Many believe that automated currency trading is the only way to go if you want to make money. There is, however, a currency trading system, not automated, available free of cost that’s has been used by many of the world’s best traders. Below is the description of the system which could lead you to your currency trading success.

The system was first discovered in the late seventies, by a trading legend Richard Donchian, when he noted a dependable four week cycle in service markets. Although the system was designated for commodities trade, it worked on any trending markets including the forex currency market.

It is a simple system based on one rule only. No computer is required to do the calculations. All you have to do is: buy a new four week high in a currency and switch the position to a short on a four week low. Let your position be open in the market at all times and keep switching from a high to a low and vice versa. That’s the rule. It’s quite straightforward but it happens to work.

As to the question why it works, it’s because it is based on sound market logic: currencies maintain their trend for long periods and they always start a new trend and maintain them from breakouts to new market highs or lows.

It has been seen that all the best currency trading systems are uncomplicated. There are no relations between complexity and success. Unfortunately, traders mostly are hesitant to use this simple technique, even though it makes money. Most traders are so impressed by the hi-tech robots and automated systems that they are inclined towards buying them. The proof that the software presents are based on back tests and simulations that are done in known conditions. Of course, the results are never repeated. Buyers mostly like the trendy names and most of all the idea of making moneys with no drawdown is too tempting. This attitude leads to dismissing of the above mentioned simple rule, despite the fact that it makes profit.

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Some of the important mistakes are:

1. Lack of planning

When you start trading in stocks, you must plan how to deal with certain critical situations that are most likely to occur. For example, what is the appropriate time to buy or sell a stock? You take to swing trading when actually, according to your circumstances; you should opt for position trading.

2. Over diversification

You have heard that putting all your eggs in one basket may be risky. Therefore you must spread your investments in order to cut down your losses. That is a sound advice. But some people follow this advice blindly. They, therefore, tend to over diversify. In course of over diversification, you lose your focus which is the key to making money in stock trading.

3. Not following a system or a method

You trade in stocks on the information received in form of tips and tricks from the so called insiders and gurus. You are told that your friend’s friend made money using this or that method. You are at once taken it by its surefire efficacy and lose money as soon as you invest. You have not done any research and not developed any strategy or methodology for trading.

4. Lack of money management

Money management is vital for successful stock trading. You must plan how much to invest and how much you can risk. You must invest only the amount that you can afford to lose. Money management also involves retaining the ability to trade tomorrow after making loss today. You have to know where to put stops when the prices are likely to fall.

5. Constant urges to invest

Sometimes you cannot control your urge to invest at every available opportunity without considering your financial situation or the outcome of investment. You want to trade all the time whatever the market trends because you want action. You have no patience to wait for the almost certain trading opportunities when you can make good profits. This is like gambling. You become stressed and lose your much needed balance of mind and focus. You incur losses.

6. Failing to be patient

There are surer ways of making money in stock trading, but you need to be patient. You may, for example, start investing in ETFs where the chances of making profits are the highest. If you want to invest in high value stocks, you may go for fractional shares by investing small dollar amounts. You may begin with investing as low as $3 per trade. You can easily afford to lose this amount which is no big price for learning how to trade in stocks. You learn from your own experience. You do not have to depend on borrowed knowledge which may land you in losses.

7. Failing to take time

Ninety percent of the investors lose because of their greed to become rich over night. Therefore they become easy prey to get quick rich schemes and plans touted by the gurus and software vendors which sell them at $50 dollars a piece. You must not forget the age-old axiom that slow and steady wins the race. Swallowing a hot potato may burn your mouth. It takes time, determination, patience and perseverance to be an ultimate winner in stock trading. You have to build your own tried and tested fund of knowledge and expertise in stock trading. This is a slow but sure process.

8. You did not want to invest in stocks

You entered stock market out of desperation because either you were making losses in your existing business or were fed up with your service and wanted a change. You just came across an attractive advertisement about stock trading and jumped into the fray since there was no other option at the moment. It is suicidal attempt like jumping into a fast and deep torrent without knowing how to swim. It must be noted that you cannot succeed in any trade, howsoever paying and profitable it may be, unless you love it or have passion for it.

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How to Apply Money Management

I believe the best way to learn new things is by practicing and examples. Let us assume that you have a capital of $1,000 (One thousand U.S. dollars) in your forex trading account. You need to set certain rules and apply them to your trading, those rules are:

Size Per Trade

You must put a rule for yourself, for your lifetime trading which is size per trade. How? You need to ask yourself, how many U.S. dollars you are going to use per trade? and how many trades can be left open at a single time? Enough questions, let me answer you.

A $100 trade would possibly have a $1 pip value, trading with leverage of 100:1. So never trade more than 10% of your entire forex account at a time. I am serious about this, all your open trades combined should not exceed 10% of your account. So in our case, you can trade a maximum of $100 from your $1000 at the same time (All Your Trades Combined).

But be careful, if you have a bigger leverage (more than 100:1) with your broker, you need to take down the trade value. Try to keep the total pip value for all trades near $1 or less for a $1,000 account. This step is very serious and trust me it is going to help you in your new forex journey.

Risk Per Trade

This step is mandatory. You must know how much loss or gain you are going to accept. Otherwise, your trade could just loss forever, until all your money is gone! So do not do this mistake, it is very very common. Planning is key to success, plan everything before you start. Oh, show me example please. OK!

Let us say I have $1000, and I bought (longed) Euro/Dollar at 1.5000 rate, the trade is worth $100, and the pip is worth $1. I decided to take a Gain:Loss ratio of 1.5:1. So If I put my stoploss at 1.4950, my TakeProfit would be at 1.5075. Risk (What I can afford to loss) is 50 pips or $50. (5% of your account which is an average for many trades. Some traders even risk 2% only though.) Gain is 75 pips (1.5 X 50) or $75.

Basically that above example shows you how to apply money management rules to your stoploss and takeprofit levels. But now I have some important and real important notes for you.

Important Notes

A. You must plan your trade, put your take profit and your stop loss. B. The above example risks 5% of your account per trade. But many trades risk only 2% per trade. Just do not over risk your capital. C. Leverage heavily modify money management parameters. I highly recommend avoiding any broker with a leverage higher than 100:1. D. The Gain:Loss ratio will be different from a trader to another. In plain words, it is the ratio which controls how much you are willing to risk, to make a certain gain. Your gain ratio should exceed your loss ratio but to be honest it depends on your technique and which system you are using. I will talk about that in later articles.

A Word for New Traders

If you have a technique with 50% accuracy. Yes, only 50% accuracy and a Gain/Loss ratio of 2:1. That means you are making profits on the long run. In theory, things are simple but to do this practical, you need to be a restrict person about your trading experience. Some people have no discipline at all and you can’t blame me for that.

Okay good. Now what we’ve learnt together in this article?

1. Never risk more than 10% of your account per all open trades. 2. Plan your trade, stoploss, and take profit levels. 3. Never! Never risk more than 2-5% of your account per all open trades. 4. According to your system, your gain ratio should well exceed your loss ratio.

Article by Ahmed Fouad, BlogForex.info [http://blogforex.info]. Forex web log with news, commentary, and education center.

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Mark McRae as mentioned earlier owns the website called Surefire Trading, and what he has done is merely taken the six top best strategies that were listed on his Surefire Trading Challenges, which belongs to the competition. He then put these strategies together in one system and used it. He appears to have been very successful with his creation. That is how the Forex Rebellion came into existence. There still are competitions being held. These results may lead to an upgrade to Forex Rebellion or perhaps another system may be developed. If there is an upgrade, it may result in creating a more profitable and less risky system.

The way the Forex Rebellion system works is that it comes with an assistant that has the ability to work with two pairs of currencies and time frames. This course also provides you with many management strategies that will be of benefit to traders of different trading experiences. Users have attributed the system to being easy to operate and very simple. They also testify to the high reporting results of the system producing returns of 40% to 130% return for every month.

If you are wondering if the price to pay for the Forex Rebellion course is worth it, check it out. The reports coming in all indicate that most users are very pleased with the product. They cite easiness of use and that the user does not need to be on the computer all the time like with other programs. There is also a guarantee on this product if you are not pleased with the product for any reason. Rebellion provides you with more options than other robots on the market. Forex MegaDroid, IvyBot, FAP Turbo are just a few of the competitors to Rebellion. Check out Rebellion and see if it is the best trading robot for your style of trading.

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Better Stock Returns

Investors, who are venturing out into the stock market for the first time, often venture into investing when the market is on a high and is extremely bullish. They hear of investment success stories when the economy takes a turn for the better and then they want to get rich too as soon as they can and therefore they invest trying to maximize their returns. However they often don’t invest as wisely as they could have owing to their inexperience. They usually tend to go for the so called ‘hot’ shares, which are already publicized in the media by stock market pundits and then these already popular shares further increase in price due to the increased demand. Such increases in price due to demand leads to too much money chasing too few scrips and that often leads to a sudden turn around in the market depending on how much money is in the stock market.

A very common example of this is the dot com bubble which increased immensely in the late 1990s and then boomeranged and brought down the entire economy. During the peak period of the bubble, there were too few seller and too many buyers, the resulting scenario jacking up prices beyond belief. There was a lot of money which desperately tried to create a demand for something to buy. When professional investors started pulling out their money, it was because they realized that they were paying more for stock which wasn’t worth as much as it claimed to be. They then sold off as quickly as they could in order to exit out of an unhealthy market and then the entire market crashed bringing about the entire dot com bubble to burst.

There are often large booms in the economy depending on how much money is in the stock market, which turn around and soon crash. However it doesn’t mean that you shouldn’t invest in a market which has a lot of enthusiasm. You should however be careful of what you invest in and think twice about paying more that the shares are actually worth. For however enthusiastic a market might be, it will never retain its initial enthusiasm from when it starts to take off.

If you do plan on investing, you should do so with a lot of financial planning, taking into account your current income, expenditure and savings. You should never invest too large a portion of your savings so that you can always regain your financial footing after some time even if your decisions go wrong. You should always maintain contingency funds for financial emergencies and never dip into these for investing in the share market. Neither should you depend on making a profit in the share market for your primary source of income or for money during emergencies.

You must always have a back up plan. For those of us who own homes, we know that furnaces break down, roofs need repair and other unexpected things come up all the time. It is crucial to your overall financial health to have contingencies in place for these types of emergencies.

While the overall goal in trading is always to show a profit, it is critical that you not depend on these profits to handle emergency situations that come up. If you were to lose your job tomorrow would you be able to continue to maintain the lifestyle you are leading today for a period of time (six months is typically a good rule of thumb).

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Because it involves a shorter timeline and fewer risks, the swing day strategy is popular among traders who are still starting to work their way in the foreign currency market.

Trading in stocks of big companies can result in higher profits in shorter duration. Trading of these major stocks, also known as large cap stocks, usually takes place in stock exchanges. Higher variations can be seen in their prices compared to other stocks, thus implying increase in profits for the swing traders. Usually, a swing trader sticks to a particular stock as it increases in value but may move to another stock if the trend changes. Thus, a swing trading strategy would only be successful if the right stock has been chosen.

For a swing trading strategy to ensure success and profits for the swing trader, the choice of market is also a crucial factor. The movement of the stock prices in a market with a rising or falling trend takes a single direction. This single direction of movement would lead to lesser profitable variations for the swing trader. A stable market is more appropriate for swing traders where the rise of the index is immediately followed by its fall.

There are limitations to the preparations you can take prior to the trade. A degree of risk avoidance is also involved in the process. In trading, you will eventually learn more about the craft through an actual experience and exposure to risks and losses. Swing traders also use different approaches and follow different perspectives. Thus, the average return in swing trading greatly varies. Using a portion of the capital is a good idea to manage risks for those who have already been in the field for quite some time. But, it does not hold true for the newcomers and beginners. Taking positions that are greater than what your tolerance for risk can handle would be detrimental to your performance. Swing traders should focus their efforts and concentration on generating the movement of the price. Likewise, you should also be motivated to be a better trader because that would entail more money coming in. New swing traders are also not advised to put in a large amount of money in their account for their initial trades. It can bring a newcomer more losses than gains. At the initial stage, the maximum recommended capital is $35,000.00.

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Pauline Go is an online leading expert in the finance industry. She also offers top quality articles like :
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