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Forex, An Alternative Investment VehicleForex (Foreign Currency Exchange Market) has been used by international banks and large investment companies for years to make millions of dollars. However, with easy access to the Internet, it is now possible for anyone to take advantage of this...
FOREX: Reading Quotes For Success
There are a number of deciding factors for determining the price of a particular currency. The most important factors are the political and economic conditions in the country that issues the currency. Many things like the political stability,...
How to Read Forex Quotes
There are many technical terms associated with foreign exchange trading. These terms are very important to the Forex trading and the information is also crucial for every trader. Two such import terms are quotation and spread. Quotation deals with...
Evaluating the Forex Market
Learning to trade the forex market can be a valuable lifetime financial skill. The road to financial freedom requires a toll be paid in the form of perseverance and dedication. The journey starts with a single step and that step should be in the direction of developing a strong foundation in forex market analysis. In this article we are going to go over some forex market evaluation strategies designed to manage profit and losses in your currency trading account.
For anyone starting out trading the forex market, managing your trading can be a daunting task. Everything else seems to take priority over proven evaluation techniques. Learning the currency pairs and the myriad of technical indicators can at first be all encompassing, but building a solid market evaluation approach will allow you to maintain the big picture necessary for successful forex trading.
It all begins with a trading plan. Your forex trading plan should be your hard and fast guide to trade execution. Your trading plan should reflect your trading philosophy and style. Your plan should also contain key forex market evaluation strategies. Below are some currency market evaluation rules that can be embedded into your forex trading plan.
1. Price Action
In the end it is all about the price. Take a look at the current price behavior. Determine if the market is oversold or overbought. Are there any signals indicating a reversal, continuation or retracement? Where are the areas of support and resistance?
2. Market Condition
Access the overall market conditions. Look at both long and short term views. Access if the market is range bound or trending. Look deep into the market using multiple time frames in your technical analysis to determine if the currency pairs are trending short term in a long term range bound market or vice versa.
Stay current with the news and geo-political events. Technical analysis is the direction and the news can be the catalyst. Get comfortable with the principals of that Italian mathematician named Fibonacci.
3. Price Target
Determine what your price target is for the respective ranges and time frames. Patiently time your trade executions. You will be rewarded. Use your price action evaluation and market conditions to determine your price target.
Ask yourself if it makes
sense and look for reasons NOT to enter a trade. When you cannot find those reasons then it is onto trade execution to determine reward-risk ratios and stop losses!
4. Stop Loss
Determine the criteria for stopping the trade on both profit and loss side. Decide upon both technical and fundamental stops. No one is correct 100% of the time, in fact when we trade leveraged instruments like currencies we can be profitable with less than a 50-50 win-loss ratio when we have excellent money management skills.
If you trade without a stop-loss then your forex experience will be a short-term activity!
Anyone can enter a trade, but it is the truly skilled forex trader that knows when to exit the trade. On the profit side, as well as the loss side!
5. Risk Management
Determine how much capital you are going to risk in a given trade. This is critical. You have performed all your evaluation and your exact risk should be a known quantity.
You should also have a minimum reward to risk ratio established in order to limit your losing trades while giving the best odds for the trade to be profitable. This risk to reward ration should be determined by your trading style and time frames used.
Finally, talk the trade through with your trading group or out loud if you are alone. Trust me; you will not be the first forex trader to talk to yourself. Being able to talk through a trade will reinforced the positive aspects of the trade and confirms that your trade will be executed in accordance with your trading plan.
Then it is time to celebrate, because even if the trade does not go your way you had solid execution. You had a losing trade and not a bad trade. That is the difference between successful and non-successful traders. The law of averages will eventually reward you.
If forex is your path to financial freedom, then it should be your business as well. Developing a solid business (trading) plan and market evaluation approach will be your foundation for success in the forex market.
Todd Judkins is an entrepreneur and forex trader. For more information on forex education visit http://www.fxtradecentral.com. Todd regularly blogs about forex at http://forexjourney.blogspot.com.
Written By: Todd Judkins
 Globe and Mail | WORLD FOREX: Dollar Up As Greece, India Rate Hike Roil Markets Wall Street Journal TORONTO (Dow Jones)--Investors shunned risk-sensitive currencies and bid the dollar higher Friday after Greece's ... FOREX-Euro falls vs dollar as Greek worries linger Forex - Dollar mixed vs. rivals as US jobs data eyed WORLD FOREX: Dollar Soars As Greece, India Hike Rattle Markets |
 Globe and Mail | FOREX-Dollar rebounds broadly; AUD and CAD off highs Reuters ... dollar yet after getting done with major central bank events this week," said Hiroshi Maeba, executive director of forex trading at Nomura Securities. ... WORLD FOREX: Dollar Drops As Fed Kills Early Rate-Rise Hopes WORLD FOREX: Euro Down Vs Dollar, Yen As Asian Equities Weigh FOREX-Dollar falls vs most majors; euro off 5-week highs |
 istockAnalyst.com (press release) | Forex - Dollar mixed against rivals after US PPI data Forex Pros Forex Pros – The US dollar was mixed against other major currencies on Wednesday, following the release of disappointing data on producer prices in the ... Forex: Dollar falls further against European currencies FOREX: US Dollar starts week strong. EUR/USD falls below 1.3700 Forex: Dollar falls across the board as FED leaves rates unchanged |
FOREX: US Dollar on the rise. Leading Indicators, Manufacturing rise. Jobless ... CountingPips EUR/USD Chart – The euro dropping today versus the US dollar in forex trading and breaking through the rising support trendline on the hourly chart. ... |
Weak dollar helps forex kitty swell $1.3 bn Economic Times MUMBAI: India's foreign exchange reserves rose $1.3 billion during the week ended March 12, largely on account of revaluation of non-dollar assets. ... |
 France24 | WORLD FOREX: Dollar Gains Ground After Strong US Retail Sales Wall Street Journal "The data was dollar positive," said Jacob Oubina, a currency strategist at Forex.com in Bedminster, NJ "It's going to raise [US's] first quarter GDP up ... FOREX-Dollar falls vs yen and euro after trade data WORLD FOREX: Dollar At 2-Week High Vs Yen On Asia Stock Rises FOREX-Dollar gains vs yen after US retail sales data |
 Ecommerce Journal | Forex trends: dollar gains ground touching 2-day high vs euro Ecommerce Journal The dollar that closed Wednesday's New York trading at 1.0543 against the franc and 1.5327 against the pound is presently quoted at 1.0555 and 1.5312, ... The Trader Advantage: Forex Heats Up- Swiss And Cad Rate Questions Forex - USD/CHF climbs after mixed Swiss data Forex: Swiss Franc rallies across the board, SNB awaited |
 France24 | FOREX: Dollar slides vs Majors. Fed holds interest rate, housing data declines CountingPips AUD/USD Chart – The Australian dollar today surging higher versus the US dollar in forex trading. The AUD/USD rose to its highest level since January 19th ... Forex Market Bell by Ben Bernanke US DOLLAR: NOTHING WRONG WITH BEING PREDICTABLE USD May Fall Further Following Bernanke Testimony |
WORLD FOREX: Dollar Dips On Profit-Taking After BOJ Easing MarketWatch TOKYO (MarketWatch) -- The dollar fell against the yen in Asia Wednesday as as a widely expected decision by the Bank of Japan to further ... |
WORLD FOREX: Euro Up Vs Yen, Dollar On Hedge Buying; May Resume Fall MarketWatch TOKYO (MarketWatch) -- The euro rose against the yen and dollar in Asia Friday as Japanese short-term investors who have recently bet ... The demand for the high-risk currencies increased again. The oil rate ... |
