November 2008

To be successful in currency trading, it is essential for a trader to be constantly trained in currency trading. This currency trading training is necessary for both experienced and inexperienced traders due to the demanding environment of the Forex market.

Here are the 7 simple tips which should be read and absorbed daily so as to constantly remind oneself.

1. Take Responsibility of your losses
   Stop pointing fingers at the markets or other factors related to your trade when you make some losses. Take responsibility and learn from there as in what went wrong.
   
   
2. Be always patient with the market
   During the early stage of their currency trading training, new traders can be at a disadvantage. Those impatient traders will force trading opportunity when in fact there is none during the period of consolidation with little liquidity. Thus, be patient. Learn the fact that there is about 70% of the time that price is in a consolidation channel.
   
   
3. Make sure you learn from failure
   In tip 1, you learn to take responsibility. Here, you have to take the opportunity to learn and solve the problem in the way you trade. Make thorough analysis and proper planning to change or improve your strategies.
   
   
4. Consistently sharpening your trading skills
   There is no limit to a currency trading training. A successful trader has to consistently sharpening his or her trading skills and not just how much you can earn from an investment. Developed your skill and you will sure to see results.
   
   
5. Stay out if you are not sure
   Never enter a trade which you are not sure of for when everything about this trade goes wrong, you could do nothing but feel the pinch by watching it drop.
   
   
6. Take whatever outcome when the trades are well executed
   If you think you are happy with your winning trade even when you were not following you trading method, you better think twice. You may not be this lucky the next time. Try taking whatever outcome when the trades are well executed as you are following your well chosen methodology.
   
   
7. Enter a trade with good reasons
   Analyze carefully before you enter a trade. Entering a trade merely by looking at the price is not a good reason. Try not to use your so called ‘gut feeling’, it will not work. Establish a couple of reasons to enter the trade by pure technical analysis.
   
   

Remember the importance of skills and discipline and avoid developing any bad habits over the time. Constantly remind yourself of the good habits so as to ensure a higher chance of success in this market.

I will like to offer you a Free “Getting Started Trading FOREX with Options” course when you subscribe to my newsletter on Non Direction Trading. You will get your instant access at http://www.NonDirectionTrading.com

From Timothy Stevens – The Forex Options Guy who provide valuable Forex Options Training at http://www.NonDirectionTrading.com

It was sad to see a lot of people lost their money in forex market, as it is a daily routine to see that. It is true that there are still 97% of trader loses money everyday. That is the fact! But with this useful tips that I going to show you, will helps you to prevent losing in the market.

1. Understand that there’s always losing a trades.

Losing in forex market is normal; you are unable to resist it but to accept it. Over confidence traders stand to lose more due to their mentally cannot accept losing. Winning in a straight line is called “lucky”. Never assume to win all trades.

1. Never increase lot size in losing positions.

Cut your losses when you realize a losing trade. Accept the lost and start if a new trade. Never increase lot size in losing trade because you will never know the market movement direction. Save your ammo for the new trade.

1. Give instruction to your broker to close losing trade.

All live account will have a broker put in-charge. Instruct them to automatic close the losing trade for you. Remember that all trade must have a stop loss position to prevent from running away. The next you might know is that your account was swipe out while you are sleeping. Normally your broker will alert margin call on your account, which will stop it from preventing it going to negative.

1. Trade carefully

Trade along with the moving trends if you are inexperienced. Never predict the market will go upwards or downwards. Go along with the flow and exit the trade when market begins to turn.

1. Don’t get emotion into trade

If you lose, means you lose. The forex market is as fickler minded as a play boy’s mind. No point having relation on your trade. Remember that market is volatile, always make a decision before entering a trade.

1. Forex is not a get rich scheme…

You might have heard a lot of story on becoming a millionaire on trading forex. It’s true but that come with a tough history. Take your time to study about forex trading and do all research that you need to know. One step by step at a time. I’m sure you will success one day.

1. Make decision by yourself

Making a decision is very important. The decision you make might be a wrong decision but you will learn the lesson. Rather than asking tips from stranger whether the market will be going up or down. Ended up, you will learn nothing at all. Be responsible on what decision you made.

Learn from those who fail and those who success. This will give you a great experience in your future trading journey.

I will like to offer you a Free “Getting Started Trading FOREX with Options” course when you subscribe to my newsletter on Non Direction Trading. You will get your instant access at http://www.NonDirectionTrading.com

From Timothy Stevens – The Forex Options Guy who provide valuable Forex Options Training at http://www.NonDirectionTrading.com

Forex or foreign Exchange or FX involves the buying and selling of one currency against another currency. They are always traded in pairs e.g. EUR/USD, USD/JPY. So when you are buying Euro dollars (EUR) you are also selling the US dollars (USD) in exchange for the Euro dollars. If you want to buy US dollars then you would sell the Euro dollars in exchange for buying the US dollars.

An example that we would encounter frequently is when we travel overseas and need to exchange the local currency for the foreign destination currency and we would head to the local money changer or bank to buy the foreign currency. This is a good example that we are familiar with.

By buying and selling currencies at the money changer or bank we are already involved in this huge foreign exchange market. Banks and central banks, investment funds, hedge funds, exporters and importers, companies and retail forex traders are among the main participants in the forex market.

Banks trade to generate profits and also act as buyers and sellers of one currency against another for their clients trading and commercial transaction. While central banks buy and sell currencies to hold as reserves and protect the reserves. They also act to moderate their country’s currency strength to facilitate reasonable terms of trade in the international markets for their exports and imports.

Investment funds have a percentage of their portfolio in the forex market for many reasons like diversification, hedging, etc. While most hedge funds will speculate on currencies as it is the biggest market in the world thus able to accommodate their large trading size which is quite difficult to do in the equities or futures market.

Companies, exporters and importers are also very much involved in the forex market as buying and selling of products takes place all over the world thus buying and selling of currencies to facilitate and complete all these transactions are needed. An exporter in the USA might have sold his products to a company in Europe in US dollars so the importer has to buy US dollars while selling his Euro dollars to pay for the products from the USA. Or a company may need certain parts for their equipment which is not available locally so they have to order from overseas. This process requires the company to purchase the supplier’s currency so as to pay for the parts.

Lastly, we have the retail traders who have chosen the forex market above others like equities, commodities, etc. to do our trading or investments so as to make some profit. This is a growing segment due to the prevalence and accessibility of the internet which allows brokers to provide trading platforms and continuous price data feed to the small players globally. The low and affordable cost of the internet also helped many to participate in this growing phenomena. Brokers are going online with their own platforms that allow easy and simple to use trading and also to provide education to these small retail traders. The mushrooming numbers of brokers in recent years also act to lower cost (wonder of competition) for the small retails traders. Most brokers do not charge commission and the spreads for major trading currencies have also narrowed tremendously. There is no better time than now to start your foray into forex trading.

I will like to offer you a Free “Getting Started Trading FOREX with Options” course when you subscribe to my newsletter on Non Direction Trading. You will get your instant access at http://www.NonDirectionTrading.com

From Timothy Stevens – The Forex Options Guy who provide valuable Forex Options Training at http://www.NonDirectionTrading.com

Forex options are calculated with ‘Greeks’. A basic explanation of these ‘Greeks’ will help you understand how and why the forex options move and behave in a certain way. An option is a derivative and how it’s value is derived is from a formula that combines these Greeks together. The Greeks are how these options respond to various factors such as price movement, time decay, volatility, and interest rates.

There are 5 Greeks involved and we share go through them one by one.

Delta:

The speed of the option’s price gain or loss against the gain or loss of the ‘mother’ or underlying asset price is known as the Delta. The Delta is a figure that shows us how fast or slow the option will move relative to its ‘mother’ or underlying asset. A Delta of 1 means the option price is moving at the same speed and direction as the ‘mother’ or underlying asset. A Delta of –1 means the option price is moving in the opposite direction for every point the ‘mother’ or underlying asset moves.

The probability of an option expiring in-the-money is also expressed in the Delta. An at the money call option has a Delta of 0.5; i.e., 50%, meaning a 50% chance of expiring in the money. A deep in the money call will have a Delta of near 1, or 100%, meaning a near 100% chance of expiration in the money. A very out-of-the-money call option will have a Delta of close to zero, meaning a near zero chance of expiring in the money.

Gamma:

Gamma is derived from Delta is the odds of a change in Delta. It also informs in advance if the Delta could be changing. Gammas are positive for both the call and put. When options are deep in the money of deep out of the money the Gammas will be near zero as the probability of a change in Delta are very low. Likewise at strike price the Gamma would likely to e the highest.

Theta:

Time decay is reflected in the option position as Theta. Options bought have negative Theta, which means that each day you do not sell that option, the time value is declining because of the time decay. In this case, time decay is making it worse for the buyer of the option. When you sell options, Theta is positive, meaning that time decay is good for the option seller.

Vega:

How volatility affects the option pricing is reflected in the in Vega. In other words, its sensitivity to volatility. Options tend to have price increases when the underlying asset’s volatility increases. In this case, volatility is good for the buyer of an option and bad for the seller of an option. Vega is positive for long option and negative for short option.

Rho:

Rho is how interest rates affect the pricing of the the option. When interest rates are high and it is good for the position, Rho will be positive. If interest rates are high but bad for the option position, Rho will be negative.

I will like to offer you a Free “Getting Started Trading FOREX with Options” course when you subscribe to my newsletter on Non Direction Trading. You will get your instant access at http://www.NonDirectionTrading.com

From Timothy Stevens – The Forex Options Guy who provide valuable Forex Options Training at http://www.NonDirectionTrading.com

In the late 90’s, many financial company dominated the Forex Exchange Market. In the past several years the Forex Exchange Market has show a dramatic development. Nowadays private company are offering access to the Forex Market via internet data feed trading platform.

Private investors are going into Forex Market, with access to the same market data and tools used by bank, hedge funds company and professional traders.

Below here is 9 reason on why you must trade Forex.

1. Round the clock trading

The forex market is unique in that it is open 24 hours nearly 7 days a week. The market opens when the New Zealand and Australia markets open and closes when the US market closes. Due to the difference in time zone, it would seem that the forex markets are opened always.

2. No need to choose from too many counters

Unlike equities, in forex you would only need to understand the minimum of 1 pair of currencies and concentrate on it. Whereas for stocks and shares, before you can start understanding the equity you would have to sieve through thousands of companies before you can start to concentrate on trading them.

3. Liquidity

As the forex market is the biggest around, it is very liquid. Average daily turnover rose to $3.2 trillion in April 2007. Given its size, buyers and sellers can easily get their orders matched swiftly and easily. Whereas in the equity markets, one would have to wait for their orders to be matched especially if it concerns a stock that is not very well traded.

4. Good Leverage

In forex, you are able to obtain leverage up to 200:1 or even more depending on the broker. This means a minimum deposit of USD 500 can allow a trader to open a position size of 100,000 to trade. No other markets give you this advantage. However, do note that leverage can be a double-edged sword too.
Forex Options Trading can do a very good model for people who want to Forex Trading. What you need is a right system, the willingness to work and determination to not give until you reaches your goal. If you are willing to take action, then this Forex Trading is suitable for you.

And I will like to offer you a Free “Getting Started Trading FOREX with Options” course when you subscribe to my newsletter on Non Direction Trading. You will get your instant access at http://www.NonDirectionTrading.com

From Timothy Stevens – The Forex Options Guy who provide valuable Forex Options Training at http://www.NonDirectionTrading.com