For the past five years my only source of revenue has been revenue derived from trading on the forex market. Over that time period, lots of people, perhaps somewhat envious of my ability to earn money from home without having to report to a boss, have asked me what it will need to buy for a living. How might one arrive at a point where one feels confident enough to get away from ones regular career, strike off on ones own with no warranty of a typical paycheck, and put what might conceivably be ones entire savings up to that point at risk in the markets?

While I unfortunately cant actually give you confidence in you skill to make it on your own, nor the stomach to risk your cash savings, I can spot you the pragmatic steps that I took to get where I am today. These steps do not include the most obvious ¨learn of the existence of the forex market¨, as presumably you already know something about trading, or you wouldnt be reading this pos.

Step 1) Start saving your income. To buy professionally you’ll need a bankroll, and one that is large enough to withstand the ups and downs that are a natural part of trading. For me, this was easy. I had been putting money aside ever since I started working. Those like me that have been raised to figure out and appreciate the value of saving, will accomplish this quite naturally. Yet, if you are a habitual spender and are conversant in living paycheck to paycheck without putting anything extra aside, be prepared to expend some serious effort curbing your habits and learning to save rather than spend. How much money will you need? Unfortunately I cant answer that specifically because it will rely upon the trading strategy that you employ, the amount of leverage you

plan on trading with, and the sum of money that you ought to take out in profits. You should count on having a bare least though, of a full six months salary saved up before beginning full time trading. One years salary would be still better. Remember that the larger your bankroll, the additional money you can earn without risking an unnecessarily large percentage of your bankroll.

Step 2) Get an education. You cant start trading before you know something about the market you are trading in. This education does not need to be formal (as in University classes), and you do not have to understand economic forces as well as Alan Greenspan before getting started. You should, still, have a basic understanding of why the market that you are trading in exists, how buying and selling on that market works, and the strategy that you will employ to take your profits out of the market. There are a great deal of totally free resources on the web that are valuable your time to read (and you might know some opinions and ideas that are NOT worth your time, but reading some of those that are not worthwhile is part of the process of developing discernment about what is and is not an excellent resource).

There are also some inexpensive trading courses on the internet that are helpful. Part of the education process is coming up with a trading strategy that you are snug with, as well as a money management strategy to make sure the long term viability of the trading strategy. There are numerous good trading strategies out there, but irrespective of which one you select, you should realize that the traders that are successful cut their losses early and let their winning trades run. This may be somewhat more hard than it sounds, but is actually the cornerstone to making money trading.

Step 3) Enroll in a demo trading account and begin practicing while you are not at your regular job (or, if you’ve time free and internet access at your work, WHILE you are at your regular job). We list some good forex dealers at forex-rates, so if you are preparing to trade currencies, be sure and enroll in a demo account with one of the listed brokers. In order to get a real feel for the trading strategy that you have picked out, you must do a great deal of practice, so don’t hurry with this step. Dont start trading with real money until you have an actual history of successful demo trading.

Step 4) If you are making money trading on paper and are comfortable with your trading strategy, proceed and get rolling trading for sure on a part time basis. Dont include all of your savings as part of your trading bankroll yet. Start slowly and gain a comfort level. As your confidence builds, move money from your savings to rise the size of your bankroll.

Step 5) When you can calculate that your regular gains from real trading (from step 4) are at a stage where, if you were to trade full time utilizing your current bankroll, you would be making profits that slightly exceed your present employment salary, you are ready to quit your work and trade full time. Remember, you want your trading profits to exceed your current salary. This will present you with the opportunity to maintain your current financial level, but at the same time carry on improve your trading bankroll, which will let you earn more and additional money as the size of your available funds grows larger.

It is significant to have patience with yourself at all of the steps mentioned. Maintain emotional equanimity and realize that fear and greed are a traders most hazardous nemesis. If you can hold on to these emotions under control and look after the discipline established while following these steps, you can look forward to making it as a specialist trader.

Technorati Tags: day trading, forex market, forex trading, full time trading, professional trader, trading for a living

Why you ought to be responsive to signs of strong stock and signs of weak stock in the markets. Putting your faith in hope won’t get you profits in the markets. You need to realy understand how the markets work. And being able to name uptrend and downtrend in the markets is essential

The’re two questions that are always asked:

1. What you should do when the security is trending down?

2. What you should do when the security is trending up?

Before these two critical questions may be answered, Continually don’t forget that true weakness comes in on an UP bar and ….

True strength Continually comes in on DOWN bars.

On true signs of downtrend you ought to:

a) initiate new short position(s)

b) reverse old long positions to short

c) close out any long positions

On signs of uptrend you ought to:

a) initiate new long position(s)

b) reverse old short positions to long

c) close out any short positions

Why is your reaction to a strong uptrend (or downtrend) so crucial?

Because whenever a genuine uptrend (or downtrend) is seen the market makers and professionals will observe it right away and react appropriately.

So what is meant by a “true” uptrend (or downtrend)?

You should find a powerful volume bar right away to support your role.

If no such bar is present, that shows that the professional money is not curious about the move because they know the market is still weak (or strong) and you can expect a move in the opposite direction to what you might have thought. Probably resulting in another period of accumulation or distribution prior to the next signal.

The Golden Rule:

Understand where the professional money is and follow them. If they aren’t interested, neither should you be. If they’re interested (shown by buying/selling), then back your judgement.

Most traders don’t have a clue as to what’s going on in the markets. But you will, if you take the time to understand how the experts operate and what causes the moves on the market. You will have to time your entry and exit indicates near perfection.

For instance: After a sharp move up you ought to expect a down move. After a powerful bar up, sellers are tempted by the new high costs. This can be viewed by any lack of follow through and the look off a powerful down bar. Those who matter ( the experts) would see this, enter their positions, and force the market down.

Then again, after a sharp down move, you can anticipate weakness. Look for a classic “test” Search for the experts entering the market and go with them.

It is essential that you actually understand how the markets work before you set about trading. So many people ignore this fact. This is one of the reasons why they never really “get it”.

.

Technorati Tags: commodities, day trading, dow, dow jones, forex, ftse, nasdaq, nikkei, online trading, shares, stock exchange, stockmarket, stocks, trading

A Winning Approach to Trading in the Stock Market:

Many traders lose simply out of ignorance. They base their trades on hunches, news, or tips from friends, and do not define specific risk and profit objectives before placing trades.

Others have the merit of educating themselves but fall victims of their emotions. They hold on to losing positions hoping they will turn into winners and sell winners by fear of losing a small gain. They overtrade to fulfill a need for action or by fear of missing out.

The consistent winners follow a winning approach:      

They have a strategy to enter and exit trades

They use good money management 
They take consistent actions, they follow a trading plan 
They keep good records so they can review their actions 

They avoid overtrading 
They have a winning attitude 
A strategy to enter and exit trades
You need to a strategy to put the odds in your favor for each trade you take. Your  strategyshould be as objective as possible and include the following elements:
      
Entry: conditions required before you can enter a trade – may include technical analysis, fundamental analysis, or both. 
      
Initial stop loss: price at which you will close the entire position if it does not go in your favor. The risk per share is the difference between the entry price and the initial stop.
  
Initial price objective: price at which you will take some or all profits if the trade goes in your favor.
Trade management: set of rules that dictates your actions while a trade is opened. It may include trailing stops, closing position, etc.

For every action you take, the reason should be clearly described in your strategy. 

Money management rules to keep losses small
The goal of money management is to ensure your survival by avoiding risks that could take you out of business. Your money management rules should include the following:

Maximum amount at risk for each trade. The different between your entry price and your initial stop loss is your risk per share. Your maximum amount at risk for each trade determines the share size.
Maximum amount at risk for all your opened positions. 
Maximum daily and weekly amount lost before you stop trading – avoid trying to trade your way out of a hole after a loosing streaks. 
During your learning phase, your goal should be to survive, not to make money. Start with low limits and raise them as you become a consistent winner otherwise you will simply go broke faster.

 
Good record keeping
Although the process of gaining experience cannot be rushed, it can be made much more efficient by keeping good records of your actions. Good records will allow you to: Review your actions at the end of each day to make sure you followed you strategy, not your emotions. 
Learn from your losses – they cost you money, make sure you get the education in return. You should also keep a journal of your observations.
A trading plan to keep emotions out of  your decisions.
During trading hours, emotions will turn smart people into idiots. Therefore you have to avoid having to make decisions during those hours. This requires a detailed trading plan that includes your strategy and your money management rules. 
For every action you take during trading hours, the reason should not be greed or fear. The reason should be because it is in the plan. With a good plan, your task becomes one of patience and discipline.
You have to follow the plan without exception. Any valid reason for an exception – for example, correcting an oversight – should become part of the plan.

Overtrading
Sometimes the best thing to do is to do nothing. Not trading on those bad days is key to becoming a consistent winner; in some situations it is very tempting to overtrade: 
       If you trade to fulfill a need for action, to relieve boredom
       If you can’t find the proper setup but can’t wait
       If you fear you are missing out on a great trade or on a great market
       If you want to make up for losses (revenge)
       If you trade to feel like you are working instead of sitting around. Trading involves a  lot         of work other than the actual buying and selling. 
      
      You should not trade under the following conditions: 
      
       You are not following your trading plan 
       You have reached your daily or weekly maximum loss 
       You are sick or very tired
       You are very emotional (upset, pressured to make money, self-esteem destroyed) 
       You are using new tools you are not completely familiar with 
       You need time to work on your trading plans
           
A winning attitude
Losing traders look for a “sure thing”, hang on hope, and avoid accepting small losses. Their trading is based on emotions. You must treat trading as a probability game in which you do not need to know what is going to happen next in order to make money. All you need to know is that the odds are in your favor before you put a trade. 
If you believe in your edge, which is you believe that the odds in your favor for each trade you enter, then you should have no expectation other than something will happen. 
Your attitude will have a direct influence on your trading results:Take responsibility for all your actions; do not blame the market or world events.  
            
Trade to trade well and for the love of trading, not to trade often and not for the money. The money will come as a result of trading well. 
 
Do not be influenced by the opinions of others. Reach your own decisions and follow them.  
Never think that taking money from the market is easy and never assume that you know enough.
Have no particular expectation when you place a trade because you know that anything can happen. 

Do not try to guess the future; trading is a game of probabilities. 
Use your head and stay calm; do not get excited or depressed. 
Handle trading as a serious intellectual pursuit. 
Do not count how much money you have made or lost while you are in a trade – focus on trading well.

Technorati Tags: day trading, day trading courses, online trading, stock market, stock trading, swing trading, trading logs, trading software, trading systems

They have a strategy to enter and exit trades         They use good money management.          

They take consistent actions, they follow a trading.

They keep good records so they can review their actions.          

They avoid overtrading        

They have a winning attitude A strategy to enter and exit trades. You need to have a strategy to put the odds in your favor for each trade you take. Your strategyshould be as objective as possible and include the following elements:      

Entry: conditions required before you can enter a trade – may include technical analysis, fundamental analysis, or both.       

Initial stop loss: price at which you will close the entire position if it does not go in your favor. The risk per share is the difference between the entry price and the initial stop.  

Initial price objective: price at which you will take some or all profits if the trade goes in your favor.

Trade management: set of rules that dictates your actions while a trade is opened. It may include trailing stops, closing position, etc.

For every action you take, the reason should be clearly described in your strategy. 

Money management rules to keep losses smallThe goal of money management is to ensure your survival by avoiding risks that could take you out of business.

Your money management rules should include the following:

Maximum amount at risk for each trade.

The different between your entry price and your initial stop loss is your risk per share. Your maximum amount at risk for each trade determines the share size.

Maximum amount at risk for all your opened positions. Maximum daily and weekly amount lost before you stop trading – avoid trying to trade your way out of a hole after a loosing streak. 

During your learning phase, your goal should be to survive, not to make money. Start with low limits and raise them as you become a consistent winner otherwise you will simply go broke faster. 

Good record keeping.

Although the process of gaining experience cannot be rushed, it can be made much more efficient by keeping good records of your actions.

Good records will allow you to: Review your actions at the end of each day to make sure you followed you strategy, not your emotions. 

Learn from your losses – they cost you money, make sure you get the education in return. You should also keep a journal of your observations.

A trading plan to keep emotions out of  your decisions. During trading hours, emotions will turn smart people into idiots.

Therefore you have to avoid having to make decisions during those hours.

This requires a detailed trading plan that includes your strategy and your money management rules. 

For every action you take during trading hours, the reason should not be greed or fear.

The reason should be because it is in the plan. With a good plan, your task becomes one of patience and discipline.You have to follow the plan without exception.

Any valid reason for an exception – for example, correcting an oversight – should become part of the plan.OvertradingSometimes the best thing to do is to do nothing.

Not trading on those bad days is key to becoming a consistent winner; in some situations it is very tempting to overtrade:       

If you trade to fulfill a need for action, to relieve boredom.      

If you can’t find the proper setup but can’t wait.       

If you fear you are missing out on a great trade or on a great market.      

If you want to make up for losses (revenge).      

If you trade to feel like you are working instead of sitting around.

Trading involves a lot work other than the actual buying and selling.            

You should not trade under the following conditions:             

You are not following my trading plan.        

You have reached your daily or weekly maximum loss.        

You are sick or very tired.      

You are very emotional (upset, pressured to make money, self-esteem destroyed).        

You are using new tools you are not completely familiar with.        

You need time to work on your trading plans.          

A winning attitude

Losing traders look for a “sure thing”, hang on hope, and avoid accepting small losses. Their trading is based on emotions. You must treat trading as a probability game in which you do not need to know what is going to happen next in order to make money. All you need to know is that the odds are in your favor before you put a trade. If you believe in your edge, which is you believe that the odds are in your favor for each trade you enter, then you should have no expectation other than something will happen.

Your attitude will have a direct influence on your trading results:

Take responsibility for all your actions; do not blame the market or world events.              

Trade to trade well and for the love of trading, not to trade often and not for the money. The money will come as a result of trading well.  

Do not be influenced by the opinions of others. Reach your own decisions and follow them.  

Never think that taking money from the market is easy and never assume that you know enough.

Have no particular expectation when you place a trade because you know that anything can happen. 

Do not try to guess the future; trading is a game of probabilities. 

Use your head and stay calm; do not get excited or depressed. Handle trading as a serious intellectual pursuit. 

Do not count how much money you have made or lost while you are in a trade – focus on trading well.

Technorati Tags: day trading, day trading courses, online trading, stock market, stock trading, swing trading, trading logs, trading software, trading systems

That was the good news. The bad news is that those companies are selling you the tools and service only. They do not sell you any guarantees of success. It does not matter if you profit or lose money, the trading company will get its fee for each trade anyway.

Since you are considering going into the stock market, most likely you are planning to get a significant return on your investment which should also be better than what you would get buy investing your money into mutual funds (less risky than single stocks) or even no-risk certificate of deposits (CDs) where returns are guaranteed.

Well, how can you get such returns? The answer of course is simple and well known: buy low, sell high. If you do it most of the time you’ll be a successful stock trader. Now the first problem comes: how do you know when to buy? There are probably several ways to do that, we do not discuss this here, let’s assume that you know somehow or think you do know. Lets say you got lucky and the stock after you bought it is going up, just as you planned.

Now another problem comes: when to sell? After the stock is up 20%, what do you do? Sell now, or wait until it is up 50%, 100% or 200%? Do you listen to investor news and do what everybody else does: selling, buying more, or continue holding the stock? If you choose one of the first two options, how much of the stock you should buy or sell? Or if you hold the stock, are you sure it will continue to go up, or you may end up waiting until the stock price is back to the original and than lose it’s value resulting in your losses.

The truth is some people actually do know the answers to those questions most of the time and actually make profit. The question is, are you as good as those people? Most people are losing money guessing and trying to time the market. If you’re new in this game and not planning to spend much time on research, chances are you will lose. You will be competing with professional traders, big players and insiders who profit mostly because many others keep losing. Plus what are the chances that you can predict the market? The chances are very slim.

Some may argue: “I had that stock, I sold it when it was up 20%, but if I did not sell it at that time, now it would be up 300%. How stupid I was when I sold it, if I did not I’d made a lot of money. I have to do this again. It really proves that I can make a lot of money there and it’s easy!” That is right you can make a lot of money, but it is not that easy as it looks.  Lets assume you did not sell the stock at the time it was up 20%. Then what makes you think you would wait until it is up 300%? You may have sold it when it was up only 25%. Or it may go down several times below 20% increase, you could have thought it was going down forever and sold it even with a lower than 20% profit.

The bottom line is that it is easy to look at the past and see all the mistakes you’ve made. However it is very difficult to do right things for the future. Unless you know market trends well, understand related industries and stock company financials, most likely you will not be able to make profitable trades. Even professional traders do mistakes and lose money. If you are not one of them or not planning to become one, your best bet would be investing into CDs, mutual funds or your own business.

Technorati Tags: before you start Internet stock trading, day trading, how to start trading online, how to start trading stocks on the iinternet, stock, swing trading, trading software, trading stocks on the Internet