The prefect Forex trading strategy secrets

Chapter 1: Forex Broker: Choosing the right Forex BrokerSometimes it's hard to make a decision on which Forex broker to open our trading account, there are just too many of them. Most of them have different features, capabilities, weaknesses and advantages, for this reason I have created a checklist that can help you decide the broker to use in your Forex adventure.1. Is it regulated?The first question you have to ask yourself is: is the broker I want to use Regulated ? There must be no doubt about this first point. All regulated brokers must submit financial reports to regulatory authorities, and when they fail to do it, authorities have the right to fine them or terminate their membership. This enforces Forex brokers to keep transparent financial reports.The brokers must be regulated by their local regulatory authorities, for instance, for brokers based in the US , they must be regulated by the NFA (National Futures Association) and CFTC (Commodity Futures Trading Commission), Swiss based brokers must be regulated by the FDF (Swiss Federal Department of Finance) and so on.Also when a Forex broker is regulated allows investors to dispute any resolution, increasing the investor protection.2. Trading ConditionsThis point refers to the features of the trading platform and the trading conditions with the chosen broker. Amongst the most important factors are:Spread - Obviously the smaller the spread on currency pairs the better the conditions are for investors and traders.Platform execution - Trading execution refers to how fast and consistent are the execution of trades. Some brokers guarantee fast and transparent executions during normal market conditions.Fractional trading - Some brokers allow investors and traders to trade on a fractional basis, instead of trading full lots "100,000 units" or "300,000 units", they allow you to trade "163,345 units" or "325,911 units". This is very helpful for trades risking certain percentage of their balance on each trade.Safety of funds - We need to make sure our trading funds are kept in a segregated account or at least insured.To learn more about how to make good profits trading forex, please visit: www.fapturbo.comChapter 2: Incorporating Price Action into a Forex Trading SystemTrading the Forex market has become very popular in the last few years. But how difficult is it to achieve success in the Forex trading arena? Or let me rephrase this question, how many traders achieve consistent profitable results trading the Forex market? Unfortunately very few, only 5% of traders achieve this goal. One of the main reasons of this is because Forex traders focus in the wrong information to make their trading decisions and totally forget about the most important factor: Price behavior.Most Forex trading systems are made off technical indicators (a moving average (MA) crossover, overbought/oversold conditions in an oscillator, etc.) But what are technical indicators? They are just a series of data points plotted in a chart; these points are derived from a mathematical formula applied to the price of any given currency pair. In other words, it is a chart of price plotted in a different way that helps us see other aspects of price.There is an important implication on this definition of technical indicators. The fact that the readings obtained from them are based on price action. Take for instance a long MA crossover signal, the price has gone up enough to make the short period MA crossover the long period MA generating a long signal. Most traders see it as "the MA crossover made the price go up," but it happened the other way around, the MA crossover signal occurred because the price went up. Where I'm trying to get here is that at the end, price behavior dictates how an indicator will act, and this should be taken into consideration on any trading decision made.Trading decisions based on technical indicators without taking price action into consideration will give us less accurate results. For example, again a long signal generated by a MA crossover as the market approaches an important resistance level. If the price suddenly starts to bounce back off that important level there is no point on taking this signal, price action is telling us the market doesn't want to go up. Most of the time, under this circumstances, the market will continue to fall down, disregarding the MA crossover.Don't get us wrong here, technical indicators are a very important aspect of trading. They help us see certain conditions that are otherwise difficult to see by watching pure price action. But when it comes to pull the trigger, price action incorporation into our Forex trading system will definitely put the odds in our favor, it will generate higher probability trades.So, how to create a perfect Forex trading system?First of all, you need to make sure your trading system fits your trading personality; otherwise you will find it hard to follow it. Every trader has different needs and goals, thus there is no system that perfectly fits all traders. You need to make your own research on various trading styles and technical indicators until you find a concept that perfectly works for you. Make sure you know the nature of whatever technical indicator used.Secondly, incorporate price action into your system. So you only take long signals if the price behavior tells you the market wants to go up, and short signals if the market gives you indication that it will go down.Third, and most importantly, you need to have the discipline to follow your Forex trading system rigorously. Try it first on a demo account, then move on to a small account and finally when feeling comfortably and being consistent profitable apply your system in a regular account.To learn more about how to make good profits trading forex, please visit: www.fapturbo.comChapter 3: How to Make Money in Sideways Market?The key point for swing trading is finding a market that is trapped in a sideways trading range (also called a congestion area), or in an up-trending or down-trending channel on the chart (remember, channel!). When observing from the chart, the trader must be able to distinguish some clear support and resistance levels that are boundaries of the congestion area or channel.When a market price comes close to the support or resistance area boundary, the trader will establish a position: long if prices are moving lower and close to the support boundary, and short if prices are moving higher and toward the resistance boundary. It sounds simple, but remember, trading contains a lot of surprises. The price might break out the support or resistance boundary anytime, therefore skills to response quick, or good money management strategies are always critical characteristics of a seasoned trader.Swing trading techniques can be used in any chart time frame -- daily, weekly, monthly and intra-day charts. Nevertheless, the most popular timeframe for swing trading is the daily bar chart.Note that the strength of the support and resistance at the boundaries is usually determined by the number of times the market has pivoted at the boundaries. The rule isthat the more times a market has reached a support or resistance boundary, and then reversed course, the more powerful is that boundary. It can also be said that the longer continues a channel, the more reliable is that channel. Thus, a trader wants to find a well-established channel or trading range for which to attempt to swing trade.An exception to this is a market that has been in a trading range, but is bound by one or two powerful spike moves, which also indicate a strong support or resistance boundary. That means some congestion areas that may offer a good swing-trade opportunity do not require several pivot points. In fact, those one or two spike levels would be determined to be a potentially good pivot area for a market.The swing trader should still use tight protective stops. As I mentioned, a breakout can occur anytime, might due to bad political news etc…Good money management strategies will keep traders out of problems. A good area to place a protective stop is just outside of a support or resistance boundary that makes up the trading channel or congestion area. For instance, if a market in a trading channel is nearing the upper boundary of that channel, the swing traderwould establish a short position and would want to place his protective buy stop just above the resistance level that serves as the upper boundary of the trading channel. In contrast, if a market is nearing the lower boundary, the swing trader would establish a long position and place his protective sell stop just above the support level.To learn more about how to make good profits trading forex, please visit: www.fapturbo.comChapter 4: How To Trade With Stochastics?The stochastic oscillator is a momentum indicator to compare the closing price of a commodity to its price range over a given time span. The idea behind this indicator is the prices tend to close near their past highs in bull markets, and near their lows in bear markets. Transaction signals can be spotted when the stochastic oscillator crosses its moving average.Two stochastic oscillator indicators are typically calculated to assess future variations in prices, a fast (%K) and slow (%D). Comparisons of these statistics are a good indicator of speed at which prices are changing or the Impulse of Price.The two Stochastics lines: %K – Is the main line and is usually displayed as a solid line %D – Is simply a moving average of the %K and is usually displayed as a dotted lineThere are two well known methods for using the %K and %D indicators to make decisions about when to buy or sell stocks. The first involves crossing of %K and %Dsignals, the second involves basing buy and sell decisions on the assumption that %K and %D oscillate.In the first case, %D acts as a trigger or signal line for %K. A buy signal is given when %K crosses up through %D, or a sell signal when it crosses down through %D. Such crossovers can occur too often, and to avoid repeated whipsaws one can wait for crossovers occurring together with an overbought/oversold pullback, or only after a peak or trough in the %D line. If price volatility is high, a simple moving average of the Stoch %D indicator may be taken. This statistic smoothes out rapid fluctuations in price.In the second case, some analysts argue that %K or %D levels above 80 and below 20 can be interpreted as overbought or oversold. It is recommended that buying and selling be timed to the return back from these thresholds. In other words, one should buy or sell after a bit of a reversal. Practically, this means that once the price exceeds one of these thresholds, the investor should wait for prices to return back through those thresholds (e.g. if the oscillator were to go above 80, the investor waits until it falls below 80 to sell). In currencies we mainly use the Stochastic Oscillator on the 15 and 60 minute charts.Use Stochastics in Trending market The key is when the market is trending up, we will look for oversold conditions (when the Stochastics fall below the oversold level (below 20) and rises back above the same level) to get ready to trade, and in the same way, when the market istrending down we will only look for overbought conditions (when the Stochastics rise above de overbought level (above 80) and falls back below the same level.Use Stochastic in Trend-less market Buy when %K falls below the oversold level (below 20) and rises back above the same level. Sell when %K rises above de overbought level (above 80) and falls back below the same level.To learn more about how to make good profits trading forex, please visit: www.fapturbo.comChapter 5: Using Percent R Indicator to Trade - Get Precise SystemIn his original work, Williams' method focused on 10 trading days to determine a market's trading range. Once the 10-day trading range was determined, he calculated where the current day's closing price fell within that range.The %R study is similar to the Stochastic indicator, except that the Stochastic has internal smoothing and that the %R is plotted on an upside-down scale, with 0 at the top and 100 at the bottom.The %R oscillates between 0 and 100%. A value of 0% shows that the closing price is the same as the period high. Conversely, a value of 100% shows that the closing price is identical to the period low. The Williams indicator is designed to show the difference between the period high and today's closing price with the trading range of the specified period. The indicator therefore shows the relative situation of the closing price within the observation period.The trading rules are simple. You sell when %R reaches 20% or lower (the market is overbought) and buy when it reaches 80% or higher (the market is oversold). However, as with all overbought/oversold indicators, it is wise to wait for the indicator price to change direction before initiating any trade.Larry Williams defines the following trading rules for his %R: Buy when this percent reaches 100%, and five trading days have passed since 100% was last reached, and after which it again falls below 85/95%. Sell when %R reaches 0%, and five trading days have passed since 0% was last reached, and after which the Williams %R again rises to about 15/5%.To learn more about how to make good profits trading forex, please visit: www.fapturbo.com