There are many forex forums on the internet where anybody from beginner to successful professional trader can go and discuss forex trading strategies and systems. Access is usually unrestricted and some forums are very popular. But can you believe all that you are told? Are forex forums a useful source of advice or just a waste of your time?

The history of the forum dates back to Roman times when the forum was an open place or square in the middle of the city where the male citizens would meet to discuss important matters such as politics or law. The word came to mean any discussion group or its location, and it was adopted by online communities to replace the old ‘bulletin boards’ of the 1990s where messages were posted in threads and often emailed to all members.

Now you simply log in and post your questions or comments on the forum. In all of the active forex forums you can post a question about currency trading and have an answer very fast. This can be useful but it can also be dangerous. Usually you do not know anything about the person who has replied to your question. Perhaps they know less than you do.

It is very easy to appear to be an expert in anything on the internet. All a person needs is to pick up the jargon of currency trading and sound confident. You do not usually know their real name or anything about them. You can see how many posts they have made, but all that means is that they are active in the forum, it does not prove that they are actively trading. They could be forum addicts, wasting all their time chatting online instead of making money. Be careful not to fall into that trap yourself!

Even if you really are seeing replies from successful and experienced traders, they may have different priorities or aims than yours, or they may use strategies that you would not be comfortable with. So although you can certainly get free forex trading advice on forex forums, you might want to be cautious in how you use it.

One of the best uses for a currency trading forum is to search for recommendations and reviews of products and services. For example if you are thinking of signing up with a particular broker or buying a certain forex robot, you can check the forums for feedback from other traders who have used that service.

This type of feedback can be very useful in helping you to decide whether a product is right for you, but again you will not necessarily want to take anybody’s word for anything. You may come across one person who has very strong views either for or against a product while you yourself might have a very different experience with that same product.

People are often very critical of a product that they could not figure out how to use, for example. You might find it easy to use and be very successful with it. On the other hand you will sometimes see glowing reviews from people who have used a product for a very short time and been lucky with it. Longer term the results might not be the same.

So remember that one person’s opinion is just that – it is not a universal truth. It is always best to gather responses from as many different people as possible when you are looking for free trading advice and reviews on forex forums.

Candlestick analysis is one of the simplest and most effective methods of technical analysis for currency trading as well as stock trading. While there are other types of charts available including line and bar charts, the candle patterns are the most popular.

History Of Candlestick Charts

This type of price tracking chart was developed in Japan in the 18th century and that is why you will sometimes see them referred to as Japanese candlestick charts. It also explains why many of the common recognized patterns have Japanese names such as doji and marubozu.

The charts are believed to have been invented or at any rate used by the very successful Japanese commodity trader Mr. Homma who mainly profited from trading in the price of rice. Previously, simple line charts had been used to track commodity closing prices. Candlesticks gave traders a way of plotting more variables while staying within a two dimensional chart.

While bar charts can also plot the open, close, high and low, the advantage of candlesticks is their visual utility. Bullish and bearing periods are clearly visible at a glance.

Mr. Homma’s phenomenal success as a trader led other Japanese commodity traders to adopt his analysis tool and in the early 20th century it was introduced to the American stock market by Charles Dow, the founder of the Wall Street Journal and co-founder of the Dow Jones company.

What Is A Candlestick

A typical candlestick has a block that is the body of the candle, plus vertical lines known as shadows or wicks which stick up and down from the body. The top of the upper shadow is the highest price reached during the trading period and the bottom of the lower shadow is the low.

The top and bottom of the candle block mark the opening and closing prices in either order. The candle was originally unshaded (white) for a rising market where the open was the bottom of the candle and the close was the top, or shaded (black or green) for a falling market where the open was the top of the block and the close the bottom. You may now see other colors used, e.g. green or blue for a rising market and red for a fall.

In a case where there is some coinciding of prices and the open, close, high and low are not all different, the candle may look slightly different. Here are some examples:

Doji – period with an equal opening and closing price, looks like a cross.

Marubozu – period when the opening price was the low and the closing price was the high (white marubozu) or vice versa (black marubozu). Has a candle body block only, with no shadow sticks top or bottom.

Candlestick Analysis In Real Time Trading

Candlesticks can record any measured time period. Typically traders will use 5 or 15 minute candles with the resulting chart showing several hours, but it is possible to set your chart for a longer term or shorter term view. Patterns can be identified that indicate emerging trends or possible forthcoming breakouts. You can then compare with indicators or other time periods to check the signals.

Trading decisions in the live market often need to be made very fast. The colored blocks of candlestick analysis help traders to see movements and reversals at a glance and avoid mistakes.

Mini forex trading accounts attract many beginners to forex trading. These usually allow you to trade one-tenth of the standard lot size, which means that it is possible to trade with only one-tenth of the investment capital that you would need for a standard account.

Standard accounts date back to the time when forex trading was done by telephone connection with dealing desks. At that time there were very few private individuals involved and those who were, usually had plenty of money. It wasn’t cheap or easy before the internet so there would be no point unless you had a lot of money to invest. For this reason, standard accounts usually require a minimum investment of over $10,000 and some brokers require $50,000. From this type of account, if using 100 times leverage, a trader would stake 1,000 currency units to control a standard lot size of 100,000 currency units.

However, these days the internet has put forex trading within the reach of ordinary people who probably would not want to invest so much money from the start, even if they have it. To cater for these individuals, brokers began offering mini accounts where the lot size is one tenth of standard. That means that with 100 times leverage you stake 100 currency units to control a mini lot of 10,000 units.

Although the currency unit that you are dealing with might not always be dollars, for convenience we will assume this means that you are staking $100 on each trade. Think about that for a moment, because if you are not comfortable with that amount of risk, you probably should not be considering mini forex trading accounts.

The alternative is a micro account where you would trade with ten times less again. So generally this means staking $10 to control a position size of $1,000. Of course, your profits will be ten times less – but so will your losses.

It is important to think carefully before you start trading with a mini forex account. Many people are drawn to opening mini forex trading accounts with the absolute minimum of funds because they want the higher profits. What they do not think about is the risk. Of course you can set stop losses so that your risk is lower than the amount staked on the trade, but it is important to have the stop loss at the optimum point for your system so that it is not triggered by minor fluctuations.

So how much capital should you have to open a mini account with relative safety?

Some brokers will let you open a mini account with just $250 but it is much better if you have at least $1,000 and preferably $5,000 available for your trading, even if you do not put it all into the broker account right away. You must be able to withstand the occasional run of losses, both psychologically and financially. If $250 is all that you have in the world, you would be better advised to open a micro forex trading account. Mini forex trading accounts are too risky in that situation.

Anybody involved in forex trading cannot avoid dealing with currency trading brokers. As an individual trader you cannot set up your own dealing desk, so brokers are your way in to the forex market.

As trading from home becomes more and more popular with private individuals who often have relatively low startup capital, new types of brokerage firms are springing up to cater for them. Most of these companies are completely legitimate but you do need to do your due diligence before committing your funds to them. Check which country they are registered in and whether they are regulated there.

What would happen to your funds if the company went out of business? In some cases you are protected by regulatory bodies but in other cases you are not. So this is a good question to ask before you invest.

Most forex traders work with 100 or 200 times leverage. This means that to control a position size of $10,000 you would have to commit only $100 or $50 of your own money. This gives you a lot of power because you can make a lot of money in a short time when things go your way. On the other hand of course it is also possible to lose a lot, if you do not have stops in place to prevent you. For this reason, when you are beginning it could be a good idea to sign up with a broker who will automatically close out your trades when the limit of your account is reached. This protects you from margin calls which can otherwise mean that you could end up owing the broker more than you have in your account.

Currency trading brokers provide many services to their clients these days. You will probably have access to a demo account where you can test out the brokerage software that allows to you trade in the market in real time. You can also use the demo account to test your trading systems before going live with real money.

They will also usually provide some kind of technical analysis in the form of charts and indicators. You can expect candlestick, bar and line charts, and indicators including the Stochastic, MACD and Bollinger bands. Try to look at the charting services provided by several different brokers through their demo accounts and consider ease of use and whether they give you the information that your trading system requires. Of course, many traders sign up with dedicated charting services once they become more successful, but when you start out, getting good technical analysis from your broker can save you that cost.

You will want assurance that the broker’s software platform is not easily cracked by hackers. Remember this is your money and you do not want anybody to be able to access your account illegally. Ask the currency trading brokers what security measures they have in place, or check on forums.

If you are a forex trader, currency trading tips and hints are something that you should always be looking out for. Here are three points that can help you increase your forex trading profits.

1. Avoid over trading

Many of the most profitable systems only produce a few trading signals. It can be frustrating waiting for the conditions to be right for your system. Many people give in to the temptation to open a few trades when the market is ‘almost right’. People who enjoy financial trading are almost always comfortable with risk. However this haphazard risk taking strategy will almost certainly lead to losses in the long run.

Remember there is a reason why the rules of your system are as they are. The aim is to make money – but only by keeping within the set boundaries.

Remember that in forex trading, less is often more. There is no point opening ten trades a day if only one of them is going to be profitable.

If you simply cannot deal with the boredom of a system that produces a very low number of trading opportunities, then look for a second system that you can track at the same time.

2. Be realistic in your goals

One of the things that can ruin an otherwise sound trader is aiming for unrealistic goals. Often this is called greed, but that’s too harsh a term for most situations. What actually happens in many cases is that the person starts daydreaming. They are constantly thinking about making a lot of money from a single trade.

Actions soon follow thoughts and they start using high risk strategies that seem to give them a chance of achieving the dream. Instead, they often end up wiping out their funds. Looking back, it was completely predictable, but they were pulled off course by persistent thoughts of riches.

So if you catch yourself daydreaming, cut off that thought right away. Focus on making a realistic profit figure – and no more. If you happen to make a lot more one time, put it aside and tell yourself that it’s there to cover the losing spell that may soon follow. Do not start expecting to make that much on every trade!

3. Take a step back

As well as checking your trading signals on daily, hourly and/or minute charts, it can be very helpful to take a broader retrospective view. Look back over the last week’s or month’s charts regularly.

This will stop you becoming blinkered so that you can more clearly see what went right or wrong for you and why. It may give you ideas that will help you tweak your system or even find a new one. Most importantly, it will help you to refine and improve your forex trader currency trading strategies for success.

If you are serious about making money with forex trading, you will need to know the best time to trade foreign currency. And by the way if you are not serious about it, you probably should not be getting involved! Forex trading is not risk free and there are plenty of things that you need to know before you start trading for real.

Generally the best plan for a beginner is to get into the habit of trading during some of the busiest times. Do not look for quiet periods hoping to make a big break when nobody else is around. It just does not happen that way and you could be caught out. Better to go with the crowd at a time when you can be more sure of being matched at a good price for both your opening and closing deals.

So when are the busiest forex trading times? The answer is the overlap between the London and New York forex trading hours. London is actually the busiest currency trading floor, with New York second. London business hours are good for trading on the euro, British pound and Swiss franc, since most of the major countries using these currencies are within one hour time difference from Britain. New York of course is the home of the US dollar, the most traded currency, and the time zone also covers Canada.

Expressed in British time (the same as UTC in winter), trading starts in London at 8.00 am and finishes at 4 pm, while trading in New York starts at 1 pm UTC and finishes at 9 pm. Therefore the overlap is from 1 pm to 4 pm British time. Expressed in New York time (EST), the overlap is from 8 am to 11 am. That is when the forex market is busiest on practically every day.

Of course those hours may not be ideal for everybody. If you live in one of those time zones and want to trade foreign currency outside of normal business hours when you may be working another job, you will certainly have the opportunity. If you live in Europe you can trade in the evening when the New York market is still open, and if you live in the EST time zone you can trade in the early market when the London floor is already very active.

Also, if you trade cross pairs that do not involve the US dollar, you may find a busy time for that pair based on the business hours of their two countries. For example the AUD/JPY pair can be reasonably busy during the Asian session when Australian and Japanese business hours overlap. However, even on these pairs there is usually more activity if you can also overlap with US or British trading times.

Long term traders who may leave a trade open for several days or weeks will be less constrained by the peak trading times. For day traders, however, it is important to be able to slip in and out of a very busy market if you want to profit from forex scapling strategies. So it is also important to take into account how you plan to trade foreign currency.

What is online currency trading? Put simply, it is a way of making money from the daily changes in currency prices by trading in currency on the internet. It is often called forex or FX trading, which are just short names for ‘foreign exchange’. It is a speculative form of investment, so it is risky. At the same time, it allows many people to make money from their home computers by working just a few hours each day.

One of the benefits of forex trading over stock trading is that it is a 24 hour market so you can trade in the evenings. Currency trading can be done in any part of the world, you are not limited to your own country’s currency. So you can take advantage of the different time zones which mean that the market is constantly open from Sunday night to Friday night.

In other respects you may think of it as being a lot like stock trading. You are dealing in rising and falling prices, submitting buy orders for currencies that you think will rise and sell orders for currencies that you think will fall in value. You can make these trading decisions on the basis of world economic events or more simply, you can look at charts which show patterns and indicators that many traders follow to make successful trades.

Currency is always traded in pairs because it has to be an exchange: in order to buy one currency you always have to sell another. A common pair for beginners to use is EUR/USD, or the euro and US dollar. These are the most heavily traded pairs so costs are usually low and a lot of information is available, making it one of the easier and cheaper pairs to trade.

When you are trading this pair you are always either buying or selling euros, with the dollar as the quote currency. If you want to buy dollars when trading this pair, you have to place a sell order for euros, and that will automatically mean that you are investing in dollars. This is called ‘going short’ on EUR/USD. If you want to buy euros, that is called ‘going long’.

The aim, of course, is to place a closing order on the trade after the price has moved the right way so that you are in profit. Of course if it goes against you, you can lose, so you need to place stop orders. A stop order cancels out your trade at a certain level of loss so that you are protected from large losses.

Many brokers will accept a very small minimum investment to attract new traders. At the same time, the use of leverage and margins means that you can control large position sizes with a small account balance. You may only have to supply 1% of your trade amount in order to open a trade. The broker guarantees the rest, protecting their position with automatic stops. All of this means that online currency trading does not require a large investment to get started.

The Metatrader EA or expert advisor is a whole family of forex robots that work on the free downloadable software platform called Metatrader 4. MT4 basically acts as a platform or framework that trading robots can be built on. That’s why, when you buy a trading robot, you usually have to download Metatrader 4 and install it on your computer before you can set up the robot or expert advisor itself.

Automated trading systems such as expert advisors will act for you in the market, making trades according to their own system with regard to the settings that you put in. This has a lot of advantages if the system is profitable. Your Metatrader EA will not need to sleep, eat, visit the bathroom or have a social life. Provided you can make sure it is always online, it will watch the markets 24 hours and should never miss the right moment for opening or closing a trade.

Robots also have perfect discipline and never feel any emotion. This means that they will not be tempted to make trades that are outside the rules of your trading plan because of fear, greed or over optimism. They do not have hunches that tell them to buck the trend in some disastrous way.

It is easy to set trailing stops in MT4 and this can help to maximize your profits. The trailing stop will automatically move to follow the price when things are going your way, and stop if the market turns. This means that on a successful trade you can play it out to the maximum while guaranteeing profits at a certain level. If things go against you from the outset, of course the stop does not move but is triggered to minimize your loss.

Of course this relies on the Metatrader EA being constantly in touch with the market, like other aspects of the robot’s trading. It runs on your own computer and connects with your broker’s software platform over the internet. So this means your computer needs to be on 24 hours, except at the weekend when the market is closed, unless you exit all of your trades before the end of your working day.

Many computers automatically shut down when they are left idle for an hour or more, so you will need to make sure that you can alter that setting. In Windows Vista you can change the plan settings in Power Options in the Control Panel. You also have to think about whether anybody else who uses the computer is likely to shut it down after they finish using it. Most traders prefer to have a dedicated computer that nobody else will use, but this is not always possible.

A better option to make the most of your trading robot is to have it hosted remotely. Sometimes the developer of the robot will offer you this option and it is often worth taking. They will then set it up on a server so that it does not run on your computer. This also has the advantage that you can access your Metatrader EA from any computer if you need to go in and change settings.

Day trading systems are one of the riskiest but most exciting ways of making money in forex or stock trading. Whatever approach you take, it is vital to be able to apply your system consistently. If you keep bending the rules or abandoning systems every time you take a small loss, you will never make any money at all. This is a well known fact and very easy to say, but we all suffer from the temptation to act off center when the pressure is high.

So here are our top 5 tips to help you resist that temptation and be consistent. Combine these tips with a profitable day trading system and you should have a sure fire recipe for success.

1. First, never follow a system that you picked on a whim or even on somebody’s recommendation, without thoroughly testing it for yourself. It is not enough to be told that a system works: you have to know it from experience, otherwise your confidence will fail you as soon as you hit one of the inevitable bad patches. You also have to be sure that you are going to be comfortable with the position sizes, risk per trade, etc in bad times as well as good. You must be sure that the system is exactly right for you to give you the best chance of making money with it.

2. One of the main keys to applying a system consistently is self discipline. If you tend to be a person who acts on impulse and is constantly changing your mind, you probably need to work on this. Pick an aspect of your life where you would like to be more disciplined and work on it. This will make it easier for you to apply the same principles to your trading.

3. If you find yourself giving in to temptation and opening trades that are off your system, open a separate account with a small balance, perhaps a micro account, where you can indulge yourself with ‘fun’ trades. You are pretty sure to lose this money but it’s better than doing it in your main account and wiping out all of your funds.

4. Avoid discussing your system with other people once you have started to operate it, unless you have a mentor or are receiving support related to that particular system. Anybody following other day trading systems is likely to criticize yours just because they want to believe that their own system is better, and this can affect your confidence which in turn affects your ability to stick to your system’s rules. As for discussing it with friends and family, there is generally no point. They will be uninterested at best and negative at worst, simply because they do not understand what you are doing.

5. Stay off the beer while you are trading. Alcohol and the forex market do not combine well.

If after all this you still have trouble being consistent, then perhaps you should consider using an automated trading system in the form of a robot. There are plenty on the market or if you are seriously into day trading you could have someone automate your own system. Keep it to yourself for your own profit or put it on the market to recover your development costs. There are plenty of people looking for successful automated day trading systems, you might be able to help them out.

If you are interested in currency trading Australia you need to know about some of the special factors that affect the price of the Australian dollar. It does not matter whether or not you live in Oz, you still may want to trade this currency from time to time. It can have benefits because the Australian dollar sometimes stays more stable when other major currencies are very volatile. This is partly because of its position as a commodity currency.

Commodity currencies are the currencies of countries whose main exports are in raw materials rather than manufactured goods or services. Raw materials can include food and other agricultural products, iron and other metals, gem stones, oil, etc. In Australia, the main commodity export is gold.

When the average consumer thinks of gold they usually equate it with jewelry. However, in the world of investments, gold is bought and sold more for its commodity value than for use. Gold is something that often preserves its value in times of economic crisis. For example if there is rampant inflation or a major stock market crash, the average person’s savings will often become almost worthless but an investment held in gold will maintain or more likely increase its value.

Australia is one of the world’s largest sources of mined gold. Production levels have fluctuated a little due to the effect of internal taxation but broadly speaking, Australian gold production has risen from just 20 tonnes a year in the late 1970s to around 300 tonnes a year today.

Because of this, there is a close correlation between the price of gold and the value of the Australian dollar. Interestingly, even though the USA is another major source of gold, even producing slightly more than Australia, the price of the AUD/USD currency pair is also closely correlated with the price of gold, other things being equal. This is because gold is not such an important factor in the huge American economy as it is in Australia.

So when gold prices rise, the price of AUD/USD will often also rise, and when gold falls AUD/USD is likely to fall. Often there is a little delay before the currency price reacts so a foreign exchange trader involved in AUD/USD has the opportunity to use this to his advantage.

You can also expect that commodity prices in general and gold in particular will go up when there is any major economic crisis in the world. Provided that Australia is not too closely involved in a crash, that is often another early indication of an upcoming rise in the price of AUD/USD.

Of course, gold is not the only factor here and if you want to trade AUD/USD you will need to stay informed about anything else that might affect the price. You can never completely remove the risk involved in forex trading. However, understanding the influence of gold prices on the Australian dollar will be of benefit to you if you want to make money from currency trading Australia.