Forex Trading

To help you with that, I am suggesting you three forex candlestick patterns that you must be aware of. Before I begin, let me mention that I am suggesting these candlestick formations on the basis of -

1. how frequently do they appear.

2. How much reliable are they and

3. How difficult or easy are they to spot.

With that said, lets go through the top 3 candlestick patterns in Forex Market -

1. Bullish and Bearish engulfing pattern - One of the most common and one of the straightforwards to identify and make trade decisions. When a significant sized bullish candle is engulfed by a long bearish candle during an uptrend, this may signify that uptrend is about to end and the downtrend may be resuming. This is bearish engulfing. This information when combined with other technical indicators, can help in making a decision regarding opening or closing of a trade.

Vice-a-versa is true for bullish engulfing forex pattern.

2. Evening and morning stars - Equally reliable, but this candlestick formation is not that common. However, when spotted, a lot of traders place trade without even waiting for a confirmation.

3. Forex Candlestick Doji - This is not a pattern, but just a single candlestick formation. However, its formation on a forex chart signifies that the existing trend is about to end and a trader should make a trading decision whether to keep the trade open or adjusting of stop losses etc. When it is seen on a daily chart, a lot of traders close their trades.

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If you are using these indicators or thinking of using them, then learn now to use them correctly.

Here are some tips that will help you use these indicators correctly.

1. Don't use them on meaningless data

More traders than ever are day trading and their losing.

The reason why is simple the time frame is to short and all volatility in daily periods is random and therefore NO technical indicator will give you any advantage, pivot points, moving averages, or any other indicator can help you make profits.

Ever seen a day trading vendor who has real time track record of profits?

You won't!

Because it doesn't work, volatility can and does, go anywhere in a day and traders lose - it's as simple as that.

2. You can't time entries with them!

Moving averages define the longer term trend; pivot points indicate points of rotation by definition, so they are telling you where prices may find support or resistance - nothing more.

Many traders like to simply wait for prices to reach the levels and enter their trades and then hope prices turn in the direction they anticipating, but if you rely on "hope" you will lose.

Never trade on "hope" trade with the odds in your favour.

This means when prices move towards the price levels you are looking at, you need to get the odds in your favour and that means combining them with momentum indicators to time your trading signals with the risk to reward I your favour.

You need evidence that price momentum is indicating the levels will hold.

If for example, prices move to support and price momentum turns up, you have the odds in your favour that support will hold and you can execute your trading signals.

Good momentum indicators are ones such as, the stochastic and Relative Strength Index (RSI) and if used with pivot points or moving averages, you have a powerful combination.

It's all about combining indicators for profit - no indicator works on its own, so you need indicators that complement each other.

THE Biggest Mistake any Trader Can Make.

Is to try and "predict" market direction. Most day traders do this as standard and most people who use pivot points and moving averages, who try and execute trading signals with them are doing the same.

You can't predict turning points so don't try - act on confirmation and you will increase your odds of success dramatically.

Keep in mind trading is an odds game not a game of guessing, hoping or predicting - if you remember that and use it to your advantage you can avoid a fatal mistake most forex traders make.

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Once a trader has observed the forex market for a length of time, he or she will recognize that the market does have certain habits and does frequently repeat daily patterns of activity. Learning these patterns and recognizing these habits does not require any special knowledge, training or education. All it takes is careful observation and looking for patterns as to how the market tends to behave during certain times of the trading day. As a new trader, if you spend enough time observing the market movements with respect to time of day, you will begin to see some regular predictable patterns.

One of the market's predictable habits occurs in the New York afternoon, after 2 pm EST and into the final New York daily closing. Most notably, this pattern is most frequently observed in the EUR/USD. During this time of the trading day, trading flows are usually light and volatility is low. One pattern that has been very consistent over time, for whatever reason, is that there tends to be a pivot that becomes apparent sometime just after 2 pm EST. By "pivot," I am referring to a "pullback" or "retracement" from the overall day's predominant trend.

In other words, if the trend of the day for the EUR/USD has been rising, then between 2 pm and 3:30 pm EST, the market will typically see a pullback lower, usually around 20 to 30 pips. On the other hand, if the daily trend for the EUR/USD has been downward, then after 2 pm a retracement of 20-30 pips higher is often observed.

By checking the market or checking the charts in the New York afternoon around 2 pm Eastern time, a new and even an inexperienced trader may recognize this pattern and then safely execute a high probability trade. If a person is available to trade at this time of day on a consistent basis, they could expect to gain an average of 10 pips a day with a fair amount of ease.

In closing, I must state the obvious disclaimer - that trading forex is a risky endeavor with no guarantees. Trade with caution and never trade more than you can afford to lose. Spend time observing the market to recognize its patterns so you may make smart, high probability trades and minimize risks.

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Trading the Forex market has many benefits over other financial markets, among the most important are: superior liquidity, 24hrs market, better execution, and others. Traders and investor see the Forex market as a new speculation or diversifying opportunity because of these benefits. Does this mean that it is easy to make money trading the Forex Market? Not at all.

Forex brokers agree that 90% of traders end up losing money, 5% of traders end up at break even and only 5% of them achieve consistent profitable results. With these statistics shown, I don't consider trading to be an easy task. But, is it harder to master any other endeavor? I don't think so, consider musicians, writers, or even other businesses, the success rates are about the same, there are a whole bunch of them who never got to the top.

Now that we know it is not easy to achieve consistent profitable results, a must question would be, Why is it that some traders succeed while others fail to trade successfully in the Forex market? There is no hard answer to this question, or a recipe to follow to achieve consistent profitable results. What we do know is that traders that reach the top think different. That's right, they don't follow the crowd, they are an independent part of the crowd.

A few things that separate the top traders from the rest are:

Education: They are very well educated in the matter; they have chosen to learn every single and important aspect of trading. The best traders know that every trade is a learning experience. They approach the Forex market with humility, otherwise the market will prove them wrong.

Forex trading system: Top traders have a Forex trading system. They have the discipline to follow it rigorously, because they know that only the trades that are signaled by their system have a greater rate of success.

Price behavior: They have incorporated price behavior into their trading systems. They know price action has the last word.

Money management: Avoiding the risk of ruin is a primary subject to the best traders. After all, you cannot succeed without funds in your trading account.

Trading psychology: They are aware of every psychological issue that affects the decisions made by traders. They have accepted the fact that every individual trade has two probable outcomes, not just the winning side.

These are, among others, the most important factors that influence the success rate of Forex traders.

We know now that it is not easy to make money trading the Forex market, but it is possible. We also discussed the most important factors that influence the rate of success of Forex traders. But, how much time does it take to have consistent profitable results? It is different from trader to trader. For some, it could take a life time, and still don't get the desired results, for some others, a few years are enough to get consistent profitable results. The answer to this question may vary, but what I want to make clear here is that trading successfully is a process, it's not something you can do in a short period of time.

Trading successfully is no easy task; it is a process and could take years to achieve the desired results. There are a few things though every trader should take in consideration that could accelerate the process: having a trading system, using money management, education, being aware of psychological issues, discipline to follow your trading system and your trading plan, and others.

Raul Lopez is a full time Forex trader, his trader are based on a price behavior approach. Raul is also founder of http://www.straightforex.com a high quality Forex training company.

• Mode of operation

Forex AutoPilot is a fully automatic forex trading robot. Not only does it decide what to trade - it can automatically issue the buy or sell order to your forex broker. In that respect, it can do the entire process for you, whether you're out to lunch or asleep in bed.

Forex Killer does not issue automatic orders to forex brokers. It simply provides quick, ongoing analysis of the forex market and gives you recommendations. It is up to you to issue the orders to your forex broker. So you have some control over the process, and you give the final go - but it requires your intervention.

• Ease of installation

Forex AutoPilot has been getting some complaints about its installations process. Although the process s well covered in its users' manual, it seems to be a consistent complaint and apparently the installation process is not straight-forward and smooth for some.

Forex Killer, to the best of my knowledge, does not get as many complaints about that.

• Credentials of creators

The creators of both Forex Autopilot and Forex Killer have extensive forex trading background.

Marcus Leary, the creator of Forex AutoPilot, is a senior forex trader by profession. He co-created Forex Autopilot with Steven Strauss, a mathematician who helped develop the mathematical formulas Forex AutoPilot uses.

Andreas Kirschberger, the creator of Forex Killer, is a former Deutche Bank forex advisor.

• Supported trading platforms

Forex Autopilot works on a single forex trading platform, Metatrader 4. While it is one of the most popular platforms out there, it is not supported by all forex brokers. You have to check with your forex broker whether he or she works with this platform or not.

Forex Killer works with every known trading platform, so in that respect it is more flexible. It is highly likely that your forex broker works with one or more of the platforms supported by Forex Killer (although it is always recommended to check).

• Reviews

Both Forex Auto Pilot and Forex Killer are highly acclaimed. They have gotten thousands of enthusiastic testimonials from users, and are considered world leaders in the automated forex trading software industry.

I hope this comparison helped you shed some light on both of these highly revered forex trading software products.

To read more about them and other automated forex software products, click here: Automatic forex trading systems review [http://www.squidoo.com/automated-forex-software].

Marvin Leicester was an engineer and marketing manager, who used work 9-to-5 for other people from a miniscule open-space cubicle - until he made his mind up to be his own boss and create a steady income for himself and his family working from home on his own terms. Click here to read his reviews on leading automated forex software tools [http://www.squidoo.com/automated-forex-software].

In Forex trading 95% of traders lose money yet, many traders still come into Forex trading thinking its going to be a "walk in the park". These naïve traders, buy cheap software packages which claim they can trade with 90% accuracy, make several hundred percent per annum and only have minimal drawdown, which is normally 5% or less.

Now the above is fantasy and these robots don't work - you don't get financial freedom for a hundred dollars or so and by making no effort. If they did make gains as easily as they claim, 95% of traders wouldn't get wiped out.

So what can you really expect and what should you be pleased with in terms of gains?

The best traders I know will compound in the region of 50 - 150% in terms of gains and these are top traders generally the bigger the gain, the bigger the drawdown.

As a rule of thumb on a 50% gain drawdown would be around 30%, on 100% gain it would be 20 -30% and on 150% gain, 30 - 50%. These periods of drawdown would be for a few weeks to a few months, before a new peak in equity is hit.

In my view if you make 100% on your money and you can keep drawdown to around 20% you will be up there with the very best traders and over time, this growth rate will compound to a a huge amount.

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Forex or "Foreign Exchange" is where the money of one nation is traded with another. The most important and popular pairs of exchange in the forex market are "Euro Dollar", and you will see this pairs in all forex display screens as "EUR/USD". There are also a lot of others pairs but sure not important and not famous as "EUR/USD" pairs, like:-

1-The British Pound, and you will see this pairs in all forex display screens as "GBP/USD".

2- The Japanese Yen, and you will see this pairs in all forex display screens as "USD/JPY".

3- The Swiss Franc, and you will see this pairs in all forex display screens as "USD/CHF".

However there is a problem in the forex market until this day, there is no one central exchange where everyone can exchange the currency. All the currency traded are done over the telephone and online through a very big networks that connects all the banks, brokers and currency traders with each others.

Currency trading in the past was just for the banks, but today and after the new revolution electronic economy, online forex trading companies start to offer a lot of services to all traders around the world. Today if anyone have a computer and internet connection can easily start to trade currencies, but sure the experience and analysis is very important to success in forex game.

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Of course, a primary need is for real-time, second-by-second access to market information. Forex trading is very fast paced and there is no room for a lag in delivery of information so that trading decisions can be properly made. Despite the claims of all Forex dealers that their particular software will perform speedily there are many things that can delay the receiving of data.

Having a newer computer, with adequate power and speed, is one critical consideration. Another is to have an Internet connection that is high speed so you can take advantage of all that your broker's software can offer you. Since distance from the broker's servers is another important point it is wise to have a broker in the same general area as you are. Having a broker half-way around the globe may cause you critical delays during times of rapid trading. This, of course, may be less of an issue as trading technologies advance.

A Choice: Client Based or Web Based?

Client based software offerings are those where critical portions of the software resides on your own computer. Web based packages run over the Internet and you can access your account on your broker's website from any computer with a web connection. Is one preferable? The trend is toward web based packages because these are much more convenient and reliable. If your computer is down for any reason you can still conduct business through a another computer. With client based software you would be restricted to the one computer.

Because the web-based software resides on the broker's system there is much greater security. The broker can secure the data by high-strength encryption so transmissions are always protected. A single trader's computer, on the other hand, is much more vulnerable to hackers, viruses, and other such security breaches.

The most basic features of a Forex trading software package is allowing a trader access for buying a selling and seeing real-time price information. So, of course, all packages should offer this ability. The trader can see up to the minute quotes for those currency pairs most often traded and can manage their accounts, either buying or selling by price or using stops and limits to enter and exit the market. Charting functions integrated right into the software are also very desirable.

Most brokers will offer a basic software package for free but there are higher-level, more capable programs also offered for a monthly fee. These more capable programs give you access to a large range of analytical functions and allow you to trade directly from the chart within the Forex trading platform.

Since the heart of these systems are the data servers, Forex brokers' servers must be secure, with all transactions processed correctly and all data integrity maintained. Since every computer system can be crippled by events outside of the control of individuals there should be separate backup servers in different locations. This means that a natural disaster, or even a simple loss of power supply, does not cripple the operation. Data backups at regular intervals will also go a long way toward assuring that client data is preserved in an accurate state no matter what.

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There are two major pitfalls associated with being involved in self directed trading these are poor money management and the emotional factor. The emotions are that are fatal to the success of this are greed and fear. They stay in the trade too long as they either are greedy or the get out of it as they are scared.

The automated system takes this out of the equation. Trades are carried out with the assistance of exit and enter points that have been set up within the program. A third negative to non-automated dealing is time. Automation takes care of this quite nicely. For people who wish to trade in countries that have different business hours, this is also ideal.

This form of dealing is for buying and selling on the forex markets twenty four seven. This is passive income at its best as you can spend your time elsewhere while money is being generated passively.

Behind the scenes, expert advisers are working on your behalf and in line with the instructions you have given. You will be able to preset the boundaries and the system will operate in line with that. This permits the system to enter and exit precisely when you want it to.

You are able to set numerous parameters within the automated forex trading system. These include your rules for trading, price level proximity, technical indicators, averages, price points, price patterns and market trends. All of this gets you extra income and more time to enjoy things you like most.

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For those worried about how to make money consistently trading the forex markets, recently a veteran trader has been spreading the word about an original and quite revolutionary way to trade the forex markets. It is a system based on what is called Price Driven Forex Trading (PDFT).

PDFT is a system based in three trading strategies that are able to produce consistent and systematic profits for the trader that follows PDFT to the letter. In short, Price Driven Forex Trading (PDFT) is a method for trading the forex market without using any type of indicators, support or resistance levels, moving averages, pivots, oscillators, fibonacci, trend lines or ANY other trading tool you can think of right now. PDFT only uses the price of the currency pair and a time element.

This system is the basis of the elusive forex trading machine. This original trading system based on PDFT concept is 100% mechanical, this means it requires no discretion or interpretation, that's why the term "machine". You will simply have to follow strict rules in order to operate the forex trading machine. This may be a dream come true for many aspiring and veteran forex traders.

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The News surrounding the economy for sometime now indicates that the economy is about to pick up and this is the time to take position and profit from the next boom before others realize it. Online currency trading is one business opportunity most people are just discovering its immense profit potential. Most people do not realize the immense wealth they can make from Foreign Exchange trading. If you are searching for an alternative to more traditional online home-based business ventures, then Forex trading or currency trading may be the best thing for you.

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