Some investors love the stock market. They live and breathe equities: the excitement, the passion, the devastation of loss, the victory. Some like the options and futures markets, feeling it takes more skill than equities. And, there are some that prefer the global aspects of the FOREX.

But no matter what you prefer, you come across again and again the problem of whether you should trade with the trend, or trade for range. The impact of which method is chosen affects your chance of success, and, the reason we’re all here, your wallet (or purse as the case may be).

But those dealing in the FOREX have a unique advantage in that the market responds well to both styles of trading. So, what exactly is trading trend and range? Let’s take a look.

Following the crowd

Put simply, a trend is the direction a market, or the price of a single asset, takes. Trends vary from short, to long, to longer and to even longer or shorter.

There are trend identifiers that can tell you which way the wind is blowing. The simplest, and probably the best, method is to look at the higher lows in an uptrend and the lower highs when the market or asset is in a downtrend. There are other methods of course. For example, some investors like to define a trend as “a deviation from a range as indicated by the Bollinger Band.” What’s a Bollinger Band, you ask? It’s a band plotted two standard deviations away from a simple moving average.

But in the end, it doesn’t matter how you define it or look at it because the goal is the same: to make money by buying in on a trend early and holding on until the trend gives out and starts slowing. Most traders use tight stop trade orders (an order to buy or sell a security when its price surpasses a certain point), to limit their risk.

This method of trend trading can have huge payoffs. Leverage in the FOREX, because of its size and 24 hour trading, is typically 100:1, meaning that you only need to put down $1 of margin to get $100 worth of currency control. Given that the stock market is 2:1 and the futures market which is usually 25:1, you can see why you can make a huge amount of money with trend trading in the FOREX.

The Long Term

But trend trading isn’t for everybody. It takes discipline, with many traders meeting 20 or even 30 stop calls before they can catch a trend. If you get emotional about it and try to fight the market, you could lose your shirt.

That’s where range trading comes in. The range trader doesn’t care about direction. He trades knowing that no matter where the currency goes, it will come back to where it started. Range trading is based on the theory that prices will trade at the same levels many times, and the range trader will be there to gather up those profits from the oscillations in price.

But range trading isn’t free and clear either. A range trader will have to have a lot of money they are willing to risk to put the practice into play successfully. But, with more money (in the case of the FOREX, more leverage), there’s more chance of the trader’s enemy (i.e. emotion) coming into play. Positions can go against you many times in a row before you get a profit, and many traders just don’t have the stomach to watch their hard earned cash dwindling while they hang on to the idea of profits in the future. Also, if you’re not careful, with more than a few losses in a row you could trigger a margin call before you’ve had a chance for the currency to produce profits for you.

But, don’t despair. Many FOREX dealers have come up with a solution: they allow you to trade in mini-lots. By trading in mini-lots you can withstand many more drawdowns before triggering a stop order. This allows you to withstand more losses in a row before a margin call is issued.

One or the Other

Regardless of which method the trader chooses, the FOREX market is ready and able for both. As long as the trader remains disciplined and realizes that there will be some losses no matter what they do, they will improve their chances of fattening their bank accounts.

Kevin Davis has been investing online for 10 years and just recently started looking into expanding his investments into the FOREX market. To learn more about Kevin, visit his blog at http://www.KevinHDavis.com

Commercial mortgage brokers are constantly asking themselves if they should ask their clients for an exclusive relationship or go the “easier route” and secure a non exclusive fee agreement. What’s the difference? What’s the pros and con’s of both? That’s the point of this brief article.

An exclusive relationship within the commercial mortgage field can be thought of as a listing agreement within the real estate brokerage side of the business. Or more specifically the exclusive agreement should be thought of as a tenant representation agreement for those that are familiar with that agreement.

Essentially the exclusive agreement states that the borrower agrees to work with the mortgage broker on an exclusive basis with shopping for lenders, negotiating term sheets and coordinating the processing and closing of the loan (among other legal issues I’m not qualified to discuss). The commercial mortgage broker is handling the whole transaction on behalf of the borrower and typically is looking out for the borrower interests. A non exclusive agreement still covers a lot of the same issues but gives the borrower the right to work with other lenders/ brokers. So there’s no guarantee that you’ll win the deal and or get paid.

The main advantage for the commercial mortgage broker to get an exclusive is that the borrower has committed to working with the broker, and at the end of the deal the broker will get paid. For those reading this article that have worked on deals for months with borrowers and to find out they lost it because of 10 basis points or slightly lower fees know how bad this can sting.

Most exclusive fee agreements cover a lot more than the exclusivity issue; retainers, expenses covered, minimum fees are some of the more important issues. For example having a borrower send you a thousand dollar retainer and a signed exclusive agreement says a lot; that he’s on board and going to work with you.

There are disadvantages though of going for an exclusive agreement. The obvious is that many borrowers simply will not want to sign off on this. It can be a hard sell. They’ll want you to “get them quotes” or “see what you can offer” first. Basically the borrower will want to keep total control and will only want to work with you if you can produce the best deal. So you stand to lose working on the deal if they don’t agree. You may know that perfect bank for the deal and or just want to work on it with the hopes of building a solid relationship along the way.

Also, YOU may not want to work on the deal on an exclusive basis. Believe me when I tell you that if your borrower agrees to a 5 page agreement and sends you a $1000 retainer, that they will want to get their money’s worth and are not going away. If they deal is weak and you find you can’t get it done, you’ll have to invest a lot more time into the deal than wanted and or break off the relationship and risk tarnishing your reputation.

So, unfortunately there’s no simple answer if you should go for an exclusive commercial mortgage broker fee agreement or not. But you should get you borrower to sign something that says you’re working with him and that you’ll get paid at close.

Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan. He has a STORE for commercial loan brokers. Contracts, spreadsheets, books, etc. Products starting at $4.95! Check it out commercial mortgage loans or commercial mortgage training

I’m going to help you make money currency trading with my most profitable advice I try to apply on a daily basis. This is a perfect opportunity for all those people out there looking to develop a second income from the comfort of their own home.

My first piece of advice is to watch the news. The most important news to watch would be the morning news because all the important economic news comes out at scheduled times in the morning. This news is very important because economic stability of a country determines the quality of the price of currency. If the quality of the economy goes down, the price of the currency will go down internationally. This is just the way it goes. The last thing you want to do is make a trade and in the middle of it, the Federal Reserve releases some information and your “good trade” turns into a big loss because you missed the news. You want to pay attention to any news relating to the economy and how well it is doing. This includes GDP, unemployment rates, central bank interest rates, consumer spending, etc. Typically if these numbers are good, than it is good for the currency. If they’re bad, they’re bad for the currency.

The next thing I want to discuss is not what you trade, but when you trade. There are basically two different times you can trade, high volume and low volume. I recommend starting in the high volume time because this is when everyone else is trading. This leads to a more predictable outcome since you can be sure market forces are in control. If you look at low volume times, a large bank could make a big trade which could drastically change the direction of a currency. At this time you would be at the mercy of a bank.

Lastly, you’ll want to get Forex Killer for your computer, so you can better handle trades and become more profitable. This software will seek out and find the most profitable trends out there, so you can profit from them.

The automated software of Forex Killer will give you an immediate edge in the market. Make trades that work for your profit line. For more information on the Forex Killer software, check out Forex Charting Software.

You be amazed how foreign exchange market has grown so much in last 8 years and has grown into a big business; that a new currency trader has the potential to make a profit, in a short amount of time. You see that new traders don’t know that ninety percent of traders lose money. Only ten percent succeed and make it, so follow these steps to become a pro in forex.

1. The area you should look into is finding the right broker that has a good trading platform with a demo account when you could practice and get better with your trades.

2. You must have a strategy and stop guessing what’s going to happen in the market, to succeed in forex you need a plan. The successful forex traders are the ones that have a plan every day and they succeed.

3. Also study news events a change in any news announcement could affect that particularly currency. Just make should you don’t make any silly decisions that you might regret in the long run, remember your trading plan follow it.

4. Another tip that I can give you is to get a software program in order to learn how to analyze the forex market. There is a lot of software that is available out there to help you do this, learning this could be a great experience. Just make sure you choose one that is legitimate and doesn’t make crazy testimonial.

There is one more area I like to discuss controlling your emotion with this market is very important and you need to analyze that with every trade that you make, their will times that your mind won’t let trade in the market so my advice is to take a break. There are many trades ahead you, and you will win when you have your mind in right time.

Anyone can learn to trade currencies most fail in the beginning you need to learn from your failures because with the right education you will succeed with forex.

These are some tips to help you learn how to trade forex.

You can find more information and tips on Forex at http://www.squidoo.com/successfulwithforextrading

The Plain Facts About Stock Trading

Want to hear a scary statistic? Well, here it is – whether you want to hear or not: “At least 70% of traders lose money” in the stock market. This is according to a report from the North American Securities Administrators Association (NASAA). The report goes on to add that “70% of public traders will not only lose, but will almost certainly lose everything they invest.”

Yikes! Everything? How can that be? Especially with all the charting tools, the stock trading simulators, the books, courses, coaching, and seminars from stock-trading gurus that are available today.

One more little statistic from that report: In all, only “11.5% [of traders] might profitably trade” the markets.

And yet you constantly read about people raking in bushels of cash by day trading – most especially penny stocks. It doesn’t seem to add up.

The Difference Between Winners and Losers?

The difference between the 70% of losers and the 11.5% of winners is – what do you think? The best strategies? Guess again. It is, hands down, a good foundational education about trading and about the markets.

Case in point. A number of years ago a man named Ralph Vince (an expert on the mathematics of trading) conducted an experiment. He chose forty highly educated people – all with doctorate degrees — and gave each of them $1,000 in play money. He then invited them to participate in 100 rounds of a computerized stock trading game. They were even supplied with 100 trades that had a 60% winning percentage.

At the end of the experiment only two of these highly educated individuals – armed with winning strategies – made a profit. Thirty-eight failed! Why?

Specifically because winning strategies do not a trader make!

The criteria that will turn you into a successful trader is time, knowledge, experience and proper guidance. In a word, find some good day trading courses and see which one fits your needs.

Two Ways to Learn

As with most any endeavor there are basically two ways to learn. The first is, obviously, through reading and studying (seminars, online courses, books, videos, etc.). We might call this the formal training.

The second is by experience. The hands-on sensation of the actual day-by-day buying and selling which trigger your roller coaster highs and lows of wildly gyrating emotions. Most day-trading courses included both.

The formal training allows you to learn from the mistakes of others. From their teaching you can learn to avoid the worst of the pitfalls involved in day trading.

Hands-on training helps you get the feel of entering and exiting a trade. The feel of watching that chart move once you’ve pulled the trigger on a trade. The act of exiting at just the right moment to make the profit!

Can you imagine learning to drive a car from reading a book? Or learning to swim from reading a book? So much of it has to do with getting the “feel” of what you’re doing. Trading penny stocks is the same way.

Hands-on training will also help you to know yourself. (It is highly recommended that you begin by paper trading or other means of simulated trading.) What are your basic emotions with regard to money? To investing? To winning? To losing? You had better know ahead of time. Believe it or not, your own basic emotions will play a big part in your success or subsequent failure in day trading penny stocks.

Watch Those Emotions!

Fear is that emotional state of anxiety due to a real or an imagined presence of danger. Fear can impair judgment and cause a trader to recoil from making a trading decision, or to delay a trading decision response.

On the other hand, a self confident person, one with a positive attitude, has a more positive expectation. That person is more likely to take action in spite of a sense of fear. Consider this: winners manage their fear; losers are controlled by their fear.

However, even the most fearful person can overcome that fear with the proper education and training. Using day-trading courses can help to develop self discipline. Self discipline will evolve into self confidence. Once you fully believe in your own abilities (to successfully trade and profit from penny stocks), you will be able to assess and accept risk, and then take decisive action.

If the fear seems overpowering, it is vital that that fear be analyzed. Where does it stem from? From childhood? How can it be faced and worked through? The answer most usually comes through more and more education – both formal and hands-on.

Day Trader’s Traits

Successful day traders must think outside the box. They have to think quickly and wisely. When stocks are fluxuating at split second intervals, making a wrong decision, or ignoring a trade could result in the lost of a great deal of money. Does that describe you?

From the outside looking in, it may appear that day trading penny stocks is akin to gambling. And of course, some traders would prove that assumption to be correct. But they are not the ones who are consistently in the profits.

Day Trading as a Business

Rather than gambling, day trading penny stocks should be thought of as a business. You are both the employee and the boss in this business. You will need another employee – your broker. There will be competitors – the other traders out there, and of course the stock market itself. Just as with any business, there is buying and selling going on. The difference with day trading penny stocks is that this business is extremely fast-paced. (Roller coaster, remember?)

Another part of your day-trading training is to take a realistic look at your day trading business and make plans that will carry you through the long haul. What are your goals and aspirations? The first of course is to make money. But, just as important, is to make money consistently. How is that going to happen?

Working Capital

Understand that your working capital is vital for your business’s survival. Capital preservation is more important than capital growth. Reinvesting profits back into your business should be high on your priority list. What percentage of your total portfolio will be given over to penny stock day trading? Part of it? Half of it? All of it? Make that decision before you plunk down your hard-earned cash.

Can YOU Profit With Penny Stocks?

So can you profit with penny stocks? Absolutely, you can. I encourage you to learn all you can about day trading. Look for good day-trading training courses. Day trading penny stocks can be exciting and rewarding. And with regard to those statistics cited in our intro – they’re really not that scary – as long as you are in that 11.5%. And you can be. Keep your feet firmly planted in good basic foundation of education, and don’t allow yourself to be swept along by hype and high-pressure come-on’s.

Do that and you too can enjoy the cash rewards from successfully day trading penny stocks.

Three of the better day-trading training programs out there are outlined here.

http://www.squidoo.com/daytradingcourses

There are plenty of freebies offered to get you started. There are simulators, coaching programs, webinars, mentoring. You name it, it’s included! And you’ll see there is something here that fits your wallet precisely. If you think education is expensive – try ignorance!! http://www.squidoo.com/daytradingcourses

So, while these steps are applicable to online training for foreign currency trading in the forex market in my case, if you think about it while you read this, it could easily be the same principles that you need to apply to become a professional currency trader in the trading futures markets, or trading options market.

Lets not waste time here is step: 1) Start trying to save your money today not tomorrow or next month.

To trade in the big league or you need a bankroll to play with, and one that is capable to withstand the ups and downs that are a natural part in the trading currency markets. For me, I know this is a problem for most people, but you need to just get an organized budget together. Then stick to it, and if you want it bad enough then it will start to add up to where you need to be in the online currency trading.

So you say “How much money will you need?” Unfortunately I can not be the one to answer that because it will depend on the trading strategy that you chose to implicate, and the amount of leverage that you need to plan on trading with in the course of a day. Also the amount of money that you can take out in profits, is just simply what is extra from what you need in the course of day trading. Though you should not count on having a bare minimum for you currency exchange balance, it you leave a little more in each day then you may be able to start to take more risk. And if you understand that risk means that you have a chance to make a lot of more money, then your on the right track. But I can say, that I see plans from $1000 to a years salary.

The Next Step: 2) Get online training for foreign currency trading.

Common sense will tell you that you need to get training in you subject before you go about risking you money. So with that said, there is plenty of free information to get your self started. With the free information you can get yourself familiar with the terms that they use in the currency trading market, with terms like “fx” meaning forex, or “cdf” meaning, channel definition format. If you just learned something with the last sentence then you know what I mean, because this is also free information that you are reading.

But when that is not enough there is many programs out today, mostly when you register for a trading platform then they will provide you with what you need to get informed in you field of currency trading. The part of the education process that I really am talking about here is necessary, and that is coming up with a good trading strategy that you are personally comfortable with currency exchange rates and among other things, as well as being financially sound with the money management strategy to ensure the long-term viability of your trading strategy plan.

Then the next step:

3) Which can also be simultaneously done with the last step. This is to sign up with demo trading account from a larger online trading broker. Then you can start practicing with your new found trading strategy, while not losing all you money to start, because the demo account uses play money and not real money. At your regular job or, if you have some free time and internet access at your work place, then maybe you can start to get a feel for how a normal day is while practicing trading.

So on to step 4: If you are then already making money trading on “paper,” so to say, and are comfortable with your trading strategy plan, then you need to go ahead and get started having fun with fx trading for real only on a part-time basis. Don’t include all apples in one basket just yet. You need to start out slowly and gain a decent comfort level. Then as your confidence builds up and you have learn from a couple mistakes, then you can start to move money from your savings to increase your bankroll.

Lastly step 5: When you can estimate that your average gains/loses from real trading, from following step 4, are at a level where and when you are comfortable, to say if you were to trade full-time using your present bankroll, you would be making enough profits that slightly go over and exceed your current employment salary, then and only then you are ready to quit your job for once and all, and trade full-time.

Remember, you want your currency trading profits to go over and exceed your present job salary. This will give you the opportunity to maintain a decent current financial level. Also at the same time you can then live with minimal stress in you life and continue to increase your trading bankroll, which will enable you to make more money as the size of your available funds grows sizable larger.

Lastly it is important to have patience with yourself and your online training for foreign currency trading, at each of the steps mentioned above. Mostly the seasoned traders will tell you to maintain emotional equanimity and understand that fear and greed are a traders weakness. If you can keep these strong emotions under control and keep you head straight, the discipline in establishing the while following steps, then you can look forward to making it as a everyday professional trader.

If you liked that and you want to get an even better grasp on Forex go to Prolificinfotoday.com and find more useful free currency trading information

For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970′s, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.

FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.

Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.

How FOREX Works

Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.

Marginal Trading

Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term “lot” refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.

EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)

When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.

Investment Strategies: Technical Analysis and Fundamental Analysis

The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency’s future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.

A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country’s economy depends on a number of quantifiable measurements such as its Central Bank’s interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.

Make Money with Currency Trading on FOREX

FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.

Rich McIver is a contributing writer for The Forex Blog: Currency Trading News ( http://www.forexblog.org ).

Many new traders think that profiting from the Forex involves finding a ‘secret formula’ or trading strategy. So they embark on an exhaustive search for what amounts to the ‘holy grail’ only to find themselves still searching 2 or 3 years later still waiting for consistent profits.

If that is the case, it is unlikely to be the strategy that’s the problem. Profiting from Forex can be done through any number of tried and test strategies. Just purchase a training package from many of the reputable online traders or brokers and you will find them.

The main problem that stops traders from profiting from Forex is in the mind! Successful Forex trading involves a whole range of mind control skills and mental disciplines that take some time to develop.

So if you are still struggling after one or two years of trading the Forex, start to focus your time and energies not so much on searching for a new strategy or trading methodology, but rather on yourself and how you approach and manage trades.

Monitoring Emotional State

How can this be done?

By monitoring our personal responses and emotional state during the course of a trading day.

Once we have a strategy we have confidence in, it is merely a case of waiting until the setup appears where we can employ that strategy.

Here is the problem. The Forex market goes through long periods of consolidation and low liquidity. The anxious trader will desperately look for trading opportunities and deviate from the strategy they have selected.

So things may not be quite right, but it looks reasonably favorable so in they go only to be dismayed when the trade turns against them.

It takes much mental discipline to restrain oneself from going into trades that do not match the criteria the strategy demands.

Once in the trade, mental discipline is again required so the trade is managed properly.

Have you ever found yourself doing this?

You enter the trade after examining risk and profit potential. Your stop is strategically placed 25 pips from your entry point. Price starts to go against you. It gets dangerously close to your stop and you think to yourself, “the trade needs a little more room for maneuver so I’ll push back the stop by another 5 pips.” Price continues to pull back getting close to your new stop.

The novice trader now thinks, “Just another 5 pips to make sure I’m not needlessly going to get stopped out of this trade” and moves the stop back to 35 pips.

Almost predictably in this scenario, price continues stopping out the trade at 35 pips. The trader has now suffered a loss of 35 pips instead of 25 pips which was originally factored in.

Continuing to trade in this manner makes profiting from Forex pretty remote! It takes mental discipline to stick to the plan!

Winning And Losing Responses

Then come the emotions associated with winning or losing.

The newer Forex trader will feel emotions of elation on getting a winning trade. In fact, the whole day can appear bright and cheerful with just one winning trade.

On the other hand, a losing trade can put the same trader into the depths of depression or despair. The day seems grim and hopeless leading to flawed judgment on the next trade which also goes wrong and compounds the attack on the trader’s level of confidence.

It takes mental discipline to keep the emotions in check trying to avoid feeling either elation or despair on the basis of a winning or losing trade.

The disciplined trader approaches order entry almost mechanically realizing there will be winners and losers and that the strategy, if adhered to, will in the end win out!

So how can we develop this tough mental condition and strong mindset if ever we are to see the day when we are actually profiting from Forex?

Just as the trader will keep monitoring the charts, watching price action and candle formations during the course of a trading session, the same monitoring activity needs to be applied to the mental and emotional condition.

Self-Monitoring Sessions

This can be achieved by constantly asking questions of oneself. For example:

• What am I feeling right now?
• Am I in a relaxed state or am I anxious, agitated, or frustrated?
• Am I desperately looking for trading opportunities when no high probability trades are setting up right now?
• How did I react after my last trade whether it was successful or not?
• What can I learn from that and how can I better handle my emotions next time?
• Am I enjoying the experience or am I nervous of the markets?

Many sports participants and Olympic medalists spend huge amounts of time and resources on getting the right mindset. Coaches work with them to develop mental discipline and mind conditioning so they perform well under pressure and become aware of their own emotional state and feelings.

Often, it is not so much the level of skill or physical strength that makes the difference between the winner and the rest, it is competitor who has mental toughness who has the edge!

Focus On Mindset

So if you have been trading the Forex for one or two years already with mixed results, why not focus on your mindset.

Select a strategy that has a tried and tested track record by other traders and professionals who are already profiting from Forex, and then spend most of your time and energy developing the mind skills necessary to get into the small percentage of traders who actually make money on the Forex!

To learn how to preserve your mental and emotional resources in addition to your account equity click here:

http://www.vitalstop.com/Forex/Advisor/forex-day-trading-mental-equity.htm

Do you know the important lesson Mohammed Ali teaches us about Forex trading? Read it here:

http://www.vitalstop.com/Forex/Advisor/forex-online-trading-mohammed-ali.htm

For a free pivot point calculator, Fibonacci calculator and the best free economic calendars click here:

http://www.vitalstop.com/Forex/tools.html

In a previous article I mentioned that my analysis involves monitoring price action, in order to gain an insight into the short term sentiment of the market. Determining who is in control at that time – the bulls or the bears. And assessing how they’re likely to respond to changes in the market.

I thought today I’d prepare a quick article to give an overview of how I analyze price. Those of you who know me know that I’m a great fan of candlestick charting. However, price analysis is much more than just watching for your favorite candlestick patterns. Too many people just teach the candlestick patterns, which are fine, but in my opinion there’s some essential analysis missing that an astute trade needs to consider BEFORE they look at price action and respond to every candlestick or bar chart pattern.

Let’s have a look at what I mean.

Price analysis for me is essentially a top down approach, working from the macro level of Market Structure (so we analyze the big picture first), then down to the current Trend within that structure, and only then do we look at the current price pattern, whether through candlestick analysis or whatever other method works for you.

So I basically start off with a wide view of the market, and drill down to the detail in the current price bar or pattern.

I prefer to do this over two timeframes.

The market structure is defined primarily on a higher timeframe. For me, as a daytrader, that’s the one hour charts. Of course, if you trade differently to me then that can be any other time period you wish. Just make it higher than the timeframe you trade on – I recommend by at least a factor of four.

Then on the shorter timeframe (what I call the trading timeframe) I refine the market structure a little further, analyze the movement and strength of the trend, and then assess the bullish or bearish sentiment based on the current price patterns.

For me, the trading timeframe’s anywhere from 1 minute to 5 minute charts, depending on the market and its volatility, and how well the price is flowing.

So, what do I mean by market structure, trend analysis and price analysis?

Firstly Market Structure:

* The higher timeframe chart is opened and any areas of major support or resistance are identified and clearly marked on the chart.

* Support & Resistance for me are areas of past price congestion, swing highs or lows, or gaps. That doesn’t include any ‘guessing’ at future support or resistance, via the use of pivots points or Fibonacci levels. I’m not a fan of these analysis techniques. Of course, if they work for you, good on you, keep using them.

* My expectation when I trade is that there is a higher probability of price stalling or reversing at these areas of major support or resistance.

* I then narrow my focus to the shorter trading timeframe and add to the market structure framework, by identifying areas of minor support or resistance. (Typically we look on the current trend first, but you may at times need to look back beyond the current trend, to previous market action, to find applicable areas of minor support or resistance)

* Once again, these come from areas of congestion, swing highs or lows, or gaps. That is, areas which are proven to stall price movement or reverse price direction. My expectation with minor support or resistance is for a higher probability of minor support holding in an uptrend, and minor resistance holding in a downtrend.

* That’s it for Market Structure – simply identifying a support and resistance framework within which price moves. Simple!

Having defined our market structure, or a framework within which price will move, we now focus our attention on the current trend. This occurs, as does all further analysis, on the trading timeframe.

* I conduct analysis on the trend to identify its strength. Is the trend moving strongly, in which case we can anticipate it being more likely to break through the next support or resistance levels, or is it weakening, in which case we have a greater probability of the support or resistance levels forming a barrier to further price movement?

* We determine the strength of the trend by looking at its proximity to the support and resistance barriers within the framework, and also gain clues from changes in momentum or volatility.

* Is the current price swing, faster or slower than preceding swings within that trend? Is the current price swing speeding up, or slowing down?

* Is the volatility changing? Is the average range of the price bars increasing or decreasing?

* These sorts of questions regarding changes of volatility and momentum can give you clues into the changing strength of the trend, and the likelihood of a reversal at, or continuation through, an area of support or resistance.

* If you want to get experienced at this, it takes time. Review price charts over and over, identifying how changes of momentum and volatility precede either a continuation or reversal of that trend.

Having gained an appreciation of the strength of the trend, and its location within the support and resistance framework, ONLY THEN, finally, do I concern myself with the current price action to determine the bullish or bearish sentiment (or more particularly a potential change of sentiment) through candlestick analysis.

What does this little bit of extra work give me?

Here’s an example:

Instead of entering short on a shooting star reversal pattern, just because it matches the shooting star diagram in my book on candlestick patterns, I will first conduct further price analysis regarding the trend and how it moves within the support and resistance framework. For example, the price may have just meandered slowly up to a major resistance level. The current price swing may clearly show less momentum than both the previous upswing and downswing. And the price bar range may be narrowing. This gives a reduced likelihood of the commitment required from the bulls to break through the area of increased supply. The shooting star pattern provides evidence of a clear rejection of prices at that resistance level. This provides me with a lower risk or higher probability trade in the short direction.

Another example:

Instead of entering long on a harami cross reversal pattern, just because it matches the harami cross in my book on candlestick patterns, I’ll conduct further analysis to see where this pattern occurs within the bigger picture of market structure. For example, the trend may show a strong and accelerating move downward, on greatly increased volume, extending price rapidly to great distances below its average, right into an area of major support. This is an area where I expect increased demand is likely to be sufficient to absorb and overcome the force of the bears who have spent all their energy on the climactic move downwards. This is an area where I expect price to find support. The harami cross shows a clear halting of the rapid move down, and allows me an opportunity to enter a low risk trade close to an area of major price support.

Seriously, the end result might be the same, but at least I’ve entered based on a reasonable assessment of the price action in order to maximize the potential for a lower risk or higher probability trade. Over a lifetime of trading I expect this approach will produce more favorable results than just entering because the pattern matched one I’d memorized from a book.

Ok, a bit of a summary, and I know this is a bit of repetition for those familiar with my work, but don’t just blindly take your entry triggers. Think about where they occur within the bigger picture structure of the market.

The market structure defines where you trade. The trigger, whether a candlestick pattern or some other form of entry trigger, tells you when to get in, ONLY when you’ve first met the requirements of the market structure rule.

Think about where the current price movement is within a framework of support and resistance. Think about the changing strength of the current trend, or price swing, as it approaches this area of support or resistance. Watch for signs of strength or weakness in the trend, through the clues evident in changes of momentum and volatility.

And don’t forget – ALWAYS USE STOPS, because there are no guarantees. This is a game of probabilities.

Happy trading

Lance Beggs

(c) Copyright Lance Beggs

http://www.YourTradingCoach.com All Rights Reserved Would you like to learn more about how I trade the forex and equity index markets? Check out the articles, videos and trading resources on my website right now at http://www.YourTradingCoach.com

When governmental agencies examine why the vast majority of new traders to the Foreign Exchange Markets (Forex or FX) failed, (95%) statistics have shown the vast majority of collapses are directly related to the margins offered by the various Forex brokerage firms. A currency can only go in one of two directions, which are it can increase in value or decrease in value. There fore the chances of correctly selecting the path a currency in moving is 50%. But, 95% of new traders to the market fail to make money and drop out. Simply put, these statistics don’t match; they do not correspond to what should be expected. So there must be another factor causing so many breakdowns when entering the FX markets.

Governmental researchers then dived deeper into the numbers and determined that some Forex brokerage firms where offering margins of as much as 200 times more than the original investment. Which means a person investing $100 could control as much as $20,000 worth of currency. When compared to the regulated stock markets, which can only offer a one to one margin, in other words for every $1 invested the trader was allowed to borrow an additional $1 to invest with, they found the Forex brokerage firms allowable margins completely out of control.

To the novice investor the idea of controlling $20,000 worth of currency with a $100 investment seems like the greatest thing they have ever seen, which is simply not the case. In order to be profitable with this approach one would need to make winning trades 100% of the time in order to not be wiped out. Another factor most new investors in the FX markets are not aware of is that they are being charged interest on the $20,000 they are borrowing. This is another reason accounts can be wiped out if a currency stays relatively flat for a few days.

There are a multitude of exceptional Forex training courses that go into detail on the proper methods to control margin related risk. If a new trader in the Forex markets does not understand this simple concept at the highest level they simply have little or no chance of being successful. You really need to take your time to learn currency trading from the bottom to top in order to be profitable. Some of the Forex trading systems have warning systems in place when one is using more than an acceptable rate of margins, which can be extremely helpful since normally as an investor advances in there career they become involved in more than one currency trade concurrently. Simply put, if you don’t understand all of the consequences of utilizing the margins offered by the Forex brokerage firms you really should not be trading the currency markets.

We have researched, tested & reviewed 100s of Forex Courses, Software Systems and Brokerage Firms which we only list our TOP 10 to help you LEARN FOREX TRADING. For 100s of FREE FOREX TUTORIALS please visit LEARN CURRENCY TRADING. Good Luck! I look forward to seeing you on the trading floor making money! William R. Alheim, Jr., CPA, MA