Social Trading – A New Trend In Forex Trading

Posted by admin on July 15, 2011
Jul 152011
 

It is a fact that today Forex Trading is one the fastest growing markets in the word that reached over $110 billion volume this year. Its rapid growth developed a social trading trend that shows a great popularity among Forex traders. Social trading networks such as eToro OpenBook provides the users with the real-time information of trading positions, strategy and profits of other traders. Every eToro user is able to watch, share and automatically copy the trading actions of his/her favorite real-time traders.

In order to take an advantage of the social trading, a Forex trader must know how to identify the top traders in the eToro investment network and follow them. Newbie traders don’t need to spend years of learning and practicing their trading strategy in order to start making profit. With eToro social trading network, everyone can start trading like a pro by copying the strategy of their favorite traders.

Here are few tips that can help every new trader successfully benefit from the social trading.

1. Find the list of the eToro’s best traders by visiting the OpenBook Rankings page. You can find the best traders sorted by 1 week, 1 month, 3 months, 6 months and 1 year total gain.

2. Decide which traders you would like to follow and copy. Looking at the portfolio of the traders you will have an idea about a trading strategy of each trader. Whether it is a long term or short term trader, does his trading strategy make him a stable income or not, what risk level (leverage) he/she is using, what currencies does he/she trade. All these factors are very important when choosing the traders to follow and copy. You must trust the strategy of a trader you will copy as he/she is the one who will manage your investment.

3. Pay attention on the number of followers every guru trader has. It is a great indicator of the trader’s popularity and trust among other eToro users. The gurus who have 500 – 1000 followers are more likely to be highly successful, with extensive experience and sharing their expertise with others.

4. Decide on the amount you want to invest per trader you have chosen. The eToro copytrader feature allows you to invest maximum 20% of your initial deposit per trader. You can start from a small amount and increase it any time when you feel confident in the trading strategy of the traders you copy.

Social trading opens a door to easy and successful Forex trading for every person interested in financial markets.

Click here to open eToro trading account and start using this amazing tool.

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Why Almost All Forex Traders Lose Their Investments

Posted by admin on January 28, 2011
Jan 282011
 

It is not a surprise that almost all of the Forex traders finally burn their money. The reason for that is very simple – most of the speculators have too large risks and hope to gian profits. They don’t desire to admit the fact that Forex trading is not about luck and if they were lucky in the beginning, it won’t stick to them all the time. If a person tells you that during a month he made $500 out of first $50, it may be real. Also the truth is that if this trader doesn’t change his trading approach, he may end up with zero. Every trader has to be prepared to the failure.

One of the main parts of trading method is the wise money management. Let’s take a look at the risk levels that might be used when opening a trading position. Risk is the level of % of a current deposit which can be afforded to be abandoned if your trade reaches the stop loss.

The world’s main Forex traders strongly advise that the risk level must keep at 2-6% of the preliminary investment. If you don’t have much trading knowledge, we recommend you to arrange your risk level to no more than 2% only. If the number of your deposit has been changed, the lot size should be recalculated accordingly based on the rule of 2%. If your investment is small and your Forex broker doesn’t let you open a trade with a small risk, it makes sense to move to another Forex broker where minor lots and mini accounts are allowed.

Another key factor in Forex Singapore trading is the time frame you want to trade on. According to the knowledge and advice of the greatest traders, you should avoid too frequent transactions. It is almost impossible to foresee the prices within a day, mainly for beginners. It is tricky and risky to catch the market’s movements during a day.

Your best option would be trading on the daily charts, where each and every Japanese candle stick springs up during a day. Thus you won’t have to spend hours facing your computer trying to make a few dollars. You will need just few minutes a day to make the research of the market and implement the trades. You won’t be nervous and under pressure trading on the daily charts. Trust me trading within a day and scalping requires a strong character and mental health and is not for anyone. Trading on the daily charts doesn’t include high risks and minimizes the chances of creating a mistake.

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Crowd Behavior And Its Influence On Forex Market

Posted by admin on November 15, 2010
Nov 152010
 

Every day a new idea or approach to Forex trading is coming up. Recently we noticed a certain strategy of market’s analysis, when a trader focuses only on the single financial instrument (currency pair) without looking into the analysis of other instruments.

According to the statement of Alexander Elder, a famous specialist in technical analysis, the behavior of traders in the market is very similar to the behavior of crowd, which can be characterized by certain laws of mass psychology. Mass effect simplifies thinking, eliminates personality and leads to the manifestation of forms of herding, collective behaviors, which is more primitive than individual. One of the features of primitivism is the increasing role of a leader.

A Forex price chart, according to Elder, plays a role of a leader, attracting a consciousness of crowds of the market. Such psychological explanation for the behavior of a market’s price determines the involvement of the theory of dynamic chaos. Some predictability of the market is explained by the primitive crowd behavior of traders, who form a single chaotic and dynamic system with a very small number of its inner freedom.

According to this theory, if you wish to forecast the future direction of Forex price movements, you need to go away from the crowd and become smarter. In order to do that, you have to develop your own system of game that is based on the certain rules and laws of market’s behavior and follow it. Don’t give up to the influence of emotions and Forex market’s rumors. In other words, forecasting of price movements must be based on a certain algorithm. You have only to create such an algorithm. There are multiple software available that can help you creating a trading strategy based on fundamental and technical analysis.

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