Simple Three Step Bollinger Band Strategy That Makes Money

Top professional traders all over the world use this system to trade. It works on any time frame but produces better results on the longer time frames such as daily, weekly and monthly. If used properly it can help you make money.

The first step in the system is identifying one of three specific candlestick patterns. There are over 80 Japanese candlestick patterns however, we are only interested in the strongest patterns. The strong patterns we are looking for are dark cloud cover, bearish engulfing patterns, bullish engulfing patterns and piercing lines. Each of these patterns need two candlesticks to form completely. The second candlestick is the most important and it must appear very strong.

The first thing we need is a strong candlestick pattern. A order should not be placed unless a strong candle stick pattern has formed.

The second step is the candlestick pattern must have a strong Bollinger band break out of the upper or lower bands. The first and second candle must break out of the upper or lower band strongly. If the rules are not met the trade set up should be ignored.

So the second thing we need is a very strong upper or lower Bollinger band breakout.

Rule one and two show a sign which indicates that the price wants to change. Either to collapse or advance. It only tells us that either the buyers (bulls) or the sellers (bears) are getting tired, giving up, or switching sides.

The rules also requires that the strong candle stick pattern should form were neither the bulls or the bears do not have full control over the price. This means one of the parties have become exhausted in the struggle to control the price movement.

So the third thing we need is a market showing signs of exhaustion where neither bulls or bears have full control over the price action.

If you do not have all three of these conditions it is too risky to place an order.

Using this Bollinger band system you can expect to trade five times in one month. You can set your take profit order up to ten times your stop-loss order. Your stop-loss order is best set at the previous candles high or low price.

I recommend that you practice in a demo account first. No strategy is one hundred percent right all the time. We are traders not fortune tellers. However, with proper risk management, and a solid exit plan it is possible to become consistently profitable trading currencies.

You are welcome to join our blog and community of experienced professional traders who love to mentor novice traders absolutely free of charge.To receive a free eBook explaining the system described here in full detail visit

Article Source: Here

Becoming an Expert Forex Trader by Knowing How to Use an Economic Calendar

The Forex trading industry is a highly competitive one. There are people who have been working in the field for years and still have not figured out a way to consistently predict the direction of currencies. If you are new to forex, you will want to know about an economic calendar and how to make the best use of them to make money.

Why you need them

The economic calendar is not just another calendar with dates and a list of events. It tells you:

• When important events are going to occur
• Which ones will impact forex rates the most
• When certain important announcements are going to be made

The professional forex traders use these calendars to:

• Consider various economic and political factors that will influence forex trading
• Get advanced information about the direction of a particular currency pair
• Understand current events better so they can make better forex decisions in the future

Economic calendars will not make you a millionaire with forex, but they are a valuable tool that will provide you with valuable information and insights to help you reach your goals.

Using a calendar

When you see such a calendar for the first time, you will be overwhelmed with the amount of data you have. There are literally thousands of events every week, so how do you know which ones you need to keep an eye on.

Here are a few ways to use the calendar:

• Make a list of events that are most likely to affect the forex rates of a particular country
• You can find this information from various new sources
• Eliminate those events that you think will have little impact on forex
• Check out blogs from forex experts and well-known economists to hints on which events to focus on more

Even the most seasoned forex traders cannot predict 100% which events will have the most significant impact on currency rates between two countries. However, we you get more and more experienced, you will get deeper insights into how two unrelated events can heavily influence forex rates.

Important releases

As a rule, here are some of the announcements and reports that routinely influence foreign exchange rates between the US and other countries:

• Consumer confidence index
• Consumer credit report
• Consumer price index
• Durable goods report
• Employment situation report
• Existing home sales report
• Jobless claims report
• Mutual fund flows
• Money supply

All of these are important markers of the health of the American economy. Even if the overall trend goes one way or another, you can track every report to come up with decent predictions by following them closely. You can then use the insights gained in order to invest smartly in forex and gain healthy profits.

ForexMinute is one of the best online resources for Forex traders, and we also offer some of the most useful trading tools like the best economic calendar. Please visit our website to access the best trading tools.

Article Source: Here

Is Bitcoin As Good As Gold?

Gold and Bitcoin have been used synonymously as safe havens and currencies. What is a safe haven? It is a place to park wealth or money when there is a high degree of uncertainty in the environment. It has to be something that everyone can believe in even if the current institutions, governments or players in the business game are not available. The wealth has to be kept safe in times of trouble. What are the risks to someone's wealth? There is theft by robbery if it is a physical asset. There is damage by fire, flood or other elements. There is the legal issue in not being able to determine if the asset is really yours or not. There is access risk in that you may own the asset but may not be able to get your hands on it. You may own the asset but may not be able to use it due to some restriction. Who else do you have to rely on to be able to use your wealth - spending it, investing it or converting it into different units of measure (currencies)?

In cases like cash or currencies, you may have the asset and can freely use it, but it does not have value due to a systemic issue. There may be too many units of the currency such that using them would not purchase very much (hyperinflation). There is also devaluation - where a currency is arbitrarily devalued due to some economic or institution issue. Most of these issues come from too much debt and not enough assets to pay for them. A currency devaluation is like a partial or slow motion bankruptcy for a government or issuer. In a foreclosure scenario, the creditors (or users of the currency) would be getting a fraction of what the asset (or currency) was originally worth.

No Liability

One key aspect for both bitcoin and gold is that in creating either of them, there is no liability involved. National currencies are issued with interest attached, which means there is a liability to the issuer of the currency. The currencies due to being centralized can also be "delisted" or have their value altered, devalued or swapped for other currencies. With Bitcoin, there would have to be consensus among the players for this to happen. Gold is nature's money, and since it was found, there is no one really in charge of how it works. Gold also has the history of being used as money for thousands of years in virtually every culture and society. Bitcoin does not have this reputation. The internet, technology and power grid are needed for Bitcoin to function, whereas gold just is. The value of gold is based on what it is being exchanged for. The value of Bitcoin is similar to buying a stock or a good: It is determined by what the buyer and seller agree it is worth.

Bitcoin Issues

Are there regulatory, institutional or systemic risks with Bitcoin? The answer is yes. What if a bunch of central banks or governments took over the Bitcoin issuance? Would this not lead to control issues that could either stop the Bitcoin transactions or impair them? What if the justification was to stop terrorism or illegal activities? There are also technology issues like who controls the internet, the electrical energy involved in mining Bitcoins, or other issues in infrastructure (the electrical grid, the nuclear grid, the internet servers, the telecom companies etc.) Regulatory risks can also run the gamut from restricting who buys Bitcoins, how many can trade each day or perhaps issuing trillions of units of fiat currency and buying and selling Bitcoins with them which would cause convulsions in the prices of the unit, leading to mistrust and lack of use? Gold does not have these shortcomings. Once it is mined, it cannot get destroyed. It is not reliant on technology, infrastructure or any institution to make it valid. Since it is small and portable, it can be taken anywhere and still be useful without any other mechanism needed. The prevailing institutions can be changed many times and gold will still be valuable.

Gold is a classic safe haven because it does not need institutions to exist, is very hard to forge, cannot be destroyed by the elements and does not have issues of access or restrictions. Physical theft and restriction may be factors, but gold fares better than currencies or digital currencies at this point in time.

Article Source: Here

How To Build An Intraday Trading System

20 years ago, before markets became completely computerised, traders worked off the floor and markets were slower and less efficient. In those days, intraday trading systems could take advantage of those inefficiencies to find a profitable edge. It wasn't easy but it was a lot easier than it is now.

Today, markets are controlled by computers and algorithms. HFT (high frequency trading) contributes to at least 40% of market transactions in some markets and even more in some other markets. Non-HFT algorithms make up a big percentage of the rest.

And the dominant players in HFT and algorithmic trading are big hedge funds and institutions; companies like Goldman Sachs that have huge pools of wealth and resources. Competing against these financial giants for the most part is foolhardy.

Teeing off with Norman

It's like Howard Bandy once said: "trading against Goldman Sachs is like going for a round of golf with Greg Norman. You're never going to win so there's no point in trying." Or something like that.

Consider also, that there are very few examples of anyone even being able to beat the market on an intraday timeframe. And even fewer who have been able to do so with a system.

Still not convinced?

So it's clear that intraday trading is not for the faint of heart and I should know as I spent almost a year trying to time the markets every day in a professional setting.

Even for professionals, intraday trading is supremely difficult and expensive. When I worked as a day trader, we may have had direct access to the market but we also had to pay £150 a day in desk fees, which very quickly mounts up unless you are trading very large size.

But what if you want to ignore these warnings and you're still determined to build an intraday trading system?

I can only wish you the best of luck and suggest the following pointers that come from my own trading experience:

- Avoid forex, there appear to be more inefficiencies in individual stocks and futures.

- Think outside the box. For example, look into social trading, look at the smaller markets that the banks aren't as interested in.

- You can override the system. Longer term systems may not benefit from overriding but there are studies to suggest that humans and machines perform better when working in unison. In fact, in the short-term, discretionary trading usually does better than system trading.

- Conquer the psychological side so as to avoid gambling and emotional stress.

- Understand how to analyse your system so you know when it's stopped working.

Master some of those rules and you'll have a much better chance of making money from an intraday trading system.

Article Source: Here

What Markets Should You Use for Your Portfolio?

A couple of years ago I made a fundamental mistake: until then I had my portfolio focused mostly on index futures markets. For years I have had with this approach really nice results. But that year, I experienced how frustrating it can be, to go through a couple of periods when index markets are underperforming. That was when I have decided to work really hard and improve my intraday portfolio composed of automated trading systems (ATS).

Smooth equity isn't just about the systems - it is a smart combination of markets, timeframes, trading approaches, and, later on, also innovative position sizing. When you think about it, there is the logic behind it.

Even though in times of financial shocks and surprises there is barely any negative correlation in the markets, there are still some markets which live their own lives - and they offer us smart way for diversification.

The result is that when one of the market groups is not doing well, there is another, which compensates the losses from the first one - and makes the equity overall smoother.

What market groups you should use

This is the first question - what markets groups you should combine in order to get the desired result - smooth equity.

We have following futures groups: Index, Currencies, Metals, Energies, Bonds, and Grains. Every market group lives its own life and you can find at least one noticeable market in every group that can represent the whole group.

Personally, I have experimented with all groups and, besides currencies, I can highly recommend any combination. The currencies are, from ATS point of view, highly unstable (for example in Forex, ATS are failing really fast and it is really difficult to find profitable ATS for Forex). It also depends on how many markets you create a system for, and how many markets you trade with your account. But even with rather a small account, you can trade 3-4 markets. For such cases, I would recommend following combinations:

Combination of 3 markets (pick one market from each market group):

• Index
• Grains
• Energies

Combination of 4 markets (pick one market from each market group):

• Index
• Grains
• Energies
• Bonds

Nowadays, I trade several portfolios that are based on the 4 groups mentioned above. Here is an example of one of them (breakout strategies, 30-minute chart, 5 markets, equity for the last 8 years, trading 1 contract per system):

The net profit for all 8 years and all markets combined is 421,548 USD and the max drawdown is just 12,315 USD.

Smoothen the equity by using multiple timeframes

The second way how to smoothen your equity curve (in a combination of trading several markets from different groups) is using several timeframes for every market (ideally without changing system parameters, or with just small changes).

It is more like a final touch than smoothing the equity, but it brings up an interesting idea that it might be better to add new timeframes instead of trading multiple contracts in the same timeframe. Another option is to optimize also the timeframes (check the results of your system on several timeframes and pick one timeframe for each market - it can, but doesn't have to be the same) - but then, we need to ask ourselves how much of over-optimization this is.

Anyway, here is another example of the portfolio mentioned above, when for every market we add the second, 15-minute, timeframe. The equity is slightly smoother, the drawdown hasn't increased so much, but the profit has.

The net profit is 812,457 USD and the drawdown is 18,815 USD.

What systems to use

The best variant is to have in a portfolio both trend and also counter-trend systems. Still, it is sufficient to have a system that can smartly react on both situations (equally, if possible).

I am specialized in breakout strategies and I can say that it is all you need to have a balanced portfolio across several markets - but only if you have systems trading both long and short. Sometimes you just need a simple breakout strategy that doesn't have great performance (that you wouldn't trade individually), but in combination, you have a nice portfolio with smooth equity curve. You need to constantly focus on the performance of the portfolio - it is more important than the performance of underlying systems. Remember when there is a huge drawdown for one market (system), the others can compensate that and you can still make a profit.

For that, you need to have a quality workflow setup how to create new and new strategies, as you will need a lot of them and for several markets. At the same time, it is crucial to have a setup of robustness testing procedures so that we can add to our portfolio really robust strategies.

Article Source: Here

5 Advantages of Forex Trading With a Respectable Broker

Trading has significantly evolved in recent years to make it more accessible to anyone that wishes to get involved. One type of trading that is often underrated is Forex. Here are a few of the main benefits of Forex trading:

Accessibility

Forex trading is relatively easy to get into. A great benefit is the ability to start trading with a minimal amount of capital. For the first-time traders that are just starting out, it is possible to start trading the different currencies with a bank in the region of $100-$150. This is significantly lower than other activities such as stocks which often need a bank of at least $10,000 to get started.

Liquidity

Forex is based on trading currencies, which makes it a very liquid market. The market is open on a 24/5 basis because there is a non-stop demand for money. The long trading hours give the option to set your trading activities to fit within your normal day-to-day schedule. The fast-paced nature of the Forex market means it is possible to complete a trade at any time in normal market conditions.

Trading tools

There are plenty of brokers in the market that offer an all-in-one trading platform that provides everything needed to get started. They use the very latest technology and software for the user-friendly and easy to understand trading environment. There are many third-party supplies that develop extra features and extensions. In addition to the PC based trading platform, the latest software tools are also made for iOS and Android devices for the complete on-the-go trading experience.

Demo accounts

Most brokers give clients access to an unrestricted demo account to fully test the services offered and perform practice trades before using real money. This gives the option to trade currencies in a real market environment without the risk of losing money from your bank. The demo accounts with no restrictions on time limit are preferred because they make it possible to continue practice trading until fully ready.

Educational resources

A further feature of using a reliable broker is the ability to get access to a wide range of educational tools and resources. This can include helpful guides, webinars and videos that give instruction on the best practices for trading.

Are there risks involved?

Forex is a major financial market, which can experience a certain degree of volatility. In many situations high volatility can be beneficial for the trader, but there is the risk of substantial losses if this is combined with high leverage.

Article Source: Here

Trade Binary Options In A Simplest Way

Anyone can trade binary. Even a dummy can win any given binary trade, too. It's a two-way choice, it is hard to predict wrong. Like some brokers call it, it is an all-or-nothing industry. You win some and lose some. But how does one trade Binary Options?

Binary Options are designed to be very simple and easy. With only two possible outcomes (increase or decrease), any individual wishing to join the world of Binary Options trading may do so without any hassle.

Generally a trade can be achieved in just three easy steps once a deposit has been made.

• First, you choose an underlying asset to trade from a wide range of Currencies, Stocks, Indices and Commodities.
• Next, you decide the direction the price of the asset will move in.
• And finally you decide the amount to invest and click Call or Put.

The length of the investment before the expiry time varies from asset to asset and can be anything from a few minutes to a week. The payouts are always predetermined according to a percentage and you can never lose more than you invested which limits your risks.

Key Things To Know About Binary Options Trading

Some key things you should remember before you dive in are these:

• Your risk is limited to your trade amount.
• The minimum trade is as little as $10.
• You do pay for losing trades - you lose your trade amount.
• There is plenty of risk involved. Never invest more with a broker than you can afford to lose. It's risky!
• You never take any ownership of the underlying asset - you only "bet" via a call or put option on the direction of the price movement.
• Trading binary options are designed to be easy to do.

Your risk is limited to the amount you place on the trade. Your payoff is clearly stated before making the trade. If you win a binary options trade you win a fixed amount of cash. Since there are only two possibilities, that's the origin of the name of binary options.

That's the very basics guide to binary trading. It is that simple, and it is designed to be that easy. Your return is clearly stated before hitting the button. You can earn up to 85% on your investment if you finish the trade on the prediction you stated.

However, to be a long-term winner you have to develop a strategy that works for you. You have to consistently profit winning more trades than you lose. Since there is a risk involved, that means that you need to create a method to succeed. You can do that by studying the tips and tutorials given on each platform, like Banc de Binary, 24 Options, BigOption and many more. Finally, you are ready to start trading binary options and make your first extra income.

Article Source:Here

Tips on How To Read Forex Charts

Charts are very important in Forex exchange as they aid in monitoring the rate change of the currencies that you are trading. There are many types of charts that you can use in monitoring the change:

Line Chart

A line chart draws a line from one closing price to the next closing price. When you string the lines together you are able to see the movement of the currency pair over a period of time.

Bar Chart

This one is a little bit complex and it shows the opening and closing prices. It also shows the highs and lows of the trade. The bottom of the vertical bar shows the lowest traded price while the top of the bar shows the highest price paid.

Candlestick

This is the most popular chart used in Forex trading. The main function of this chart is to serve as a visual aid. There are many reasons why candlestick charts are common: they are easy to use, interpret and are excellent tools in helping you in identifying the market turning point.

If you are a beginner you are on the lucky side as the chart comes with cool names such as "shooting star" which helps you in remembering what a given pattern means.

How to Read A Forex Chart

Do you want to know how to read a Forex chart? Here are tips on how to go about it:

You should start by locating the chart that you want to analyze and then find a range. Remember that charts show both short periods (such as 12-24 hours) and long periods such as weeks and months. As a beginner, you should start with charts that show short periods.

To easily understand the data presented you should begin with a single data bar. Here you should locate the open and close prices that are indicated by the horizontal "pegs" on the chart bar. If the close rate is higher than the open rate, the rate is definitely trending up. If on the other hand the open rate is higher than the close rate the rate is trending down.

You should note the areas where the chart hits a low for a number of times, but it doesn't drop below a certain rate. These are important places of support where the market forces prevent the rate from plunging.

You should also locate places in the chart where there are several highs in the same range. These places indicate resistance.

You should note that both support and resistance can easily break when there is some external factor such as negative or positive news.

Article Source:Here

Trade Binary Options In A Simplest Way

Anyone can trade binary. Even a dummy can win any given binary trade, too. It's a two-way choice, it is hard to predict wrong. Like some brokers call it, it is an all-or-nothing industry. You win some and lose some. But how does one trade Binary Options?

Binary Options are designed to be very simple and easy. With only two possible outcomes (increase or decrease), any individual wishing to join the world of Binary Options trading may do so without any hassle.

Generally a trade can be achieved in just three easy steps once a deposit has been made.

• First, you choose an underlying asset to trade from a wide range of Currencies, Stocks, Indices and Commodities.
• Next, you decide the direction the price of the asset will move in.
• And finally you decide the amount to invest and click Call or Put.

The length of the investment before the expiry time varies from asset to asset and can be anything from a few minutes to a week. The payouts are always predetermined according to a percentage and you can never lose more than you invested which limits your risks.

Key Things To Know About Binary Options Trading

Some key things you should remember before you dive in are these:

• Your risk is limited to your trade amount.
• The minimum trade is as little as $10.
• You do pay for losing trades - you lose your trade amount.
• There is plenty of risk involved. Never invest more with a broker than you can afford to lose. It's risky!
• You never take any ownership of the underlying asset - you only "bet" via a call or put option on the direction of the price movement.
• Trading binary options are designed to be easy to do.

Your risk is limited to the amount you place on the trade. Your payoff is clearly stated before making the trade. If you win a binary options trade you win a fixed amount of cash. Since there are only two possibilities, that's the origin of the name of binary options.

That's the very basics guide to binary trading. It is that simple, and it is designed to be that easy. Your return is clearly stated before hitting the button. You can earn up to 85% on your investment if you finish the trade on the prediction you stated.

However, to be a long-term winner you have to develop a strategy that works for you. You have to consistently profit winning more trades than you lose. Since there is a risk involved, that means that you need to create a method to succeed. You can do that by studying the tips and tutorials given on each platform, like Banc de Binary, 24 Options, BigOption and many more. Finally, you are ready to start trading binary options and make your first extra income.

Article Source: Here

Forex Trading: The Largest Trading Platform

The Forex have advanced from the humblest of beginnings to the world's largest market by dollar volume. With many different entry points, hedgers and speculators can find what they are looking for. Whether they pursue a more complex strategy or simply want to hedge their everyday currency risk, the Foreign Exchange markets provide the liquidity and instruments for trading in currencies.

Hedging simply hedging implies controlling or reducing the risk. It is an investment position that is used to reduce any substantial losses or gains undergone by an individual or an organization. This is done by taking a position in the futures market for limiting risks associated with price changes.

In other words, the hedge is 100% inversely interrelated to the vulnerable asset. A hedge can be built up from different types of financial instruments such as stocks, exchange traded funds, forward contracts, insurance, future contracts and many types of derivative products.

The Power of Risk/Reward and Hedging
Since Forex trading is a risky one, understating the usage of Stop Loss and Take Profit orders is imperative in trading. Stop Loss (SL) and Take Profit (TP) are used for hedging the risk and rewards of the trader for realizing the profits and minimizing the losses.

There are several methods that traders/investors with a lot of money implement in order to reduce the risk of their trade. One of these techniques is called hedging. Hedging is basically making twofold investments, one investment which will make as the main investment and the other, less risky investment supposed to offset any potential losses incurred from the main investment. It involves reducing the risk that one faces while indulging a business deal. In short, hedging is fundamentally a method which secures the future income.

eToro is a social trading App that places an automatic Stop Loss order on all trades so as to prevent the trader from losing more than he has invested. If the rate of his open trade falls below what is covered by his investment, then the trade is closed by the automatic Stop Loss automatically.

By setting a Stop Loss order a trader makes sure that the value of his trade does not drop lower than a certain level. This way the trader control the maximum amount that he is willing to lose on a trade, without having to check each trade throughout the day.

Take Profit orders are also similar to stop loss orders which only meant to profits. TP orders make sure that once the trade reaches a certain level of profit it will be closed.

Effective Money Management in Forex.
In the Forex market, money management or Risk Management is the key factor which should be seen as a positive element. Money Management is a defensive concept which keeps the trader in funds so that he can trade another day and bears outs profitable performance. It is the key factor that is the difference between success and failure. With risk management the trader needs to manage his means to achieve his ends. Sometimes it is absolutely the right thing to do to get a loss so as to avoid making much larger and more catastrophic losses to his hard earned funds.

For a trader, the proper usage of trading plan is very important that lays out strategies for the trading activities. Helping traders to manage their money and the risk exposure are the practical uses of such plan. The plan should comprise details of what risk level the trader comfortable with, and the amount of capital he has to use.

A trader should really adhere to the levels of risk that he draws in his plan. If he desires to make low risk trades, then there is no reason why he should start exposing himself to higher levels of risk. It is often tempting to do this, probably because the he has made a few losses and he wants to try and fix them, or maybe he has done well with some low risk trades and want to start increasing his profits at a faster rate.

The risk management and the wealth management are to be exercised with a proper strategy, then most possibly there are high chances for getting good profit. A good quality money management strategy helps the trader to survive a losing streak. To do that, it needs to be flexible. A trader should not invest a fixed amount per trade, but a fixed percentage of his starting balance.

Remember, money management is very simple to exercise, but not as simple to carry on. Once the trader developed the money management system that works for his trade, make sure to stick with it and do not let his emotions get in the way of long term profit, although it means absorbing short-term losses.

Article Source: http://EzineArticles.com/9584814