4x Trading Made Simple: Forex Money Management 101

By Phil Jarvie

Trading 4x is not as easy or as hard as most people think. It's just different. Novice and experienced traders often make the same mistakes over and over again. Emotional investing, God complexes, or just plain gambling. So, the most important rule number 1 with 4x trading:

Forex Money Management 101. Do not look for a holy grail of trading. Just don't lose money!

The 4x market turns over more cash in 1 week than the whole USA economy does in 1 year. But add to that concept, how much does every up and down tick in the market all add up to? How many pips movement in a day do we miss? Forget about it. There is no such thing as Albert Einstein and the theory of everything with 4x trading. No super computer can help you. 4x robot software is useful but clumsy at the micro level. Missing opportunities is a big part of forex trading. The real heart of the matter is not losing money. Profit is about making profitable trades only.

Forex money management is essential to protecting us from our emotions and it quite simply means we never risk more than 2% of our trading account.

The first rule of Forex Money Management is to be used, not abused. Let me run you through a typical day for me in a volatile forex trading market. I have my $10,000 4x trading account. I am only allowed 4 pips for my stop losses because I am going to be trading with 5 lots. 5 lots is $50 per pip, and with only being allowed to risk $200, I must not lose more than 4 pips.

I'm sure you think I am crazy, but hear me out. Open up your forex platform software of choice - metatrader is fine. You want H1 hourly chart for EURUSD on the 19th of August, 2009. Note the huge rise of the Euro from 1.4111 to 1.4265 in 3 hours - all of which happened after bad USA economic data and a billion dollar trader from the Middle East put his weight behind the Euro at the same time.

Not even a super computer could predict to buy at 1.4111. News traders would have got on board based on the USA problems sure. But actually, I was lucky enough to be already long a few hours earlier. But with only a 4 pips stop loss? Luck or stupid?

When I entered my buy limit trade at 1.4080 I did it as a pending order. Actually, when I placed that pending order, I was going shopping with my girlfriend and wasn't going to be back home for hours. SO, at the same time I placed a 5 lot sell stop order at the same price as my 5 lot pending buy order. IF the market dipped to pick up my buy order, it would also hit my sell stop. The market can then do what ever it likes after that. Each trade 100% cancels the other out. It's called hedging. I had hedged my position with opposite orders.

As it turned out, the market did dip down to 1.4069 and I was in for both buy and sell orders cancelling themselves out. When I got home the sell stop order was in profit, and my buy was at a loss. But the net effect to my account was only the 0.9 pips spread. I waited for an hour, the Euro rebounded, I closed my sell trade at break even and let the buy trade continue. Joy oh joy it then went seriously into the money a few hours later on the USA's bad news.

After an exciting few hours at the screen I watched that long position go crazy into profits, and so I switched it to a 20 pips trailing stop, which it did do at 1.4245. That was a tidy, ultra low risk, $8,250 profit on the day. 82.5% profit on a $10,000 trading account while I went shopping. The first rule about forex money management was never broken. I was never at risk of losing 2% of my account.

Hedging people. Learn it, get serious about the first rule of Forex Money Management. DON'T LOSE MONEY, and NEVER risk more than 2%. - 23223

About the Author:

Phil Jarvie is a professional forex trader expert in 4x trading, 4 software and using 4x hedging for forex money management and may wish to visit his website to consider his reviews on how to make money trading currencies

Forex Currency Trading; What Is The Difference With Currency Market Trading

By Phil Jarvie

Many variations on the terms exist, including 4x trading, fx currency trading, forex currency trading, currency market trading, fx exchange and the list goes on and on. The main point is that it is all about buying and selling international currency, and the forex currency market is where the price is constantly being set in real time with each country being paired with another.

Confusion about the long list of names for it comes from the fact that not many people know about it. With the Internet, investors became active and excited for share trading, options trading, warrants trading and even futures trading. However most people/investors have not really (yet) expanded their horizon to include forex currency trading.

With the Internet and very smart and fast software programs, currency market trading was finally liberated from the monopolies held by large banks, brokerage firms and International trading corporations. The Internet brought forex currency trading potential to the masses. But in fact most investors focused only on stock market trading shares, options and warrants.

The irony is that Currency market trading, even though much less well known than the stock market, is massively bigger than the stock market. In fact, the World's forex currency trading turns over more money in 1 week than the entire USA economy does in one whole year.

When something like forex currency trading is 50 times bigger than the USA economy, it is impossible to centrally control. If collectively the World cannot agree on such an important issue as climate control, it is even more difficult to imagine forex control and so it will always be totally dependant on free market forces to control currency market trading.

Forex currency trading is so huge that big business and the criminal element cannot manipulate it as they often and easily do with the stock market. There are no corporate raiders or takeovers in forex, no corporate lawyers leading stock market proxy fights. Currency market trading is simply the constant process of matching one currencies value against another currency in real time.

If a large currency market trading player enters the fx exchange market with billions of dollars, his effect on currency market trading will be short lived (maybe move the price 1 cent over 3 hours) and then his risk is the same as any other forex currency trading player. His billions are then at the same risk of the continuing changes in fx exchange values as the rest of us.

Given that big business and Governments are powerless to control or corrupt the forex currency trading market, what chance does the little guy or gal have? Every chance and the same chance as the large player does, simple as that. The only difference you will find is the points spread that bigger and smaller forex traders pay. I pay 0.9 pips anyway, so I am not concerned about that at all. My main concern is that currency market trading is a level playing field that cannot be rigged - and it cannot. So, that leaves the very smart 4x trading software like metatrader and forex robots we all have available, and the best of proven forex strategies we all have the ability to learn. We all have the power to work to a successful money management plan.

By all means visit my free website where I go into a lot of detail about currency market trading, the many forex robots and expert advisors available, and also what forex strategy can do for your forex currency trading. - 23223

About the Author:

Phil Jarvie writes extensively on 4x trading related matters and is an experienced forex trader. Feel free to visit his free website for details on forex robots, expert advisers, fx trading software, 4x trading and currency market trading and forex currency trading articles.

Practicing In The Forex Trading Market

By Jo Nash

So you want to learn about the Forex market, and trading internationally but you are risking your personal wealth if you jump in before knowing all about how trading takes place. Online, you will find many games and simulations while learning the methods involved in forex market trading. The forex markets include countries from around the world, where all countries involved are using different currencies, and when faced against each other are worth more or less than the original valued currencies that are being traded. The forex markets are used to build wealth in, for governments, banks, and brokers, and for many countries.

To get started in learning about forex trading, you will need to locate the forex trading software, education-learning system you want to use. As you find the games, as they are called, you will enter information about yourself, about what you are interested in learning and then you will download software to your computer. In following the 'game', you will learn how to make and lose money in the forex market. This type of game is going to make you more aware of what happens daily, how the markets open and close, and how different the various countries currencies really are.

You will open an online 'account' using the gaming system. You will then be able to read the news, find and compare markets, and you will be able to make 'fake' trades so you can watch your money build or be eaten away in losses. As you learn the system, using it a few times a week, you are going to be more prepared, more educated and you will be ready to use the forex trades to make money. Of course, you may still need the aid of broker or a company to make your transactions happen but you will better understand the process, what will happen, and what calls you may want to make when you read about the news, the markets, and the currencies in other countries.

The forex market is also referred to as the FX market. If you are interested in joining the millions who are making money in the forex markets, you want to ensure you are dealing with a reputable banker or company involved in forex trading. With the spur of interest in the forex markets, there are many types of companies that are popping out on the Internet appearing to be genuine forex trading companies but in reality, they are not. Forex trading can be completed through a broker, a company that deals in the funds, and from within your own country. For example, the US has many regulations and laws regarding forex trading and what companies are permitted to work with the public dealing with international trading and markets. - 23223

About the Author:

Learn How to make your forex trading easier and more profitable with Forex Automatic Trading Systems, or by learning allthe strategies and tricks of forex trading from Forex Trading Courses

How To Make Money Online Trading Forex

By Adam Woods

Many people are using the foreign exchange market, also known as forex or FX, to make a lucrative income from home. Billions of dollars are traded on the forex market daily and is one of the quickest ways to make money online it is also extremely exciting.

Trading foreign currency has been done by banks and big financial corporations for many years. Since the internet began it has developed in such a way that it is now possible for individuals to trade forex at home over the internet at increments of as low as 0.50 a point.

When learning to trade on the forex market it is best to open a play money account with one of the many trading platforms available. Working with somebody who has financial trading experience is also advisable and to steer clear of automated forex systems that simply do not work.

The trading of the foreign exchange is done in currency pairs, one currency against the other and on the movement of the last two decimal places of that pair. In the case of the EUR/USD the Euro dollar against the US dollar this currency would be traded on the last two decimal places representing a tenth of a cent. So if the currency pair was to fluctuate .0050 that would represent " a pence. If you were trading at 1 a point this move would be a 50 move. It is not uncommon for currency pairs to move 200-300 points in a day.

With the right guidance it is possible for anybody to trade on the forex market from home. It is also one of the most exciting markets to trade with its high volatility. With trillions of dollars being traded everyday there is potential for individuals to take hundreds even thousands out every day. - 23223

About the Author:

Adam Woods has tradedForex for two years and first discovered the foreign exchange market when looking for ways to make money online. Adam was taught to trade by Colin Atkins and has since seen some huge profits. Colin is now tutoring small handfulls of ordinary people the exact secrets that make him around 5000 a week on a regular basis. Get in touch with Colin now for a better life and financial freedom.

Decreased Volatility Breakout Strategy (Part II)

By Ahmad Hassam

Third Stage-Aging Trend: Aging trend is the period of consolidation as the trend comes to maturity. This is the period where lot of profit taking will take place. As the momentum of the trend exhausts itself, volatility tends to decrease at this stage of the trend.

Both the bulls and the bears are hesitant to make daring moves at this stage of the trend. Experienced traders try to get out of their trades at this stage of the trend by closing their positions. This satisfies the appetites of inexperienced traders as they consolidate their positions.

This is the period of consolidation and the prices tend to stay calm during this period. Currency prices have moved by a large amount in the previous period of high volatility. The trend takes a short break and the volatility is low during this stage of the trend.

End of Trend: This is the time when the prevailing trend ends and reverses itself after some new information is revealed about a currency that changes the mass opinion. This results in the rapid adjustment of prices within a short time as the market players tend to absorb the information.

Traders become desperate to get out of their positions especially if they have been caught on the wrong side of the market. Many stops will get triggered during this stage of the trend.

During this stage of the trend there is a sharp follow through of the prices in the reversed direction. You can see even within a trend currency prices can experience decreased volatility followed by increased volatility as the crowd psychology keeps on changing.

Traders with open positions during this low period of volatility are the most vulnerable to unanticipated news. Decreased volatility can be found during trending or ranging phases.

When the market shift from high volatility to low volatility or vice versa, this time can be used to profit from the change in volatility. During this time gains can be made from the unsuspecting players and this is known as the Decreased Volatility Breakout Strategy. Deceased volatility provides an excellent opportunity to traders to prepare and profit from an imminent change from low to high volatility.

How do you measure that the change in volatility? There are several technical indicators that can help you visualize the volatility in the currency prices. The success of this strategy lies in measuring the volatility of the forex market correctly. There are various ways to do that.

Two of the most useful indicators that can help you measure the volatility of the currency prices are: 1) Moving Averages and 2) Bollinger Bands. You can also use triangles as one of the best indicators of decreasing price volatility in the currency price charts.

When a particular type of triangle has been identified by the trader, a high probability trade may be in sight. All triangles show decreasing price volatility in the forex market. You can take advantage of the decreasing price volatility in the forex market through identifying the triangle formations. - 23223

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Get Netpicks Forex Signals Free. Learn Forex Trading!