DislikedEURUSD, M5, 2011 June 16
M5 Stochastic Divergence.
Short @ 1.4158 (mS1)Ignored
EURUSD, M5, 2011 June 16
EURUSD, M1, 2011 June 16
Exit @ 1.4120
Profit: + 38 pips
Sidus System confirmation' indicator? 52 replies
Manual confirmation - when does it kick in? 0 replies
News with indicator confirmation 4 replies
Vegas Daily - Entry Confirmation 0 replies
trend indicator confirmation 0 replies
DislikedEURUSD, M5, 2011 June 16
M5 Stochastic Divergence.
Short @ 1.4158 (mS1)Ignored
For part-time traders with more experience, and with time to research conditions and circumstances that may impact currency prices, the following pairs also offer high liquidity.
Because the part-time trader has a limited time during which to trade, experts advise trading only the USD/EUR pair. This pair is most frequently traded, and there's an abundant amount of readily available information on these currencies in print, broadcast and internet media.
Conversely, experts discourage part-timers from trading two foreign pairs that may require more sophisticated knowledge, and for which information may not be readily available. (To learn more about trading the U.S. dollar, check out Play Foreign Currencies Against The U.S. Dollar - And Win.)
2. Set Up an Automated Trading System
Part time traders may opt to trade on their own, or choose an automated trading program to make trades for them. (For more on automated trading systems, see Forex Automation Software For Hands-Free Trading.)
There's a variety of automated trading programs with a full spectrum of functions available on the market. Some of them may be able to monitor currency prices in real time, place market orders (impose limit, market-if-touched, or stop orders), recognize profitable spreads and automatically order the trade. Please note, however, that even if a trade is ordered, there's no guarantee that the order will be filled on the trading floor at the price expected, especially in a fast-moving, volatile market.
A so-called "set and forget" program may be the best way for a beginning part-time trader to start learning about forex trading, and allow the software to make the automated decisions. Several automated programs offer a simple "plug and play" capability - an easy way for part-time beginners to start trading. This in one of the major benefits of automated trading - disciplined, unemotional trades. More-experienced part timers may prefer a more hands-on trading approach, and choose automated trading software with more programmable options. (To learn more, see Forex Automation Software For Hands-Free Trading.)
3. Apply Dispassion and Discipline
For traders who make their own trading decisions rather than relying on an automated system, discipline and dispassion are essential for success. Part-time traders are advised to take profits when they materialize instead of anticipating wider spreads and bigger profits. This requires a degree of self-discipline in fast trending markets in which favorable spreads are widening. Because a trend can turn around instantly and be influenced by some external event that a part-time trader may be unaware of, successful traders take profits when they can. Trailing stop and stop market orders may be imposed to protect against sudden market reversals and to minimize risk. But as mentioned previously, there's no guarantee that an order will be filled at the anticipated price. (For tips on how to analyze your trading and improve, read 4 Reasons Why You Need A Forex Trading Journal.)
Part-time traders with little or no experience are advised to start trading small amounts of currency. By opening a mini forex account, which requires a smaller-than-standard cash deposit, traders can control 10,000 currency units. The standard currency lot controls 100,000 units of currency. Minimum cash deposits for a mini account may start at $2,000 and can be as high as $10,000.
With the leverage offered to traders, which can run as high as 400-to-1, potential profits and losses can be substantial. Leverage is defined as borrowed money, obtained from lending institutions or brokerage firms, which allow traders to buy currency lots on margin. In other words, leverage permits traders to put up only a fraction of the cash represented in a currency lot. For example, with 1% margin, only $1,000 is required to trade a currency lot worth $100,000. (For more insight, check out Forex Leverage: A Double-Edged Sword.)
Finally, never put more money at risk than you can afford to lose.
The Bottom Line
Successful part-time forex trading is a matter of discipline, dispassion and trading the right currency pairs at the right time of day. For the beginner, an automated trading program is probably the best way to break into forex trading, at least until the neophyte trader becomes more familiar with trading procedures and possibilities.
Like any aspect of investing or speculating, there's no guarantee that you'll make a profit. However, smart, knowledgeable, experienced traders - and even beginners at forex trading - will have a better chance at making money if they follow the few simple principles described above. (Aspiring forex traders can start by reading Forex Trading: Using The Big Picture.)
by Marc Davis
Marc Davis is a veteran journalist with more than 20 years experience reporting and writing on business, finance, corporate management and legal subjects. His writing has been published online and in print by Adweek, Arthur Andersen, The Chicago Tribune , Encyclopedia Britannica, Insight Magazine, The John Marshall Law School Magazine, The Journal of the American Bar Association, Rotarian, and numerous other national periodicals and websites.
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