Casey's Forex Education Blog – Enjoy the Forex Tips!

A trend line on a forex chart is made to provide valuable information. The most important information that it provides is the direction in which the price is currently moving. These simple lines will help you determine whether the market is moving in an upward direction or a downward direction. They make it easier for a person to identify the points of support and resistance levels for price in the market.

It also helps people find the right positions for making profit and taking the correct protective stops. It will make the entry and exit points clear for the trader. These lines will indicate the points where you can make profits in the market if correctly applied. Trend lines help you make the right decisions and to take profitable positions.

There are different types of trend lines and it would be helpful to understand what each one depicts:

1. Ascending Trend: An ascending trend is any period of time in which the rate of exchange reaches a higher value as compared to the rate earlier. It is an increase in the rate from the rate in the previous period.
2. Descending Trend: A descending trend refers to any period in which the rate of exchange depreciates. When the rate of exchange becomes lower than the exchange rate before it, it is a descending trend.
3. Reversal Trend: A reversal trend means a change in trend. Change is expressed when the rate of exchange changes direction from upward to downward or vice versa after a penetration point. A reversal trend is different from deviation. A deviation means a simple trend change that does not cause a significant change of the trend.

Trend lines could also be classified on the basis of duration such as:

• Primary
• Intermediate
• Short term

When demand for currency is more than the currency supplied, the exchange rate increases. On the other hand, if the amount of currency to sell is less than the amount that traders are willing to buy, the rate at which the currency is offered decreases.

An ascending trend period is a good time to sell currencies. On the contrary, if there is a descending trend, it is the right time to buy. Forex trend lines help to monitor the exchange market and understand the change in trends.

In order to draw a forex trend line and make profits in the market, you need to know the following:

• A trend line in the downtrend is drawn above the pattern information and
• A trend line in the uptrend is drawn beneath the pattern information

A forex trend line in the uptrend is drawn by connecting at least two lowest lows. With a downtrend, the line is drawn by connecting at least two highest highs.

Have you ever met those people that have to be right about everything all the time? I have and they are so annoying because they need to realize that no one is right all the time! In Forex Trading if you are right all the time you are a very rich person. The truth however is that in trading it pays to know when you are wrong. When I first started trading one of the most difficult things for me was to except losses. For example I would have a great streak of like 10 winning trades in a row and I wanted to make it 11. So instead of taking my loss when I should have I would let the trade run against me until it would wipe out all of my losses. Talk about Stupid !!

However it took a long time for me to get out of this habit of wanting to always be right and to win 100 % of my trades. The way I finally got over this problem was to find a logical spot on the chart based on support or resistance.  I also made a firm rule never to place a trade without the stop in place and to also make sure that once the stop was in place do not move it. I was so bad at not wanting to lose that when the price would get near my stop I would actually move the stop.

A stop is a protective barrier that protects your account from futher losses. It is a good thing to have a protective barrier over your account. In my fear of losing I would remove the protective barrier which was an incredible psychological barrier for me to overcome. Once I truly understood the blessing of stops it was not hard for me to use them in my trading.

The purpose of this article is to show you that if i can over come a major psychological hurdle you can too. It is all a matter of how you look at things, perspective and point of view make a big difference in all things. If you look as stops as your friend rather then you enemy you will be much more likely to use them in your everyday trading. I believe that if you use stops in your trading then in the long term used in conjunction with proper money management you trading account can do quite well.

I hope this helps some people.

excellence

In life I believe that anything worth doing should be done with excellence. This is how I approach my trading and everything else I do in my life. Since I am working hard and perfecting everything I do this carries over into my trading as well. If you are lazy in how you do your job then you will be lazy in how you approach trading as well. If you are attempting to be do one trade with excellence but think that you can slide in the rest of your life, you are fooling yourself. The other areas of your life will carry over into trading. I don’t believe that you can compartmentalize yourself and be lazy and hard working at the same time.

I have spoken with many traders recently and I am finding that most of them are going through the motions with their trading and don’t have any intentions changing thier ways. Just yesterday I spoke with a losing trader who had been trading for over 5 years what his strategy was and he said he didn’t have one. I can’t say that I was surprised by his response since there had to be some reason that he was losing. However after seeing these traders time and time again I realize that unless something inside of them changes they will never be successful traders.

I have worked hard at helping all traders to become profitable but they must take responsibility for their own trading.  I give the best trading instruction that I can but ultimately each individual has got to work and learn to be the best trader they can be. That is why I don’t just trade with excellence but I approach every area of my life with excellence. If I am going to take the time do something, why not do it right. Time is valauable and important why am I going to waste my time by doing something half hearted and failing in my efforts.

In conclusion work hard, be your best in everything you do and you will ultimately be successful in everything you attempt.

Don't Rely on the Economy

I Started Online Forex Trading about 2 years ago and I thought I would share with you why I made the switch. I was originally a stock trader and I focused on a buy and hold strategy that I began to practice in the early 1990′s. That strategy worked very well until in the start of the century when we had some catastrophic events that shook the world and the economic foundations. So at that point I began to question my thinking as to why I was willing to risk everything if the market crashed? The more I thought about that the more I realized that the stock market was too risky. So at this point I did not even know that forex trading existed so I pulled out my money and took a savings account that earned practically nothing. One day while reading the financial news I saw an ad on the site I was reading about opening a free forex account. So I did my research and checked out and opened an account. This turned out to be one of the greatest discoveries I have ever made.

I didn’t want to give you a feel good story I also attempt to provide information that you can use in every article that I write. I figured that you all didnt need to hear about the benefits of forex trading because you are obviously convinced as I am. OR else you would not be at a forex site am I right?

So anyways here is the best online forex trading tip of the day.

Keep your strategy simple and don’t over trade. Nick the owner of this site has taught me a great deal about not over trading. You don’t need to make millions of pips to be a major success, as long as you are consistently growing your profits. In due time you will be profitable and successful forex trader. If your strategy is too complex you won’t follow it and you will break your own rules and when that happens you have no structure. I have found in my life that systems and structures help me in everything that I do. However you must have a balance, if you are too rigid you wont be able to adapt when the time to adapt is necessary

Online Forex Trading is a great way to do your investing if you can make it work. Just like any other endeavor you have to work hard to make the success come but I like work and if anything is worth doing it is worth doing well.

Have you seen those crazy marketers that write headlines that say “Forex  Trading Secrets to Make one Million Dollars”?

You may think I am exaggerating a bit, but it is true there are more marketers out there in the forex world then actual traders. So be careful who you listen to on the internet about Forex Trading. Even if they have some good info they might be marketers rather then traders and all a marketer wants is your money.

I truly believe that there is nothing wrong with getting help in learning to trade forex. I believe this because I myself learned from many people that were kind enough to teach me. I believe that these teachers can be paid services or unpaid services. I am a guest writer for this blog so I obviously have favor for Nick and this blog. But this is one of those places that gives great information for free. You can tell that Nick is the real deal and not a marketer because of his consistent information and the great materials he puts out. It is great when you find a source of reliable trading information that is always being updated so you can continue in your education.

Some key points to consider when deciding who to follow for forex information:

• Look for real people that will help you without asking for anything in return.
• People that have a reputation and have continually put out good information.
• Not make promises regarding profit our return on investment.

There are so many sources out there it can be easy to be taken advantage of if you don;t do your homework. The reason I say you don’t have to pay is because I learned all my forex trading secrets without having to pay a dime to anyone. It just took hard work and reaching out and talking to people.

I am not saying that there are not good paid forex services available because there are. I am just saying don’t jump in without doing research. I am also trying to impress the point that hard work will get you where you are trying to go even if you don’t have a paid mentor. If you continue to work at it and seek knowledge then be the one holding the forex trading secrets.

I give Forex Advice for a living and have been learning how people respond to types of instruction.  I believe that it is wise to learn from those that have been through a particular experience that I have not been through and as a result I can benefit from what they have learned. I want to limit the sometimes painful learning curve by going to those that have useful information to share about how to succeed in a certain area or pitfalls that I can avoid.

So in hopes that you will be wise and follow great Forex advice here is the best that I have to offer:

Learn from professionals:

There are some great people like Nick on this site and a few others out there, that are willing to share all there extensive knowledge and skills trading so that others don’t have to make the same mistakes. So read everything available at these sites and learn the strategies they teach. Then ask them questions to get even more information, glean everything that you can get out of these professionals that are so willing to share their secrets. I remember one conversation I had with a young trader and I gave him some instruction and I told him if he continues in his trading style with out changing that you will blow your account. He said to me, I will do it my way and that is how it is going to be. So I just said ok and waited for the inevitable to happen which it did. Let this young traders example be a lesson to you.

Set Realistic Goals:
Many traders have set expectations too high and then when they don’t reach them or fail they get depressed. I want to remind every one to make sure that you must learn to crawl before you can walk.  Start with baby steps or smaller victories, when you reach your goal at that point you can set a new goal and then raise the bar. Momentum is important in trading and to build that momentum it is wise to set achievable goals.

Financial Stability:

It is important to have you financial house in order before you start trading. I have seen many traders that do not have enough money to trade with and they get impatient and will put their last $500 in the bank. When they don’t have enough money to pay all of thier bills.  They do this because they are looking for a way out, a way to get out of their job. Or perhaps they are dreaming of a better financial picture. However what often happens is that they get over extended because of poor decisions and they never trade again.

In conclusion take advantage of wise Forex advice and make sure to ask plenty of questions. If you have any questions please do not hesitate to comment to this post.

Life is full of adversity…

Successful people are those that learn to overcome the adversity that life throws your way. Anything in life that is worth doing is going to come with challenge and adversity. Trading Forex is no different.  I am constantly hearing beginners thinking that they are going to make big money.  The best question I get is how much do I need in my account to start to make a living. If I was after money I would say all you need is 10,000 and buy my system and you will have what you need.

However i am not after money I am after teaching traders to be profitable and making life long friends in the process. Friends tell each other the truth. Every time a total noob asks me how much money they need I tell them “Slow Down” you arent even profitable for one day what makes you think that you are going to make a living at this. Start small and work your way up that is the way to do it. Unfortunately people don’t want to listen to wise counsel, they would rather follow one of those idiots that will promise them 100,000 in profit in there first year of trading.  The $100,000 profit is what the forex trainer gets in profit from over agressive beginners.

I am not knocking the trainer because the beginners need to make money( I am a forex trainer) I am just saying that trading is a battle, you have to win some battles before you win the war. You are going to have some things to conquer. Some pips to capture. Overcome adversity, learn to follow rules, learn to stay out when you need to stay out. Learn patience and discipline.

I think that will be my new nick name “Forex Warrior” or maybe the name of the next hot EA

Thanks for stopping by please leave some comments about how you overcame adversity in your trading.

I have been doing some in person mentoring recently to a complete beginner. When I say complete beginner I mean I had to show them how to get a broker and load the charts.  I admit I got a little bit frustrated but it was good for me to remember exactly how much learning is involved from beginning to end. There is so many things to learn and by helping someone learn in person, I learned to be more patient. I also learned that  when people write me letters explaining that it doesn’t work, that it is ok they are just new. In the past I would throw my hands in the air and say what I can’t believe they need help it is so easy. Well it is easy for me becuase I am trained it is absolutely silly of me to expect more from beginners.

I tell you all of this to be patient with yourself when you are starting out.  There is many things to learn so don’t get overwhelmed and give up. Take one step at a time and keep your expectations realistic. In the first trade I thought I would go over the mulitple lot strategy that I just discussed in my previous post. It turned out that was too much for this individual and they forgot to move their stop to break even. The first target hit but the price moved and stopped out for the rest. If they would have moved the stop loss to break even,  they would have been profitable. I however put the blame on myself for putting too much on the individual on their first trade. So from now on we are going to do one lot, one profit target and one strategy. Until this person masters this and is profitable, then maybe we will move to the next step after a proper evaluation.

So remember take baby steps you have got to crawl before you can walk, and you have to walk before you can run.

Here is a simple strategy that I use to get more pips out of some trades.  When trading it is possible to increase profitability by taking advantage of the trend. There are times when strong trends can go for long periods.  Wouldn’t it be great if we could capture all the pips in any given trade by entering with the trend. This strategy will help with just that.

The plan is going to cover exit rules and not entry rules. This can be used with any entry rules that you are currently using.  When I open A trade I open up 3 lots and I calculate money management techniques that keeps my account 1% risk even with all 3 lots open. Adjust the size of the lots based on your account size as to make sure that you do not over extend your account.

Then set your profit targets on your trade as to where you will take profit. When you hit your first take profit level move the stop to break even. I am a short term trader I like to trade with 5 min charts so my first target profit level is 10-20 pips. When I hit my first level I close one lot and I still have two lots open. Then I move my stop to break even. The next profit level is usually around 50 or 100 pips depending on the particular requirements are for the trade.

After my second level is Hit I like to let the trade run for as long as possible trailing the price by about 100 pips. There are times when I have let the last lot go for over 500 pips. Those trades are free trades because the stop loss is set in place and the risk is limited because the trade is in your favor.

What type of profit taking strategies have any of you came up with?