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BitcoinExchangeGuide

Best Bitcoin Exchanges – Cryptocurrency Trading Websites for 2019

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As more and more people are becoming increasingly interested in trading cryptocurrencies, and with the existence of numerous thriving cryptocurrency exchanges, it is necessary to assist these newcomers in selecting a suitable cryptocurrency exchange. This is the aim of this article.

 

This article is an insightful guide, covering analysis of the top Bitcoin cryptocurrency exchanges in the market presently and is directed to people looking to gain a base knowledge about cryptocurrency exchanges and also for other cryptocurrency enthusiasts.

 

Before we go into the details of the top-ranking cryptocurrency exchanges for trading Bitcoin and altcoins, we need to first understand what a cryptocurrency exchange is.

 

What Is a Bitcoin Cryptocurrency Exchange?

A Bitcoin cryptocurrency exchange is an online platform where Bitcoins and other altcoins are bought and sold by matching buyers with sellers. Just like every other commodity, the price of Bitcoin is determined by supply and demand. There are Bitcoin exchanges spread across the globe, which provides support to different users across regions. There are numerous functions carried out by crypto exchanges, however, most of them possess varying functions.

Some exchanges approve fiat currency-based transactions while others carry out the only cryptocurrency. Some Bitcoin exchanges are supervised by regulatory bodies while others are not. It is worth mentioning though that a good cryptocurrency exchange should allow for supervision from the authorities to ensure that its users’ funds and information are protected. Some exchanges don’t sell Bitcoins at any cryptocurrency for that matter, rather they create a means for their users to make “bets” on price fluctuations of a cryptocurrency.

There is a truckload of Bitcoin exchanges to choose from and this guide will make it easier for the reader to make a decision.

 

 

Questions to Answer Before Choosing a Bitcoin Exchange

 

1- Is the exchange affordable?

When choosing an exchange, you have to look out for the costs of using that platform. If an exchange charges excessive fees per trade and you just happen to be a frequent trader, it means that you will be spending a whole lot on commission fees and this could eat into your profits. You also need to find out how much is charged for overnight fees, withdrawal fees as well as deposit charges.

 

2- Is the exchange compliant with regulations?

You also have to find out if the exchange you plan on adopting governed by regulatory agencies. The reason for this is to ensure that the exchange is obeying the set rules by the authorities thereby protecting you, the user, from negative market occurrences like hacks, market manipulation and so on. Some of this regulatory body include the CySec and the FCA.

 

3- Do they have responsive customer service?

This is a very important aspect of selecting an exchange. You want to make sure that the exchange you’re using has an active customer care service to assist you in times of uncertainty or confusion.

 

4- Is the exchange highly liquid?

You need to find out if your desired exchange has a constant inflow of liquidity so your transactions can be carried out without much delay. In a situation where liquidity is poor, facilitating transactions will be very problematic which could render the trader stranded

 

5- Is it available for your location?

You need to find an exchange that renders services to your locality. Also, you need to make sure that the exchange remains accessible even in an event where they change location.

 

6- Is the exchange site trustworthy?

Be sure to always look out for indications of authenticity and trustworthiness of the exchange website.

 

7- Are they offering professional trading on your behalf?

It should be noted that any crypto exchange platform that is promising to offer you “professional trading services” for a fee or whatever reason, is a sham and as such should be avoided at all costs.

 

Best Bitcoin Sites for 2019

Now that we know what to look out for before choosing an exchange, let us look at a suitable platform with their features, advantages, and disadvantages. In no particular order, listed below is the 2019 best cryptocurrency exchange/site.

 

CryptoRocket

CryptoRocket is an offshore brokerage which is owned by CryptoRocket Limited and is registered and situated at St. Vincent and the Grenadines. This platform uses a MetaTrader 4 trading system and it offers a variety of assets ranging from forex to stocks, cryptocurrencies, indices and a hist of other assets for its users to trade on. The cryptocurrency section offers trades on Bitcoin, Monero, Zcash, Ethereum, Tron and a lot more.

 

Pros and Cons

Pros:

It offers a great variety of cryptocurrencies and other assets to choose from.

It doesn’t require excessive verification procedures.

It has a delightful user-friendly interface.

It requires zero fees on deposits, withdrawals, and other transactions.

Cons:

There are no cryptocurrency wallets available on this platform.

It has limited payment options.

It currently does not operate in a lot of countries including the United States.

 

Binance

Binance is a Hong Kong-based cryptocurrency exchange previously situated in China, where they subsequently moved to Japan, Taiwan, and finally Malta in search of a more suitable national regulation. Binance is the largest cryptocurrency trading platform in the world, as regards volume. Binance offers a wide array of cryptocurrencies available for trade including Bitcoin, Ethereum, Tether, and their native coin BNB.

 

Pros and Cons

Pros:

It doesn’t require excessive verification to trade cryptocurrencies. Just your email will do.

It allows cryptocurrency deposits as well as fiat currencies.

It offers a great selection of up-to-date cryptocurrencies.

Cons:

Binance is the most targeted exchange from hackers and phishers.

Verification becomes slow when looking for extended limits.

 

Coinbase

Coinbase is an American-based fiat-cryptocurrency exchange that accepts US dollars, as well as other specific fiat currencies, in exchange for Bitcoin, Ethereum, Litecoin, Ethereum Classic, Bitcoin Cash, and Ripple. Coinbase is a very sort after crypto exchange because of its wide availability and its user-friendly platform. However, Coinbase is among the most costly Bitcoin exchanges to use. This is a result of the impressive level of investor protection they offer their customers.

 

Pros and Cons

Pros:

In Coinbase, you own the Bitcoin or the crypto asset you’re buying on the exchange.

There is no need to make deposits of funds when you want to buy Bitcoin (for instance those who use credit cards).

The Coinbase platform has a user-friendly interface and is easy to understand by newbies.

Also, on Coinbase, the fees required for credit card transactions are very low.

Cons:

The trading fees charged by Coinbase are relatively higher compared to those charged by other top cryptocurrency exchanges.

The credit card charges are also relatively high compared to other top exchanges.

 

24Options

24Options is one of the best trading platforms for Bitcoin and other cryptocurrencies. This platform gained a great deal of fame when they carried out a market strategy that involved supporting and sponsoring a football giant, Juventus. 24Option trades traditional cryptocurrencies as well as CFDs. The platform, which has an impressive user-friendly interface, also trades other assets including stocks, commodities, and forex. 24Option has indicated interest in exploring Cannabis stocks, which is currently a booming sector in the global markets.

 

Pros and Cons

Pros:

They accept payment methods from electronic wallets, credit and debit cards, as well as bank transfers.

They adhere to regulations set by regulatory authorities (CySec, FCA) which ensures the protection of the user, in this case, you, from unfavorable events in the market.

The platform allows a minimum deposit of $100 US dollars, making it favorable for those looking to test the platform with a small amount before fully investing in it.

Cons:

It has different account levels which are very expensive.

It is not operational in many countries around the world, including the United States.

 

Coinmama

Coinmama is a cryptocurrency exchange that was created as well as became fully operational in early 2013. This exchange is available globally as it provides services to as many as 188 countries. It became popular in 2017 when it was discovered as one of the exchanges with the fastest purchasing processes in trading Bitcoin and other altcoins using a debit or credit card.

 

Pros and cons

Pros:

It is readily accessible to a wide range of locations.

Credit cards, debit cards, and bank transfer payment methods are accepted by this exchange.

Coinmama continuously tries to expand the cryptocurrency pairs it offers.

Cons:

It is a very expensive exchange platform to use.

It restricts users from selling back their cryptocurrencies.

 

Bittrex

Bittrex is another major American-based cryptocurrency exchange that enables trades on hundreds of altcoins including Bitcoin. Bittrex used to be the lowest charging exchange in the industry with a fee of 0.25 percent per trade until Binance came into play. However, Bittrex is still one of the best options when it comes to routine buying and selling as well as providing access to several “obscure” altcoins.

 

Pros and Cons

Pros:

Bittrex has a very strong trading selection, and they consistently provide useful updates to the platform to keep abreast of the ever-increasing advancements in Blockchain technology.

It charges decent commission rates for executed transactions.

Cons:

It is quite expensive for customers who trade frequently.

 

Gemini

Gemini exchange was founded by the Winklevoss Twins in October 2015. Cameron and Tyler Winklevoss gained their popularity when they sued Mark Zuckerberg over Facebook. Gemini is a very solid crypto exchange that offers cheap fees, advanced order type and a varied selection of altcoin. Gemini is based in New York and is striving to attain the highest level of FinTech licensing that the state can grant. This makes Gemini a sort after platform for both institutional and individual investors to trade Bitcoin and other altcoins.

 

Pros and Cons

Pros:

Gemini exchange is considered to be affordable for a fiat-inclusive exchange.

It offers very trustworthy and secure services.

It enables fiat deposits and withdrawals.

Gemini is a high volume exchange thereby ensuring that the user transactions/trades can always be carried.

Gemini is also easy to use and understand.

Cons:

There is a limited option for trading altcoins.

The platform doesn’t enable mobile support.

It doesn’t allow for margin trading.

The only fiat currency it accommodates is the US dollar.

 

Bitfinex

Bitfinex, founded in 2012, is one of the oldest cryptocurrency exchanges and has its headquarters in Hong Kong. This exchange accounts for a substantial amount of the daily volume of Bitcoin and other altcoins around the globe. Bitfinex offers margin trading and lending across about 263 crypto assets which include crypto-to-crypto pairs and crypto-to-fiat pairs, thanks to its BVI entity. Unfortunately, this exchange is not available to United States citizens. Bitfinex boasts of having one of the strongest user interfaces among crypto exchanges.

Though this exchange was involved in the unaudited growth of Tether and other scandals, Bitfinex has mended its ways by avoiding scandalous activities and by providing a high quality of service to its customers.

 

Pros and Cons

Pros:

It has a complex yet intuitive trading platform.

It has a strong selection of cryptocurrency assets including Bitcoin for its users to choose from.

Cons:

It doesn’t support mobile use.

It is unavailable in the United States.

 

Kraken

Kraken is a Canadian-based crypto exchange which has a strong selection of altcoins and offers a wide array of trading options. They also offer margin and leverage trade. Kraken seems to be struggling with advancing with market trends, but it still tries to keep up in one way or the other. Even though Kraken struggles with high trading volume on some days, it still functions as it should.

The CEO of Kraken, Jesse Powell is advocates the good customer service promised by the platform by being publicly active on social media and responds to inquiries and criticism by customers.

 

Pros and Cons

Pros:

It provides margin and leverage trading.

It has a very strong customer service system.

It supports trading of a good selection of crypto assets including Bitcoin.

Cons:

It has a slow-paced development process.

 

ShapeShift

ShapeShift is among an important class of exchanges that instantaneously provides liquidity for crypto-traders without requiring any identification from these traders. ShapeShift has been integrated into a selection of trading wallets for inter-wallet trading.

This exchange is concerned about its customers’ convenience and is an exchange that will always be consistent with its services.

 

Pros and Cons:

Pros:

ShapeShift is a very convenient exchange.

It has a strong online presence and is available in popular wallets.

Cons:

It is costly to utilize.

It has liquidity related issues on rare occasions.

 

Changelly

Changelly is another exchange that provides instant liquidity for traders on the go. Just like ShapeShift, Changelly’s API brings speedy trading to different wallets as well as other crypto applications. This kind of exchange fills a very important section of the crypto industry.

Pros and Cons:

Pros:

Just like ShapeShift, Changelly is also a very convenient crypto exchange.

It is built into popular cryptocurrency applications.

 

Cons:

It is equally costly to utilize.

It faces occasional liquidity issues.

 

KuCoin

KuCoin has been dubbed the Binance clone by some because it offers many of the benefits that come with Binance; discounted fees, cheap trading with proprietary crypto, and it provides a wide selection of assets.

Whether this exchange is a Binance copycat or not, it sure provides an excellent trading platform for its users.

 

Pros and Cons

Pros:

It provides cheap fees to its users.

It provides access to a good number of coins as well as “obscure” coins.

 

Cons:

It is feared as not adequately regulated.

All in all, Binance trumps every other exchange in the aspect of affordability. In Binance, traders are charged a measly 0.10 percent for every by or sell order. This figure is way lower than the industry average. To make it even more unbelievable, Binance offers a 50 percent discount (0.05 percent) for traders using the exchange’s native coin, BNB. Even though other copycat exchanges try to mimic the payment structure of Binance, they never seem to attain better pricing.

 

However, some CFD brokerage like Robinhood offers a zero charge trading fee (0.0 percent), although these companies make their money from spreads and other subtle means. This means that the traders still pay a fee, they just don’t notice it.

 

So What Exactly is a CFD?

A CFD (Contracts For Difference) is a category of a cryptocurrency exchange that does not sell any cryptocurrency asset instead, CFD brokerages create a means for users to “bet” on the price of Bitcoin and other altcoins. CFDs are the way to go for traders looking to trade Bitcoin without having to deal with the stress that comes with owning a Bitcoin asset.

However, the stakes are higher when it comes to CFDs. It is easier to lose one’s trading capital on a CFD. Only experienced and adept traders are advised to venture into CFD trading. So, if you want to trade the real thing, go with a conventional Bitcoin exchange and not a CFD.

 

Categories of Bitcoin Exchanges

There are two distinct categories of Bitcoin exchanges; centralized and decentralized. Simply put, centralized exchanges are exchange platforms that approve the use of fiat currency (US dollars, British Pounds, Japanese Yen) as a means of payment, while decentralized are those that accept only cryptocurrencies as means of payment.

 

Characteristics of Centralized and Decentralized Exchanges

Centralized:

Centralized exchanges are very compliant with stringent rules and regulations. This exchange also provides a higher level of security to its investors as compared to other exchanges.

However, centralized exchanges have a limited range of services that they offer.

Decentralized:

Unlike centralized exchanges, decentralized exchanges offer a wider variety of services to its customers. Also, they don’t adhere to strict rules and regulations proffered by regulatory bodies. However, this feature leaves it open to several fraudulent activities and renders it susceptible to hacks.

 

Final Thought

There are a plethora of cryptocurrency platforms in existence today. Some of these platforms should never be explored because they can leave you susceptible to hacks and fraudulent losses. This guide is intended to be an eye-opener for the reader and to help the reader navigate through cryptocurrency exchange selection.

 

 

Source: https://cryptoevent.io/news   

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If a trade is in your favor, let it run. It is often tempting to close out at a small gain in order to protect profits, but oftentimes we see that patience can result in greater gains. But if the solution is so simple, why is the issue so common? The simple answer: human nature. In fact this is not at all limited to trading. To further illustrate the point we draw on significant findings in psychology. A Simple Wager – Understanding Human Behavior Towards Winning and Losing What if I offered you a simple wager on a coin flip? You have two choices. Choice A means you have a 50% chance of winning 1000 dollars and 50% chance of winning nothing. Choice B is a flat 450 point gain. Which would you choose?         Expected Return Gains Choice A 50% chance to Win 1000 50% chance to Win 0 Expect to win $500 over time   Choice B Win 450   Win $450 Over time it makes sense to take Choice A—the expected gain of $500 is greater than the fixed $450. Yet many studies have shown that most people will consistently choose Choice B. Let’s flip the wager and run it again.         Expected Return Losses Choice A 50% chance to Lose 1000 50% chance to Lose 0 Expect to lose $500 over time   Choice B Lose 450   Lose $450 In this case we can expect to lose less money via Choice B, but in fact studies have shown that the majority of people will pick choice A every single time. Here we see the issue. Most people avoid risk when it comes to taking profits but then actively seek it if it means avoiding a loss. Why? Losses Hurt Psychologically far more than Gains Give Pleasure – Prospect Theory Nobel prize-winning clinical psychologist Daniel Kahneman based on his research on decision making. His work wasn’t on trading per se but clear implications for trade management and is quite relevant to FX trading. His study on Prospect Theory attempted to model and predict choices people would make between scenarios involving known risks and rewards. The findings showed something remarkably simple yet profound: most people took more pain from losses than pleasure from gains. It feels “good enough” to make $450 versus $500, but accepting a $500 loss hurts too much and many are willing to gamble that the trade turns around. This doesn’t make any sense from a trading perspective—500 dollars lost are equivalent to 500 dollars gained; one is not worth more than the other. Why should we then act so differently? Prospect Theory: Losses Typically Hurt Far More than Gains Give Pleasure Taking a purely rational approach to markets means treating a 50 point gain as morally equivalent to a 50 point loss. Unfortunately our data on real trader behavior suggests that the majority can’t do this. We need to think more systematically to improve our chances at success. Avoid the Common Pitfall Avoiding the loss-making problem described above is very simple in theory: gain more in each winning trade than you give back in each losing trade. But how might we do it concretely? When trading, always follow one simple rule: always seek a bigger reward than the loss you are risking. This is a valuable piece of advice that can be found in almost every trading book. Typically, this is called a “reward/risk ratio”. If you risk losing the same number of pips as you hope to gain, then your reward/risk ratio is 1-to-1 (also written 1:1). If you target a profit of 80 pips with a risk of 40 pips, then you have a 2:1 reward/risk ratio. If you follow this simple rule, you can be right on the direction of only half of your trades and still make money because you will earn more profits on your winning trades than losses on your losing trades. What ratio should you use? It depends on the type of trade you are making. We recommend to always use a minimum 1:1 ratio. That way, if you are right only half the time, you will at least break even. Certain strategies and trading techniques tend to produce high winning percentages as we saw with real trader data. If this is the case, it is possible to use a lower reward/risk ratio—such as between 1:1 and 2:1. For lower probability trading, a higher reward/risk ratio is recommended, such as 2:1, 3:1, or even 4:1. Remember, the higher the reward/risk ratio you choose, the less often you need to correctly predict market direction in order to make money trading. We will discuss different trading techniques in further detail in subsequent installments of this series. Stick to Your Plan: Use Stops and Limits Once you have a trading plan that uses a proper reward/risk ratio, the next challenge is to stick to the plan. Remember, it is natural for humans to want to hold on to losses and take profits early, but it makes for bad trading. We must overcome this natural tendency and remove our emotions from trading. The best way to do this is to set up your trade with Stop-Loss and Limit orders from the beginning. This will allow you to use the proper reward/risk ratio (1:1 or higher) from the outset, and to stick to it. Once you set them, don’t touch them (One exception: you can move your stop in your favor to lock in profits as the market moves in your favor). Managing your risk in this way is a part of what many traders call “money management”. Many of the most successful forex traders are right about the market’s direction less than half the time. Since they practice good money management, they cut their losses quickly and let their profits run, so they are still profitable in their overall trading. Does Using 1:1 Reward to Risk Really Work? Our data certainly suggest it does. We use our data on our top 15 currency pairs to determine which trader accounts closed their Average Gain at least as large as their Average Loss—or a minimum Reward:Risk of 1:1. Were traders ultimately profitable if they stuck to this rule? Past performance is not indicative of future results, but the results certainly support it. Our data shows that 53 percent of all accounts which operated on at least a 1:1 Reward to Risk ratio turned a net-profit in our 12-month sample period. Those under 1:1? A mere 17 percent. Traders who adhered to this rule were 3 times more likely to turn a profit over the course of these 12 months—a substantial difference. Why Do Many Forex Traders Lose Money? Here is the Number 1 Mistake David Rodriguez 11-14 minutes We look through 43 million real trades to measure trader performance Majority of trades are successful and yet traders are losing Reward to Risk ratios play a vital role in capital preservation Why do major currency moves bring increased trader losses? To find out, the DailyFX research team has looked through over 40 million real trades placed via a major FX broker's trading platforms. In this article, we look at the biggest mistake that forex traders make, and a way to trade appropriately. Why Does the Average Forex Trader Lose Money? The average forex trader loses money, which is in itself a very discouraging fact. But why? Put simply, human psychology makes trading difficult. We looked at over 43 million real trades placed on a major FX broker's trading servers from Q2, 2014 – Q1, 2015 and came to some very interesting conclusions. The first is encouraging: traders make money most of the time as over 50% of trades are closed out at a gain. Percent of All Trades Closed Out at a Gain and Loss per Currency Pair Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. The above chart shows results of over 43 million trades conducted by these traders worldwide from Q2, 2014 through Q1, 2015 across the 15 most popular currency pairs. The blue bar shows the percentage of trades that ended with a profit for the trader. Red shows the percentage of trades that ended in loss. For example, the Euro saw an impressive 61% of all trades closed out at a gain. And indeed every single one of these instruments saw the majority of traders turned a profit more than 50 percent of the time. If traders were right more than half of the time, why did most lose money? Average Profit/Loss per Winning and Losing Trades per Currency Pair Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. The above chart says it all. In blue, it shows the average number of pips traders earned on profitable trades. In red, it shows the average number of pips lost in losing trades. We can now clearly see why traders lose money despite being right more than half the time. They lose more money on their losing trades than they make on their winning trades. Let’s use EUR/USD as an example. We see that EUR/USD trades were closed out at a profit 61% of the time, but the average losing trade was worth 83 pips while the average winner was only 48 pips. Traders were correct more than half the time, but they lost over 70% more on their losing trades as they won on winning trades. The track record for the volatile GBP/USD pair was even worse. Traders captured profits on 59% of all GBP/USD trades. Yet they overall lost money as they turned an average 43 pip profit on each winner and lost 83 pips on losing trades. What gives? Identifying that there is a problem is important in itself, but we’ll need to understand the reasons behind it in order to look for a solution. Cut Losses, Let Profits Run – Why is this So Difficult to Do? In our study we saw that traders were very good at identifying profitable trading opportunities--closing trades out at a profit over 50 percent of the time. They utlimately lost, however, as the average loss far outweighed the gain. Open nearly any book on trading and the advice is the same: cut your losses early and let your profits run. When your trade goes against you, close it out. Take the small loss and then try again later, if appropriate. It is better to take a small loss early than a big loss later. If a trade is in your favor, let it run. It is often tempting to close out at a small gain in order to protect profits, but oftentimes we see that patience can result in greater gains. But if the solution is so simple, why is the issue so common? The simple answer: human nature. In fact this is not at all limited to trading. To further illustrate the point we draw on significant findings in psychology. A Simple Wager – Understanding Human Behavior Towards Winning and Losing What if I offered you a simple wager on a coin flip? You have two choices. Choice A means you have a 50% chance of winning 1000 dollars and 50% chance of winning nothing. Choice B is a flat 450 point gain. Which would you choose?         Expected Return Gains Choice A 50% chance to Win 1000 50% chance to Win 0 Expect to win $500 over time   Choice B Win 450   Win $450 Over time it makes sense to take Choice A—the expected gain of $500 is greater than the fixed $450. Yet many studies have shown that most people will consistently choose Choice B. Let’s flip the wager and run it again.         Expected Return Losses Choice A 50% chance to Lose 1000 50% chance to Lose 0 Expect to lose $500 over time   Choice B Lose 450   Lose $450 In this case we can expect to lose less money via Choice B, but in fact studies have shown that the majority of people will pick choice A every single time. Here we see the issue. Most people avoid risk when it comes to taking profits but then actively seek it if it means avoiding a loss. Why? Losses Hurt Psychologically far more than Gains Give Pleasure – Prospect Theory Nobel prize-winning clinical psychologist Daniel Kahneman based on his research on decision making. His work wasn’t on trading per se but clear implications for trade management and is quite relevant to FX trading. His study on Prospect Theory attempted to model and predict choices people would make between scenarios involving known risks and rewards. The findings showed something remarkably simple yet profound: most people took more pain from losses than pleasure from gains. It feels “good enough” to make $450 versus $500, but accepting a $500 loss hurts too much and many are willing to gamble that the trade turns around. This doesn’t make any sense from a trading perspective—500 dollars lost are equivalent to 500 dollars gained; one is not worth more than the other. Why should we then act so differently? Prospect Theory: Losses Typically Hurt Far More than Gains Give Pleasure Taking a purely rational approach to markets means treating a 50 point gain as morally equivalent to a 50 point loss. Unfortunately our data on real trader behavior suggests that the majority can’t do this. We need to think more systematically to improve our chances at success. Avoid the Common Pitfall Avoiding the loss-making problem described above is very simple in theory: gain more in each winning trade than you give back in each losing trade. But how might we do it concretely? When trading, always follow one simple rule: always seek a bigger reward than the loss you are risking. This is a valuable piece of advice that can be found in almost every trading book. Typically, this is called a “reward/risk ratio”. If you risk losing the same number of pips as you hope to gain, then your reward/risk ratio is 1-to-1 (also written 1:1). If you target a profit of 80 pips with a risk of 40 pips, then you have a 2:1 reward/risk ratio. If you follow this simple rule, you can be right on the direction of only half of your trades and still make money because you will earn more profits on your winning trades than losses on your losing trades. What ratio should you use? It depends on the type of trade you are making. We recommend to always use a minimum 1:1 ratio. That way, if you are right only half the time, you will at least break even. Certain strategies and trading techniques tend to produce high winning percentages as we saw with real trader data. If this is the case, it is possible to use a lower reward/risk ratio—such as between 1:1 and 2:1. For lower probability trading, a higher reward/risk ratio is recommended, such as 2:1, 3:1, or even 4:1. Remember, the higher the reward/risk ratio you choose, the less often you need to correctly predict market direction in order to make money trading. We will discuss different trading techniques in further detail in subsequent installments of this series. Stick to Your Plan: Use Stops and Limits Once you have a trading plan that uses a proper reward/risk ratio, the next challenge is to stick to the plan. Remember, it is natural for humans to want to hold on to losses and take profits early, but it makes for bad trading. We must overcome this natural tendency and remove our emotions from trading. The best way to do this is to set up your trade with Stop-Loss and Limit orders from the beginning. This will allow you to use the proper reward/risk ratio (1:1 or higher) from the outset, and to stick to it. Once you set them, don’t touch them (One exception: you can move your stop in your favor to lock in profits as the market moves in your favor). Managing your risk in this way is a part of what many traders call “money management”. Many of the most successful forex traders are right about the market’s direction less than half the time. Since they practice good money management, they cut their losses quickly and let their profits run, so they are still profitable in their overall trading. Does Using 1:1 Reward to Risk Really Work? Our data certainly suggest it does. We use our data on our top 15 currency pairs to determine which trader accounts closed their Average Gain at least as large as their Average Loss—or a minimum Reward:Risk of 1:1. Were traders ultimately profitable if they stuck to this rule? Past performance is not indicative of future results, but the results certainly support it. Our data shows that 53 percent of all accounts which operated on at least a 1:1 Reward to Risk ratio turned a net-profit in our 12-month sample period. Those under 1:1? A mere 17 percent. Traders who adhered to this rule were 3 times more likely to turn a profit over the course of these 12 months—a substantial difference. Why Do Many Forex Traders Lose Money? Here is the Number 1 Mistake David Rodriguez 11-14 minutes We look through 43 million real trades to measure trader performance Majority of trades are successful and yet traders are losing Reward to Risk ratios play a vital role in capital preservation Why do major currency moves bring increased trader losses? To find out, the DailyFX research team has looked through over 40 million real trades placed via a major FX broker's trading platforms. In this article, we look at the biggest mistake that forex traders make, and a way to trade appropriately. Why Does the Average Forex Trader Lose Money? The average forex trader loses money, which is in itself a very discouraging fact. But why? Put simply, human psychology makes trading difficult. We looked at over 43 million real trades placed on a major FX broker's trading servers from Q2, 2014 – Q1, 2015 and came to some very interesting conclusions. The first is encouraging: traders make money most of the time as over 50% of trades are closed out at a gain. Percent of All Trades Closed Out at a Gain and Loss per Currency Pair   Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. The above chart shows results of over 43 million trades conducted by these traders worldwide from Q2, 2014 through Q1, 2015 across the 15 most popular currency pairs. The blue bar shows the percentage of trades that ended with a profit for the trader. Red shows the percentage of trades that ended in loss. For example, the Euro saw an impressive 61% of all trades closed out at a gain. And indeed every single one of these instruments saw the majority of traders turned a profit more than 50 percent of the time. If traders were right more than half of the time, why did most lose money? Average Profit/Loss per Winning and Losing Trades per Currency Pair Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. The above chart says it all. In blue, it shows the average number of pips traders earned on profitable trades. In red, it shows the average number of pips lost in losing trades. We can now clearly see why traders lose money despite being right more than half the time. They lose more money on their losing trades than they make on their winning trades. Let’s use EUR/USD as an example. We see that EUR/USD trades were closed out at a profit 61% of the time, but the average losing trade was worth 83 pips while the average winner was only 48 pips. Traders were correct more than half the time, but they lost over 70% more on their losing trades as they won on winning trades. The track record for the volatile GBP/USD pair was even worse. Traders captured profits on 59% of all GBP/USD trades. Yet they overall lost money as they turned an average 43 pip profit on each winner and lost 83 pips on losing trades. What gives? Identifying that there is a problem is important in itself, but we’ll need to understand the reasons behind it in order to look for a solution. Cut Losses, Let Profits Run – Why is this So Difficult to Do? In our study we saw that traders were very good at identifying profitable trading opportunities--closing trades out at a profit over 50 percent of the time. They utlimately lost, however, as the average loss far outweighed the gain. Open nearly any book on trading and the advice is the same: cut your losses early and let your profits run. When your trade goes against you, close it out. Take the small loss and then try again later, if appropriate. It is better to take a small loss early than a big loss later. If a trade is in your favor, let it run. It is often tempting to close out at a small gain in order to protect profits, but oftentimes we see that patience can result in greater gains. But if the solution is so simple, why is the issue so common? The simple answer: human nature. In fact this is not at all limited to trading. To further illustrate the point we draw on significant findings in psychology. A Simple Wager – Understanding Human Behavior Towards Winning and Losing What if I offered you a simple wager on a coin flip? You have two choices. Choice A means you have a 50% chance of winning 1000 dollars and 50% chance of winning nothing. Choice B is a flat 450 point gain. Which would you choose?         Expected Return Gains Choice A 50% chance to Win 1000 50% chance to Win 0 Expect to win $500 over time   Choice B Win 450   Win $450 Over time it makes sense to take Choice A—the expected gain of $500 is greater than the fixed $450. Yet many studies have shown that most people will consistently choose Choice B. Let’s flip the wager and run it again.         Expected Return Losses Choice A 50% chance to Lose 1000 50% chance to Lose 0 Expect to lose $500 over time   Choice B Lose 450   Lose $450 In this case we can expect to lose less money via Choice B, but in fact studies have shown that the majority of people will pick choice A every single time. Here we see the issue. Most people avoid risk when it comes to taking profits but then actively seek it if it means avoiding a loss. Why? Losses Hurt Psychologically far more than Gains Give Pleasure – Prospect Theory Nobel prize-winning clinical psychologist Daniel Kahneman based on his research on decision making. His work wasn’t on trading per se but clear implications for trade management and is quite relevant to FX trading. His study on Prospect Theory attempted to model and predict choices people would make between scenarios involving known risks and rewards. The findings showed something remarkably simple yet profound: most people took more pain from losses than pleasure from gains. It feels “good enough” to make $450 versus $500, but accepting a $500 loss hurts too much and many are willing to gamble that the trade turns around. This doesn’t make any sense from a trading perspective—500 dollars lost are equivalent to 500 dollars gained; one is not worth more than the other. Why should we then act so differently? Prospect Theory: Losses Typically Hurt Far More than Gains Give Pleasure Taking a purely rational approach to markets means treating a 50 point gain as morally equivalent to a 50 point loss. Unfortunately our data on real trader behavior suggests that the majority can’t do this. We need to think more systematically to improve our chances at success. Avoid the Common Pitfall Avoiding the loss-making problem described above is very simple in theory: gain more in each winning trade than you give back in each losing trade. But how might we do it concretely? When trading, always follow one simple rule: always seek a bigger reward than the loss you are risking. This is a valuable piece of advice that can be found in almost every trading book. Typically, this is called a “reward/risk ratio”. If you risk losing the same number of pips as you hope to gain, then your reward/risk ratio is 1-to-1 (also written 1:1). If you target a profit of 80 pips with a risk of 40 pips, then you have a 2:1 reward/risk ratio. If you follow this simple rule, you can be right on the direction of only half of your trades and still make money because you will earn more profits on your winning trades than losses on your losing trades. What ratio should you use? It depends on the type of trade you are making. We recommend to always use a minimum 1:1 ratio. That way, if you are right only half the time, you will at least break even. Certain strategies and trading techniques tend to produce high winning percentages as we saw with real trader data. If this is the case, it is possible to use a lower reward/risk ratio—such as between 1:1 and 2:1. For lower probability trading, a higher reward/risk ratio is recommended, such as 2:1, 3:1, or even 4:1. Remember, the higher the reward/risk ratio you choose, the less often you need to correctly predict market direction in order to make money trading. We will discuss different trading techniques in further detail in subsequent installments of this series. Stick to Your Plan: Use Stops and Limits Once you have a trading plan that uses a proper reward/risk ratio, the next challenge is to stick to the plan. Remember, it is natural for humans to want to hold on to losses and take profits early, but it makes for bad trading. We must overcome this natural tendency and remove our emotions from trading. The best way to do this is to set up your trade with Stop-Loss and Limit orders from the beginning. This will allow you to use the proper reward/risk ratio (1:1 or higher) from the outset, and to stick to it. Once you set them, don’t touch them (One exception: you can move your stop in your favor to lock in profits as the market moves in your favor). Managing your risk in this way is a part of what many traders call “money management”. Many of the most successful forex traders are right about the market’s direction less than half the time. Since they practice good money management, they cut their losses quickly and let their profits run, so they are still profitable in their overall trading. Does Using 1:1 Reward to Risk Really Work? Our data certainly suggest it does. We use our data on our top 15 currency pairs to determine which trader accounts closed their Average Gain at least as large as their Average Loss—or a minimum Reward:Risk of 1:1. Were traders ultimately profitable if they stuck to this rule? Past performance is not indicative of future results, but the results certainly support it. Our data shows that 53 percent of all accounts which operated on at least a 1:1 Reward to Risk ratio turned a net-profit in our 12-month sample period. Those under 1:1? A mere 17 percent. Traders who adhered to this rule were 3 times more likely to turn a profit over the course of these 12 months—a substantial difference. Why Do Many Forex Traders Lose Money? Here is the Number 1 Mistake David Rodriguez 11-14 minutes We look through 43 million real trades to measure trader performance Majority of trades are successful and yet traders are losing Reward to Risk ratios play a vital role in capital preservation Why do major currency moves bring increased trader losses? To find out, the DailyFX research team has looked through over 40 million real trades placed via a major FX broker's trading platforms. In this article, we look at the biggest mistake that forex traders make, and a way to trade appropriately. Why Does the Average Forex Trader Lose Money? The average forex trader loses money, which is in itself a very discouraging fact. But why? Put simply, human psychology makes trading difficult. We looked at over 43 million real trades placed on a major FX broker's trading servers from Q2, 2014 – Q1, 2015 and came to some very interesting conclusions. The first is encouraging: traders make money most of the time as over 50% of trades are closed out at a gain. Percent of All Trades Closed Out at a Gain and Loss per Currency Pair   Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. The above chart shows results of over 43 million trades conducted by these traders worldwide from Q2, 2014 through Q1, 2015 across the 15 most popular currency pairs. The blue bar shows the percentage of trades that ended with a profit for the trader. Red shows the percentage of trades that ended in loss. For example, the Euro saw an impressive 61% of all trades closed out at a gain. And indeed every single one of these instruments saw the majority of traders turned a profit more than 50 percent of the time. If traders were right more than half of the time, why did most lose money? Average Profit/Loss per Winning and Losing Trades per Currency Pair Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. The above chart says it all. In blue, it shows the average number of pips traders earned on profitable trades. In red, it shows the average number of pips lost in losing trades. We can now clearly see why traders lose money despite being right more than half the time. They lose more money on their losing trades than they make on their winning trades. Let’s use EUR/USD as an example. We see that EUR/USD trades were closed out at a profit 61% of the time, but the average losing trade was worth 83 pips while the average winner was only 48 pips. Traders were correct more than half the time, but they lost over 70% more on their losing trades as they won on winning trades. The track record for the volatile GBP/USD pair was even worse. Traders captured profits on 59% of all GBP/USD trades. Yet they overall lost money as they turned an average 43 pip profit on each winner and lost 83 pips on losing trades. What gives? Identifying that there is a problem is important in itself, but we’ll need to understand the reasons behind it in order to look for a solution. Cut Losses, Let Profits Run – Why is this So Difficult to Do? In our study we saw that traders were very good at identifying profitable trading opportunities--closing trades out at a profit over 50 percent of the time. They utlimately lost, however, as the average loss far outweighed the gain. Open nearly any book on trading and the advice is the same: cut your losses early and let your profits run. When your trade goes against you, close it out. Take the small loss and then try again later, if appropriate. It is better to take a small loss early than a big loss later. If a trade is in your favor, let it run. It is often tempting to close out at a small gain in order to protect profits, but oftentimes we see that patience can result in greater gains. But if the solution is so simple, why is the issue so common? The simple answer: human nature. In fact this is not at all limited to trading. To further illustrate the point we draw on significant findings in psychology. A Simple Wager – Understanding Human Behavior Towards Winning and Losing What if I offered you a simple wager on a coin flip? You have two choices. Choice A means you have a 50% chance of winning 1000 dollars and 50% chance of winning nothing. Choice B is a flat 450 point gain. Which would you choose?         Expected Return Gains Choice A 50% chance to Win 1000 50% chance to Win 0 Expect to win $500 over time   Choice B Win 450   Win $450 Over time it makes sense to take Choice A—the expected gain of $500 is greater than the fixed $450. Yet many studies have shown that most people will consistently choose Choice B. Let’s flip the wager and run it again.         Expected Return Losses Choice A 50% chance to Lose 1000 50% chance to Lose 0 Expect to lose $500 over time   Choice B Lose 450   Lose $450 In this case we can expect to lose less money via Choice B, but in fact studies have shown that the majority of people will pick choice A every single time. Here we see the issue. Most people avoid risk when it comes to taking profits but then actively seek it if it means avoiding a loss. Why? Losses Hurt Psychologically far more than Gains Give Pleasure – Prospect Theory Nobel prize-winning clinical psychologist Daniel Kahneman based on his research on decision making. His work wasn’t on trading per se but clear implications for trade management and is quite relevant to FX trading. His study on Prospect Theory attempted to model and predict choices people would make between scenarios involving known risks and rewards. The findings showed something remarkably simple yet profound: most people took more pain from losses than pleasure from gains. It feels “good enough” to make $450 versus $500, but accepting a $500 loss hurts too much and many are willing to gamble that the trade turns around. This doesn’t make any sense from a trading perspective—500 dollars lost are equivalent to 500 dollars gained; one is not worth more than the other. Why should we then act so differently? Prospect Theory: Losses Typically Hurt Far More than Gains Give Pleasure Taking a purely rational approach to markets means treating a 50 point gain as morally equivalent to a 50 point loss. Unfortunately our data on real trader behavior suggests that the majority can’t do this. We need to think more systematically to improve our chances at success. Avoid the Common Pitfall Avoiding the loss-making problem described above is very simple in theory: gain more in each winning trade than you give back in each losing trade. But how might we do it concretely? When trading, always follow one simple rule: always seek a bigger reward than the loss you are risking. This is a valuable piece of advice that can be found in almost every trading book. Typically, this is called a “reward/risk ratio”. If you risk losing the same number of pips as you hope to gain, then your reward/risk ratio is 1-to-1 (also written 1:1). If you target a profit of 80 pips with a risk of 40 pips, then you have a 2:1 reward/risk ratio. If you follow this simple rule, you can be right on the direction of only half of your trades and still make money because you will earn more profits on your winning trades than losses on your losing trades. What ratio should you use? It depends on the type of trade you are making. We recommend to always use a minimum 1:1 ratio. That way, if you are right only half the time, you will at least break even. Certain strategies and trading techniques tend to produce high winning percentages as we saw with real trader data. If this is the case, it is possible to use a lower reward/risk ratio—such as between 1:1 and 2:1. For lower probability trading, a higher reward/risk ratio is recommended, such as 2:1, 3:1, or even 4:1. Remember, the higher the reward/risk ratio you choose, the less often you need to correctly predict market direction in order to make money trading. We will discuss different trading techniques in further detail in subsequent installments of this series. Stick to Your Plan: Use Stops and Limits Once you have a trading plan that uses a proper reward/risk ratio, the next challenge is to stick to the plan. Remember, it is natural for humans to want to hold on to losses and take profits early, but it makes for bad trading. We must overcome this natural tendency and remove our emotions from trading. The best way to do this is to set up your trade with Stop-Loss and Limit orders from the beginning. This will allow you to use the proper reward/risk ratio (1:1 or higher) from the outset, and to stick to it. Once you set them, don’t touch them (One exception: you can move your stop in your favor to lock in profits as the market moves in your favor). Managing your risk in this way is a part of what many traders call “money management”. Many of the most successful forex traders are right about the market’s direction less than half the time. Since they practice good money management, they cut their losses quickly and let their profits run, so they are still profitable in their overall trading. Does Using 1:1 Reward to Risk Really Work? Our data certainly suggest it does. We use our data on our top 15 currency pairs to determine which trader accounts closed their Average Gain at least as large as their Average Loss—or a minimum Reward:Risk of 1:1. Were traders ultimately profitable if they stuck to this rule? Past performance is not indicative of future results, but the results certainly support it. Our data shows that 53 percent of all accounts which operated on at least a 1:1 Reward to Risk ratio turned a net-profit in our 12-month sample period. Those under 1:1? A mere 17 percent. Traders who adhered to this rule were 3 times more likely to turn a profit over the course of these 12 months—a substantial difference. dont forget- like subscribe Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. Game Plan: What Strategy Can I Use? Trade forex with stops and limits set to a risk/reward ratio of 1:1 or higher Whenever you place a trade, make sure that you use a stop-loss order. Always make sure that your profit target is at least as far away from your entry price as your stop-loss is. You can certainly set your price target higher, and probably should aim for at least 1:1 regardless of strategy, potentially 2:1 or more in certain circumstances. Then you can choose the market direction correctly only half the time and still make money in your account. The actual distance you place your stops and limits will depend on the conditions in the market at the time, such as volatility, currency pair, and where you see support and resistance. You can apply the same reward/risk ratio to any trade. If you have a stop level 40 pips away from entry, you should have a profit target 40 pips or more away. If you have a stop level 500 pips away, your profit target should be at least 500 pips away. We will use this as a basis for further study on real trader behavior as we look to uncover the traits of successful traders. *Data is drawn from FXCM Inc. accounts excluding Eligible Contract Participants, Clearing Accounts, Hong Kong, and Japan subsidiaries from 3/1/2014 to 3/31/2015. Interested in developing your own strategy? On page 2 of our Building Confidence in Trading Guide, we help you identify your trading style and create your own trading plan. View the next articles in the Traits of Successful Series: Trading Leverage - A Real Look at How Traders May Use it Effectively Do the Hours I Trade Matter? Yes - Quite a Bit Analysis prepared and written by David Rodriguez, Quantitative Strategist for DailyFX.com Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. Game Plan: What Strategy Can I Use? Trade forex with stops and limits set to a risk/reward ratio of 1:1 or higher Whenever you place a trade, make sure that you use a stop-loss order. Always make sure that your profit target is at least as far away from your entry price as your stop-loss is. You can certainly set your price target higher, and probably should aim for at least 1:1 regardless of strategy, potentially 2:1 or more in certain circumstances. Then you can choose the market direction correctly only half the time and still make money in your account. The actual distance you place your stops and limits will depend on the conditions in the market at the time, such as volatility, currency pair, and where you see support and resistance. You can apply the same reward/risk ratio to any trade. If you have a stop level 40 pips away from entry, you should have a profit target 40 pips or more away. If you have a stop level 500 pips away, your profit target should be at least 500 pips away. We will use this as a basis for further study on real trader behavior as we look to uncover the traits of successful traders. *Data is drawn from FXCM Inc. accounts excluding Eligible Contract Participants, Clearing Accounts, Hong Kong, and Japan subsidiaries from 3/1/2014 to 3/31/2015. Interested in developing your own strategy? On page 2 of our Building Confidence in Trading Guide, we help you identify your trading style and create your own trading plan. View the next articles in the Traits of Successful Series: Trading Leverage - A Real Look at How Traders May Use it Effectively Do the Hours I Trade Matter? Yes - Quite a Bit Analysis prepared and written by David Rodriguez, Quantitative Strategist for DailyFX.com   Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. Game Plan: What Strategy Can I Use? Trade forex with stops and limits set to a risk/reward ratio of 1:1 or higher Whenever you place a trade, make sure that you use a stop-loss order. Always make sure that your profit target is at least as far away from your entry price as your stop-loss is. You can certainly set your price target higher, and probably should aim for at least 1:1 regardless of strategy, potentially 2:1 or more in certain circumstances. Then you can choose the market direction correctly only half the time and still make money in your account. The actual distance you place your stops and limits will depend on the conditions in the market at the time, such as volatility, currency pair, and where you see support and resistance. You can apply the same reward/risk ratio to any trade. If you have a stop level 40 pips away from entry, you should have a profit target 40 pips or more away. If you have a stop level 500 pips away, your profit target should be at least 500 pips away. We will use this as a basis for further study on real trader behavior as we look to uncover the traits of successful traders. *Data is drawn from FXCM Inc. accounts excluding Eligible Contract Participants, Clearing Accounts, Hong Kong, and Japan subsidiaries from 3/1/2014 to 3/31/2015. Interested in developing your own strategy? On page 2 of our Building Confidence in Trading Guide, we help you identify your trading style and create your own trading plan. View the next articles in the Traits of Successful Series: Trading Leverage - A Real Look at How Traders May Use it Effectively Do the Hours I Trade Matter? Yes - Quite a Bit Analysis prepared and written by David Rodriguez, Quantitative Strategist for DailyFX.com   Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 3/1/2014 to 3/31/2015. Game Plan: What Strategy Can I Use? Trade forex with stops and limits set to a risk/reward ratio of 1:1 or higher Whenever you place a trade, make sure that you use a stop-loss order. Always make sure that your profit target is at least as far away from your entry price as your stop-loss is. You can certainly set your price target higher, and probably should aim for at least 1:1 regardless of strategy, potentially 2:1 or more in certain circumstances. Then you can choose the market direction correctly only half the time and still make money in your account. The actual distance you place your stops and limits will depend on the conditions in the market at the time, such as volatility, currency pair, and where you see support and resistance. You can apply the same reward/risk ratio to any trade. If you have a stop level 40 pips away from entry, you should have a profit target 40 pips or more away. If you have a stop level 500 pips away, your profit target should be at least 500 pips away. We will use this as a basis for further study on real trader behavior as we look to uncover the traits of successful traders. *Data is drawn from FXCM Inc. accounts excluding Eligible Contract Participants, Clearing Accounts, Hong Kong, and Japan subsidiaries from 3/1/2014 to 3/31/2015. Interested in developing your own strategy? On page 2 of our Building Confidence in Trading Guide, we help you identify your trading style and create your own trading plan. View the next articles in the Traits of Successful Series: Trading Leverage - A Real Look at How Traders May Use it Effectively Do the Hours I Trade Matter? Yes - Quite a Bit Analysis prepared and written by David Rodriguez, Quantitative Strategist for DailyFX.com     View the next articles in the Traits of Successful Series: Trading Leverage - A Real Look at How Traders May Use it Effectively Do the Hours I Trade Matter? Yes - Quite a Bit Analysis prepared and written by David Rodriguez, Quantitative Strategist for DailyFX.com
    • Waiting for one constructive comment from you guys..anyone dont forget to like and subscribe
    • enjoy.. good profits in forex dont forget to like and subscribe          
    • try again..   1. MakingMoneyin ForexTradingTheForexmarkethasadailyvolumeofover $4trillionper day,dwarfingthevolumeof theequityandfuturesmarketscombined.Thousands ofpeople,allover theworld,are tradingForexandmakingtonsofmoney.Whynotyou?All youneedtostarttradingForexis acomputer andanInternetconnection.Youcan doitfrom thecomfortofyour home,inyour sparetimewithoutleavingyour dayjob. Andyoudon'tneedalargesum ofmoneytostart,youcantradeinitially withaminimal sum,or betteroff,youcanstartpracticingwithademoaccountwithouttheneedto depositanymoney.OnceyouconsiderstartingForextrading,oneofthefirstthings youneedtodois chooseabroker,choosingareliablebroker is thesinglemostcriticalfactor toForex success.We currently trade at eToro platform. After testing several Forex platforms we find this one to be the best. What made the difference is a unique feature that allow us to watch and copy the strategies and trades of the best performing traders on the platform. You can actually see each move the "Guru" traders make. This method works nicely for us. Since we started trading at this broker we noticed an increase of our successful trades and profits when compared to our former brokers. You may want to check them out.Please note that all trading involves risk. Only risk capital you're prepared to lose. Past performance does not guarantee future results. This post is for educational purposes and should not be considered as investment advice.NowIwouldstronglyencourageyoutogoandvisittheabovebroker's siterightnow evenifyouarenotyetdecidedwhether youwanttogointoForextrading.Why? Becauseitprovides tons offreeeducationmaterials,videosandbestofall ademo accountthatallows youtopracticeForextradingforfreewithouttheneedtodeposit anymoney.Simplygotothesite,registerforafreeaccountandstart"trading"-by actuallypracticingandexperiencingitfirsthandyou'll beabletodecidewhether Forex tradingisfor you.Inanycase,beforestartingtotradefor real,itis advisablethatyoupracticewithademo account.Onceyoubuildsomeskill andfeelmorecomfortablewiththesystemyou can starttradinggraduallyfor real money.GotoTo2.WhatisForexTradingForeignexchange,popularlyknownas 'Forex'or 'FX',is thetradeofasinglecurrency for another atadecidedtradepriceontheover-the-counter (OTC)marketplace.Forex is definitelytheworld's mosttradedmarket,havinganaverageturnover ofmorethan US$4trillioneachday.ComparethistotheNewYork Stock Exchange,thathasadailyturnover ofabout US$70billionanditisveryobvious howtheForexmarketisdefinitelythelargest financialmarketontheglobe.Inessence,Forexcurrencytradingis theactofsimultaneouslypurchasingoneforeign currencywhilstsellinganother,mainlyfor thepurposeofspeculation.Foreigncurrency values increase(appreciate) anddrop(depreciate) towards oneanother asaresultof varietyoffactors suchas economics andgeopolitics.ThenormalobjectiveofFXtraders is tomakemoneyfrom thesetypes ofchanges inthevalueofoneforeigncurrency againstanother byactivelyspeculatingonwhichwayforeignexchangerates arelikelytoturninthefuture.Incontrasttothemajorityoffinancialmarkets,theOTC (over-the-counter) currency marketsdoes nothaveanyphysical placeormainexchangeandtrades 24-hours every dayviaaworldwidesystem ofcompanies,financial institutionsandindividuals.Because ofthis,currencyratesarecontinuouslyrisingandfallinginvaluetowards oneanother, providingnumerous tradingchoices.Oneoftheimportantelements regardingForex's popularityis thefactthatcurrency tradingmarkets usuallyareavailable24-hours adayfromSundayeveningrightthrough toFridaynight.Buyingandsellingfollows theclock,beginningonMondaymorningin Wellington,NewZealand,movingontoAsiantradespearheadedfrom Tokyoand Singapore,aheadofgoingtoLondonandconcludingonFridayeveninginNewYork.Thefactthatprices areavailabletodeal 24-hours dailymakes certainthatprice gapping(whenever apriceleapsfrom onelevel toanother withnotradingbetween) is less andmakes surethattraders couldtakeapositioneachtimetheydesire, irrespectiveoftime,eventhoughinrealitythereareparticular 'lull' occasions when volumes tendtobebelowtheir dailyaveragewhichcouldwidenmarketspreads.Forexis aleveraged(or margined) item,whichmeansthatyouaresimplyrequiredto putinasmall percentageofthefull valueofyour positiontosetaforeignexchange trade.Becauseofthis,thechanceofprofit,orloss,fromyour primarymoneyoutlayis considerablygreater thaninconventional trading.Currencies aredesignatedbythreeletter symbols.Thestandardsymbolsfor someof themostcommonlytradedcurrencies are: EUR –EuUSD –UnitedStatesdollar CAD –Canadiandollar GBP–BritishpoundJPY–JapaneseYen AUD –Australiandollar CHF –Swiss francForextransactionsarequotedinpairsbecauseyouarebuyingonecurrencywhile sellinganother.Thefirstcurrencyis thebasecurrencyandthesecondcurrencyis the quotecurrency.Theprice,or rate,thatis quotedistheamountofthesecondcurrencyrequiredto purchaseoneunitofthefirstcurrency.For example,ifEUR/USD has anask priceof1.2327,youcanbuyoneEurofor 1.2327USdollars.Thereareso-calledmajors,for whicharound75%ofallmarketoperations onForexare held:theEUR/USD,GBP/USD,USD/CHF,andUSD/JPY.Aswesee,theUSdollar is representedinall currencypairs,thus,ifacurrencypair contains theUSdollar,this pair is consideredamajorcurrencypair.Pairs whichdonotincludetheUSdollar arecalled cross currencypairs,or cross rates.Thefollowingcross rates arethemostactively traded:EUR/CHF = euro-franc EUR/GBP= euro-sterling EUR/JPY= euro-Yen GBP/JPY= sterling-Yen AUD/JPY= aussie-Yen NZD/JPY= kiwi-YenTogiveyouatasteofwhatis happeningintheForexarenaherearesomehistoricalForexevents.Oneofthemostinterestingmovements intheForexmarketinvolvingtheBritishpound tookplaceintheSeptember16,1992.Thatdayis knownas BlackWednesdaywiththe BritishPoundpostingits biggestfall.Itwas mostlyseenintheGBP/DEM (BritishPound vs.theDeutschemark)andtheGBP/USD (BritishPoundvs.theUSdollar) currency pairs.ThefalloftheBritishpoundagainsttheUSdollar intheperiodfrom November toDecember 1992constituted25%(from2.01to1.51GBThegeneral reasonsfor this "sterlingcrisis"aresaidtobetheparticipationofGreat BritainintheEuropeancurrencysystemwithfixedexchangeratecorridors;recently passedparliamentaryelections;areductionintheBritishindustrialoutput;theBank of Englandeffortstoholdtheparityratefor theDeutschemark,as well as adramatic outflowofinvestors.Atthesametime,duetoaprofitabilityslant,theGermancurrency marketbecamemoreattractivethantheBritishone.All inall,thespeculators were rushingtosellpoundsfor Deutschemarks andfor USdollars.Theconsequencesofthis currencycrisiswereas follows:asharpincreaseintheBritishinterestratefrom 10%to15%,theBritishGovernmenthadtoacceptpounddevaluationandtosecedefrom the EuropeanMonetarySystem.Asaresult,thepoundreturnedtoafloatingexchange rate.Another intriguingcurrencypair is theUSdollar vs.theJapaneseYen(USD/JPY).The USdollar andJapaneseYenis thethirdonthelistofmosttradedcurrencypairs after theEUR/USDandGBP/USD.Itistradedmostactivelyduringsessions inAsia. Movementsofthis pairareusuallysmooth;theUSD/JPYpair quicklyreacts totherisk peakingoffinancialmarkets.From themid80's theYenratings startedrisingactively versus theUSDollar.Intheearly90's aprosperouseconomic developmentturnedinto astandstill inJapan,theunemploymentincreased;earnings andwages slidas well as thelivingstandardsoftheJapanesepopulation.Andfrom thebeginningoftheyear1991,this causedbankruptcies ofnumerousfinancialorganizationsinJapan.As a consequence,thequotes ontheTokyoStockExchangecollapsed,aYendevaluation tookplace,thereafter,anewwaveofbankruptcies amongmanufacturingcompanies began.In1995ahistorical lowoftheUSD/JPYpair was recordedat-79.80.TheabovestartedanAsiancrisis intheyears1997-1998thatledaYencrash.It resultedinatumbleoftheYen-USdollar pair from 115YensforoneUSdollar to150.Theglobaleconomic crisis touchedalmostall fields ofhumanactivities.Forexcurrency marketwas noexception.Though,Forexparticipants (central banks,commercialbanks, investmentbanks,brokers anddealers,pensionfunds,insurancecompaniesand transnational companies) wereinadifficultposition,theForexmarketcontinues to functionsuccessfully,itis astableandprofitableasnever before.Thefinancial crisis of2007has ledtodrasticchanges intheworld's currencies values. Duringthecrisis,theYenstrengthenedmostofall againstall other currencies.Neither theUSdollar,nor theeuro,buttheYenprovedtobethemostreliablecurrency instrumentfor traders.Oneofthereasonsforsuchstrengtheningcanbeattributedto thefactthattraders neededtofindasanctuaryamidamonetarychaos.Askand BidWhentraders wanttoplaceanorder ontheForexmarkettheyshouldbeawareofthe currencypair as well as thepriceofthispair.AForexmarketpriceofacurrencypair is denotedbytwosymbols,Ask andBid,whichhavespecific digitAsk priceis thehighestpriceinthepair’s quotationatwhichatrader buys thecurrency, standingfirstintheabbreviationofthecurrencypair.Consequently,atrader sells the currencystandingsecond.Bidpriceis thelowestpriceinthequotationofthecurrencypair,atwhichatrader sells thecurrencystandingfirstintheabbreviationofthecurrencypair.Respectively,atrader buys thecurrencystandingsecond.Seemcomplicated?here'sanexample:Let's assumethatwehavethecurrencypair ofEUR/USD withthequotationof1.3652/1.3655.Thismeansthatyoucanbuy1eurofor1.3655dollars or tosell1euro for 1.3652dollars.ThedifferencebetweentheBidpriceandtheAsk priceis called spread.Thespreadisactually thecommissionofthebroker.TheSpreadsinForextradingare actuallyverysmall comparedtocurrencyspreads atbanks.Aterm thatyou'll seealotwhiletradingForexis "pip"and"pips"-a“pip” standsfor “PercentageinPoint”.Apipis thesmallestpricemovementofatradedcurrency.Itis alsoreferredtoasa“point”.Itis veryimportantthatyouunderstandwhatapipis inthe Forextradingbecauseyouwill beusingpips incalculatingyour profits andlosses..For mostcurrenciesapipis 0.0001or 1/100ofacent.Whenacurrencymovesfromavalueof1.2911to1.2914,itmoved3pips.Whenapip has avalueof$10,youhavegained$30.Thereis anexceptionfor quotationsfor JapaneseYenagainstothercurrencies.For currencies inrelationtoJapaneseYenapipis 0.01or 1cent.Another termthatyou'll needtounderstandinrelationtoForextradingis “Lots”.Alotis theminimal tradedamountfor eachcurrencytransaction.For regular accounts onelot equals 100,000unitsofthebasecurrency.Howeveryoucanalsoopenminiandmicro accounts thatallowtradinginsmaller lots.Understanding thePip Spread -Thespreadis closelyassociatedwiththepipandhas amajor importanceforyouas atrader.Asmentionedabove,Itis thedifferencebetweenthesellingandthebuyingpriceofacurrencypair.Itis thedifferenceinthebid andask price.Theaskis thepriceatwhichyoubuyandthebidis thepriceatwhichyousell.SupposetheEUR/USDis quotedat1.4502bidand1.4505ask.Inthis casethespread is 3pips.Thepipspreadis your costofdoingbusiness here.Inthecaseaboveitmeans yousustainapaper lossequal to3pips atthemomentyouenter thetrade.Your contracthastoappreciateby3pipsbeforeyoubreakeven.Thelower thepipspreadtheeasier is itfor youtoprofit.Generallythemoreactiveandbigger themarket,thelower thepipspread.Smaller and moreexotic markets tendtohaveahigher spread.Mostbrokers willbeofferingdiffere thats better dont forget to like and subscribe  
    • or how about... 1. MakingMoneyin ForexTradingTheForexmarkethasadailyvolumeofover $4trillionper day,dwarfingthevolumeof theequityandfuturesmarketscombined.Thousands ofpeople,allover theworld,are tradingForexandmakingtonsofmoney.Whynotyou?All youneedtostarttradingForexis acomputer andanInternetconnection.Youcan doitfrom thecomfortofyour home,inyour sparetimewithoutleavingyour dayjob. Andyoudon'tneedalargesum ofmoneytostart,youcantradeinitially withaminimal sum,or betteroff,youcanstartpracticingwithademoaccountwithouttheneedto depositanymoney.OnceyouconsiderstartingForextrading,oneofthefirstthings youneedtodois chooseabroker,choosingareliablebroker is thesinglemostcriticalfactor toForex success.We currently trade at eToro platform. After testing several Forex platforms we find this one to be the best. What made the difference is a unique feature that allow us to watch and copy the strategies and trades of the best performing traders on the platform. You can actually see each move the "Guru" traders make. This method works nicely for us. Since we started trading at this broker we noticed an increase of our successful trades and profits when compared to our former brokers. You may want to check them out.Please note that all trading involves risk. Only risk capital you're prepared to lose. Past performance does not guarantee future results. This post is for educational purposes and should not be considered as investment advice.NowIwouldstronglyencourageyoutogoandvisittheabovebroker's siterightnow evenifyouarenotyetdecidedwhether youwanttogointoForextrading.Why? Becauseitprovides tons offreeeducationmaterials,videosandbestofall ademo accountthatallows youtopracticeForextradingforfreewithouttheneedtodeposit anymoney.Simplygotothesite,registerforafreeaccountandstart"trading"-by actuallypracticingandexperiencingitfirsthandyou'll beabletodecidewhether Forex tradingisfor you.Inanycase,beforestartingtotradefor real,itis advisablethatyoupracticewithademo account.Onceyoubuildsomeskill andfeelmorecomfortablewiththesystemyou can starttradinggraduallyfor real money.GotoTop           2.WhatisForexTradingForeignexchange,popularlyknownas 'Forex'or 'FX',is thetradeofasinglecurrency for another atadecidedtradepriceontheover-the-counter (OTC)marketplace.Forex is definitelytheworld's mosttradedmarket,havinganaverageturnover ofmorethan US$4trillioneachday.ComparethistotheNewYork Stock Exchange,thathasadailyturnover ofabout US$70billionanditisveryobvious howtheForexmarketisdefinitelythelargest financialmarketontheglobe.Inessence,Forexcurrencytradingis theactofsimultaneouslypurchasingoneforeign currencywhilstsellinganother,mainlyfor thepurposeofspeculation.Foreigncurrency values increase(appreciate) anddrop(depreciate) towards oneanother asaresultof varietyoffactors suchas economics andgeopolitics.ThenormalobjectiveofFXtraders is tomakemoneyfrom thesetypes ofchanges inthevalueofoneforeigncurrency againstanother byactivelyspeculatingonwhichwayforeignexchangerates arelikelytoturninthefuture.Incontrasttothemajorityoffinancialmarkets,theOTC (over-the-counter) currency marketsdoes nothaveanyphysical placeormainexchangeandtrades 24-hours every dayviaaworldwidesystem ofcompanies,financial institutionsandindividuals.Because ofthis,currencyratesarecontinuouslyrisingandfallinginvaluetowards oneanother, providingnumerous tradingchoices.Oneoftheimportantelements regardingForex's popularityis thefactthatcurrency tradingmarkets usuallyareavailable24-hours adayfromSundayeveningrightthrough toFridaynight.Buyingandsellingfollows theclock,beginningonMondaymorningin Wellington,NewZealand,movingontoAsiantradespearheadedfrom Tokyoand Singapore,aheadofgoingtoLondonandconcludingonFridayeveninginNewYork.Thefactthatprices areavailabletodeal 24-hours dailymakes certainthatprice gapping(whenever apriceleapsfrom onelevel toanother withnotradingbetween) is less andmakes surethattraders couldtakeapositioneachtimetheydesire, irrespectiveoftime,eventhoughinrealitythereareparticular 'lull' occasions when volumes tendtobebelowtheir dailyaveragewhichcouldwidenmarketspreads.Forexis aleveraged(or margined) item,whichmeansthatyouaresimplyrequiredto putinasmall percentageofthefull valueofyour positiontosetaforeignexchange trade.Becauseofthis,thechanceofprofit,orloss,fromyour primarymoneyoutlayis considerablygreater thaninconventional trading.Currencies aredesignatedbythreeletter symbols.Thestandardsymbolsfor someof themostcommonlytradedcurrencies are: EUR –Euros   USD –UnitedStatesdollar CAD –Canadiandollar GBP–BritishpoundJPY–JapaneseYen AUD –Australiandollar CHF –Swiss francForextransactionsarequotedinpairsbecauseyouarebuyingonecurrencywhile sellinganother.Thefirstcurrencyis thebasecurrencyandthesecondcurrencyis the quotecurrency.Theprice,or rate,thatis quotedistheamountofthesecondcurrencyrequiredto purchaseoneunitofthefirstcurrency.For example,ifEUR/USD has anask priceof1.2327,youcanbuyoneEurofor 1.2327USdollars.Thereareso-calledmajors,for whicharound75%ofallmarketoperations onForexare held:theEUR/USD,GBP/USD,USD/CHF,andUSD/JPY.Aswesee,theUSdollar is representedinall currencypairs,thus,ifacurrencypair contains theUSdollar,this pair is consideredamajorcurrencypair.Pairs whichdonotincludetheUSdollar arecalled cross currencypairs,or cross rates.Thefollowingcross rates arethemostactively traded:EUR/CHF = euro-franc EUR/GBP= euro-sterling EUR/JPY= euro-Yen GBP/JPY= sterling-Yen AUD/JPY= aussie-Yen NZD/JPY= kiwi-YenTogiveyouatasteofwhatis happeningintheForexarenaherearesomehistoricalForexevents.Oneofthemostinterestingmovements intheForexmarketinvolvingtheBritishpound tookplaceintheSeptember16,1992.Thatdayis knownas BlackWednesdaywiththe BritishPoundpostingits biggestfall.Itwas mostlyseenintheGBP/DEM (BritishPound vs.theDeutschemark)andtheGBP/USD (BritishPoundvs.theUSdollar) currency pairs.ThefalloftheBritishpoundagainsttheUSdollar intheperiodfrom November toDecember 1992constituted25%(from2.01to1.51GBP/USD).     Thegeneral reasonsfor this "sterlingcrisis"aresaidtobetheparticipationofGreat BritainintheEuropeancurrencysystemwithfixedexchangeratecorridors;recently passedparliamentaryelections;areductionintheBritishindustrialoutput;theBank of Englandeffortstoholdtheparityratefor theDeutschemark,as well as adramatic outflowofinvestors.Atthesametime,duetoaprofitabilityslant,theGermancurrency marketbecamemoreattractivethantheBritishone.All inall,thespeculators were rushingtosellpoundsfor Deutschemarks andfor USdollars.Theconsequencesofthis currencycrisiswereas follows:asharpincreaseintheBritishinterestratefrom 10%to15%,theBritishGovernmenthadtoacceptpounddevaluationandtosecedefrom the EuropeanMonetarySystem.Asaresult,thepoundreturnedtoafloatingexchange rate.Another intriguingcurrencypair is theUSdollar vs.theJapaneseYen(USD/JPY).The USdollar andJapaneseYenis thethirdonthelistofmosttradedcurrencypairs after theEUR/USDandGBP/USD.Itistradedmostactivelyduringsessions inAsia. Movementsofthis pairareusuallysmooth;theUSD/JPYpair quicklyreacts totherisk peakingoffinancialmarkets.From themid80's theYenratings startedrisingactively versus theUSDollar.Intheearly90's aprosperouseconomic developmentturnedinto astandstill inJapan,theunemploymentincreased;earnings andwages slidas well as thelivingstandardsoftheJapanesepopulation.Andfrom thebeginningoftheyear1991,this causedbankruptcies ofnumerousfinancialorganizationsinJapan.As a consequence,thequotes ontheTokyoStockExchangecollapsed,aYendevaluation tookplace,thereafter,anewwaveofbankruptcies amongmanufacturingcompanies began.In1995ahistorical lowoftheUSD/JPYpair was recordedat-79.80.TheabovestartedanAsiancrisis intheyears1997-1998thatledaYencrash.It resultedinatumbleoftheYen-USdollar pair from 115YensforoneUSdollar to150.Theglobaleconomic crisis touchedalmostall fields ofhumanactivities.Forexcurrency marketwas noexception.Though,Forexparticipants (central banks,commercialbanks, investmentbanks,brokers anddealers,pensionfunds,insurancecompaniesand transnational companies) wereinadifficultposition,theForexmarketcontinues to functionsuccessfully,itis astableandprofitableasnever before.Thefinancial crisis of2007has ledtodrasticchanges intheworld's currencies values. Duringthecrisis,theYenstrengthenedmostofall againstall other currencies.Neither theUSdollar,nor theeuro,buttheYenprovedtobethemostreliablecurrency instrumentfor traders.Oneofthereasonsforsuchstrengtheningcanbeattributedto thefactthattraders neededtofindasanctuaryamidamonetarychaos.Askand BidWhentraders wanttoplaceanorder ontheForexmarkettheyshouldbeawareofthe currencypair as well as thepriceofthispair.AForexmarketpriceofacurrencypair is denotedbytwosymbols,Ask andBid,whichhavespecific digital notations.     Ask priceis thehighestpriceinthepair’s quotationatwhichatrader buys thecurrency, standingfirstintheabbreviationofthecurrencypair.Consequently,atrader sells the currencystandingsecond.Bidpriceis thelowestpriceinthequotationofthecurrencypair,atwhichatrader sells thecurrencystandingfirstintheabbreviationofthecurrencypair.Respectively,atrader buys thecurrencystandingsecond.Seemcomplicated?here'sanexample:Let's assumethatwehavethecurrencypair ofEUR/USD withthequotationof1.3652/1.3655.Thismeansthatyoucanbuy1eurofor1.3655dollars or tosell1euro for 1.3652dollars.ThedifferencebetweentheBidpriceandtheAsk priceis called spread.Thespreadisactually thecommissionofthebroker.TheSpreadsinForextradingare actuallyverysmall comparedtocurrencyspreads atbanks.Aterm thatyou'll seealotwhiletradingForexis "pip"and"pips"-a“pip” standsfor “PercentageinPoint”.Apipis thesmallestpricemovementofatradedcurrency.Itis alsoreferredtoasa“point”.Itis veryimportantthatyouunderstandwhatapipis inthe Forextradingbecauseyouwill beusingpips incalculatingyour profits andlosses..For mostcurrenciesapipis 0.0001or 1/100ofacent.Whenacurrencymovesfromavalueof1.2911to1.2914,itmoved3pips.Whenapip has avalueof$10,youhavegained$30.Thereis anexceptionfor quotationsfor JapaneseYenagainstothercurrencies.For currencies inrelationtoJapaneseYenapipis 0.01or 1cent.Another termthatyou'll needtounderstandinrelationtoForextradingis “Lots”.Alotis theminimal tradedamountfor eachcurrencytransaction.For regular accounts onelot equals 100,000unitsofthebasecurrency.Howeveryoucanalsoopenminiandmicro accounts thatallowtradinginsmaller lots.Understanding thePip Spread -Thespreadis closelyassociatedwiththepipandhas amajor importanceforyouas atrader.Asmentionedabove,Itis thedifferencebetweenthesellingandthebuyingpriceofacurrencypair.Itis thedifferenceinthebid andask price.Theaskis thepriceatwhichyoubuyandthebidis thepriceatwhichyousell.SupposetheEUR/USDis quotedat1.4502bidand1.4505ask.Inthis casethespread is 3pips.Thepipspreadis your costofdoingbusiness here.Inthecaseaboveitmeans yousustainapaper lossequal to3pips atthemomentyouenter thetrade.Your contracthastoappreciateby3pipsbeforeyoubreakeven.Thelower thepipspreadtheeasier is itfor youtoprofit.Generallythemoreactiveandbigger themarket,thelower thepipspread.Smaller and moreexotic markets tendtohaveahigher spread.Mostbrokers willbeofferingdifferent  
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