Posted on October 26th, 2010 by Rapid Forex3 Comments »
Want to teach yourself forex trading?
There’s stuff that forex charts will teach you that I simply can’t. So I have a simple challenge for you this week…
Watch 3 Currency Pairs This Week
I’ve selected three currency pairs for you to watch. The exercise is very simple.
Step One: Fire up a Forex Chart. If you’d like a great free chart, use the free netdania chart from dailyfx.com. This chart is great because it has all the basic tools and you can just go there with your browser. No account needed.
Step Two: Open up a window for each of these three currency pairs: EUR/USD, GBP/JPY and AUD/CHF. I chose these three currency pairs because they contain 6 different currencies. This way you’re guaranteed to see three different, completely unrelated chart patterns.
Step Three: Draw trendlines on Daily, 4-hr and 1-hr charts.
Step Four: Watch what happens. 2-5+ times a day look at these charts. Keep the same trendlines that you originally draw. In your head form a guess as to what might happen. To think like a trader, you’ll want to guess several different “what if” scenarios.
Don’t Skip This Because It’s Simple
I know you’re thinking that this is a little too simple.But hear me out...
Depending on your level of experience, you may be trying “too hard” to be right!
A beginner doesn’t know what to do. Before even trying to make trading decisions, JUST WATCH THE CHARTS!
Watch the live charts to see what happens. Just be curious as if you were watching an ongoing sports game. You don’t have to be right or wrong, just be curious.
You’re never going to be a successful forex trader online unless you get used to looking at forex charts often. Why not take your time and just get a good feel for the charts?
This is also a great time to look for the patterns you’ve been learning about.
Forex Chart Exercise Video
Watch the video below to see how to go through your forex charts and “what you should do” to set them up
Posted on March 19th, 2010 by Rapid Forex37 Comments »
You just discovered online forex trading and you want to get started trading forex with the best online forex broker. Where do you turn when there are so many different brokers offering seemingly different offers? In this post I’ll help you pick the best online forex broker for your needs.
There are five main things to consider when picking online forex brokers:
Do you like their forex charts?They all have free charting software included, but each broker’s forex charts will be different. You can usually try the forex chart software for free in a demo (practice) account.
Do you like their platform? You should be able to easily navigate any online forex broker’s platform. Placing market, limit and stop orders should be easy for you to understand and do. You can practice this in a forex demo account.
How much to open an account?The minimum will vary according to the forex broker. This could be as low as $25, or several thousand depending on the online forex brokers you look at.
What’s the spread? The spread is the difference between the bid & ask price. Tighter spreads (smaller numbers) means more money for you. Most brokers will be fairly competitive.
Are they legit? Although legitimate new forex brokers emerge online from time to time, avoid brokers that are brand new, don’t have a professional website, don’t have a decent alexa rating (should be under 200,000). Alexa Tip: search for a website and you’ll see it’s alexa rating. If they aren’t in the top 200,000 worldwide, they are too new or too rinky-dink for you to mess with them.
So how do you pick the best forex brokers online?
Option #1 (laborous, full due dilligence): If you want to go through lists of online forex brokers to make sure you’re getting the best deal, you can check out forex-ratings.com for comparisons of online forex brokers. They’ve got a list 49 top online forex brokers along with ratings. I don’t fully agree with the ratings personally, but it is a good list to examine if you’re looking to do some research.
Option #2 (easy, follow my picks): Over the past 10 years, I’ve seen plenty of online forex brokers come and go. Here are my top five picks for the best online forex brokers. I’m picking them because I’ve either used them, or people I know and trust have used them. My picks also all pass my 5 guidelines above for good forex brokers.
Fxcm (Forex Capital Markets) – I’ve always liked FXCM. I started in my first demo account almost 10 years ago with them, and I’ve always liked using their platform. I’ve found it easy to use and they are a completely legitimate online forex broker. Plus with their micro-lot account, you can now trade forex for only $25!
ACM – The favorite of many forex traders that I know. Their platform is a little more advanced, but when you trade forex online for awhile you’ll start to like ACM more (like when you try a MAC, you understand how difficult windows is).
Easy Forex – The name says it all. A good broker for beginners. They are well established and have a great reputation for an online forex broker. Their platform and free forex charts are easy to use & you’ll enjoy using them.
eToro – this broker has managed to emerge everywhere online virtually overnight. They may have gotten a higher ranking on my list (as they did on forex-ratings.com), but I haven’t had a chance to check them out yet, but from what I can tell they are a decent forex broker. This is one broker I will be checking out soon, but I believe you’d be safe if you checked them out before I did
Oanda – this is a major forex broker that’s been online for a long time. They cater to slightly more experienced traders, but beginners can use them successfully. They call a demo account an “fxgame account,” but it works the same as a demo.
There are certainly other good forex brokers online, but these are my top 5 short list of the best online forex brokers. If you were to pick any one of the 5 forex brokers above, you’ll probably have a great experience with their demo account, trading platform, and forex charts. If you want even more forex broker choices, feel free to explore 49 forex brokers & reviews to choose from!
There are three fundamental types of moving averages commonly used in online forex trading: simple, weighted, and exponential. These are commonly referred to as the SMA, WMA & EMA.
The benefit of moving averages is that they reflect longer-term changes in the price, effectively smoothing out day-to-day volatility (of course there are cool volatility indicators which I’ll share with you soon).
The more periods you include in your moving average calculation, the smoother the average line will be. I’ll discuss the periods online forex traders generally use for each type of moving average indicator.
The Simple moving Average (SMA)
The simple moving average is calculated just as you would calculate an arithmetic average of anything (take the sum of the parts, then divide by the number of parts).
The arithmetic average is recalculated at the beginning of each new period such that the same number of periods are always included (for example, if I were to calculate a moving average based on 10 periods of data, as soon as a new period closed, I would add that to the calculation as the 10th period and drop what was the 1st period). In this way the average moves with the market.
The Weighted Moving Average (WMA)
A weighted moving average weights more heavily more recent price data (the more recent periods received a larger weight than older periods do). The weight changes from day to day in order to more heavily weigh recent data.
A weighted moving average, while somewhat more complicated than the simple moving average, can be more useful because it offers more information about recent movement (which, in turn, can offer more information about future movement).
The Exponential Moving Average (EMA)
Another type of weighted moving average is the exponential moving average. While the weighted average is calculated using different weighting factors determined by the trader, the exponential moving average is weighted by multiplying a percentage of the current period’s price by the previous period’s average price. An exponential moving average can be a very useful tool in understanding the overall movement of the market over time, and in forecasting potential future movements.
Moving Average Forex Trading Notation
In many forex trading books, courses and seminars you’ll see the following notation:
SMA(14) – a simple moving average calculated over the last 14 candles
WMA(30) – a weighted moving average calculated over the last 30 candles
EMA(60) – an exponential moving average calculated over the last 60 candles
This is a helpful way to show you how many periods the moving averages occur over. I also use this notation because it makes simple sense!
There are several different techniques that traders use with moving averages. Moving averages can be used as average price lines, which, if crossed, signal potential reversals. Moving averages can also be used together (two or more moving averages that incorporate a different number or periods) to generate buy and sell signals (this use is called moving average crossover).
I’ll be discussing moving averages ALOT in future blog posts. For today, I simply wanted to introduce you to them to make sure you were familiar with moving averages in your online forex trading.
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