Do You Want to be a Forex Trader

Forex or CFD? Although, these two methods of trading the financial markets have lots of things in common, but it seems to me that a lot more people are trading in Forex than CFDs. If you are thinking to join the millions of Forex traders already out there, here is some good tips by Phil Smulin:

Currency trading a.k.a. Forex Trading must be one of the most controversial subjects of our time and all with very good reason. The world of Currency Trading is no longer the exclusive playing grounds of Banks, governments and influential financial institutions; we live in an era where the Currency Market is available to anyone who can at least open a trading account of $300.00.Trading Currencies have never been more accessible to the individual than now. But like every industry there are a group of role players that make the rules and the obviously they are always winning (making money that is) despite of anything in the market place.

Thousands and thousands of individuals have tried their "luck" on the currency market the past 10 years but only a handful are making a consistent success of currency trading. The average live span of a self directed currency trader is anything from 3 - 6 months before they quit- these are figures that were announced by one of the biggest retail brokers a while back. This makes one think why only a handful are successful and why a whole lot of people claim they are successful currency traders while they are not. One can argue that people would very much like to be successful at currency trading and when they realize they are not making it they simply fake their success by ways of a website claiming that they have discovered the gold mine and the gold.

There are many ways to engage on your currency-trading journey and chances are that you will get hurt, in fact if you go to Google and type in the word learn currency trading will soon realize that every second guy on the Internet has a currency-trading product to sell you.

The proposed steps to start trading are to firstly familiarize yourself with the language used in the Currency Market Place and secondly you need to understand the rules of the Currency Trading Market environment. These two aspects are very important but the most important part is to learn how to think like a profitable currency trader. These three aspects are very important and they are the only potential barriers to prevent you from success. You need to get in contact with a decent Currency Trading service provider, someone who can introduce you to the right and important aspects of Currency Trading. We recommend that you look very selectively when you decide on such a currency trader service provider. Make contact with them and challenge them with questions like "why you should choose them to educate you on the subject of currency trading"? Also check out their website, most of these websites do not give enough information about currency trading and some of these websites simply look trashy!

If you are after decent currency trading education, support and mentorship, you do not need to look further than Euro Traders Euro Forex Trading System. This is a group of Currency Traders who decided to make their system available to the whole wide world and also to back that up with quality support free of charge. What make them different is the fact that they are actually anticipating market activity (like traders should do) rather than discussing what the market have done. "The proof is in the pudding", so the saying goes, so go and have a look at what Euro Traders have to offer and look at what their happy currency trader clients have to say about them

There is after all hope for you to become a profitable self directed currency trader, the question is whether you have the discipline to take the right steps to make it happen. To Your Success!
About the Author

Phil Smulian is a reviewer for Forex training specialists, Euro Forex Trading Systems (www.euroforextradingsystem.com) or for more info on currency trading (http://www.euroforextradingsystem.com/currency-trading.html)

Day Trading - FOREX

From now on, in order to give "The CFD Traders Blog" a bit of variety, I will endeavour to fit in some of the opinions, which have been expressed by other stock market traders.

To start the ball rolling, I have found an article written by Sacha Tarkovsky in which she says day trading in Forex is a waste of time. A view which I do not hold in trading stocks and shares using CFDs - Anyway, this is what Sacha says:

FOREX Scalping - Day Trading Your Way To a Regular Income by: sacha tarkovsky

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There are many day traders who go in for FOREX scalping trading several times a day and trying to get out with small profits which will add up over time.
This form of hit and run trading is more popular than ever.
Let's look at how it works.

Well firstly, it doesn't work at all and will doom your trading to failure - Any trader who day trades or tries to scalp profits loses - PERIOD.

Here we will explain why.

Data is meaningless.

If you are studying charts you need to get the odds in your favour.

This is of course not possible in day trading as all volatility is random and prices can and do go anywhere.

This is obvious when you have millions of people trading trillions of dollars daily.

If you don't have data that can help you get the odds in your favour then it is pointless applying any technical indicator.

Moving averages, support and resistance and pivot points which are useful tools for longer term trading simply don't work in day trading.

There only good tools if you feed them with the right data! And day trading doesn't do that.

Scalping the market is doomed to failure and it's made even worse by the fact it ignores the fundamental rule of investing:

Run your profits to cover your inevitable losses. You are going to have losses even the top traders have them, but you must keep them small and day trading or scalping FOREX markets does this and it of course has a lot of them!

FOREX scalping by its very nature doesn't run profits.

So what do you end up with?

A lot of small profits ( and when your lucky enough to have a winner and it is down to luck) then you get a minor profits which can NEVER cover your losses.

FOREX scalping end up not with the trader scalping regular profits but the trader getting scalped for his entire equity.

FOREX scalping is illogical, based on meaningless data and doomed to failure.

If you want to trade avoid day trading unless of course you want to lose all your equity quickly.


About the Author:

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Sector Trading

I know lots of people trade the Forex market, some as amateures and some traders make a good living out of it doing it full-time as professional traders - at the same time there are a huge number of traders who only concentrate on trading the main Sotcks Indices, like the Dow Jones, SP500 of the USA, UK FTSE100, the German DAX30 and so on ... but if you have been watching the markets for a number of years, you may prefer to trade the SECTORS .....

In my experience trading a certain sector using CFDs is far more managable and rewarding than trading the FOREX market or the indices - some indices are very difficult instruments to trade; NIKKEI225 of Japan for instance has very wide trading ranges and it has been known to have fluctuated many 100's of points on the same day and if you happen not to play it professionally by not having used the correct STOP LOSSES or had a bad "Entry Point" to start with or did not apply a good "money mangement system", specifically if you are only a small trader, you could soon find yourself withdrawing more money out of your bank account to respond to your Broker's MARGIN CALLs; Whereas if you happen to pick a group of companies with the same nature of businesses like the BANKS (banking sector), the MINERS (mining sector), the RETAILERS (retailing sector) and so on ... and have done your financial studies correctly on them i.e. you know the PE ratios of the sector, dividend yeilds, the PEG factor or other fundamental factors which you normally use, and ... in addition to that you are also aware of the highs and lows of that particular sector, then as a trader you have made life a lot easier for yourself ... and the likelyhood that your CFD postion will give you a handsome profit is a lot higher.

Another attraction of trading the sectors on CFDs is that most brokers require only 1% margin for opening a new position, whereas if you just traded the stocks on their own you could be required to outlay a margin of anything from 3% to 20% depending on the broker's requirements.

Also, it is worth bearing in mind that sometimes when you trade a stock like for instance Vodafone or Sage Grp in the UK market, you may not have the necessary fluctuation in that stock to either day-trade the stock or scalp it often enough to give you a profit on the day, whereas in trading the sectors you will find, it will offer you more movements to enable you to take a profit at the end of your trading day. Hence, no need to roll over your position to the next trading day, which will in effect, save you additional costs and will eliminate the risk of your transaction.