Technical analysis may be great, but like any other methods of negotiation, it is not perfect. Business decisions are always at the delicacy of operator or the trader. There are some good technical indicators and tools that are commonly available for use. With many trading operators using similar type of tools with slight different interpretations, technical analysis can result in a self-fulfilling predictions. While many business have the same price range as a point of purchase, the price could jump in a way in which everyone makes the same movement. The question remains how these measures will be sustainable and this is where the personal prudence come to play its role.

How to apply technical analysis is different for each and every trader. Each trader has his or her own means of viewing and interpreting trends and support. Along with this, they will also present their own concepts about the development of indicators. These variations are known for your self trading system. You can opt 10 different shops and in turn you may get 10 dissimilar systems that gives off different signals. And these variations make a market to work.

Technical analysis is useful for forex trading. Though it forms a part of many things that you need to know about trading, it is a major thing to learn before any of the components. Understanding of technical analysis will give meaning to the charts when you look at them, and will help you to understand why certain changes occur in the price.