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There is nothing better than free forex signals, is there?

When I first started on my forex trading adventure, I just could not understand most of the terminology or concepts of the market. It was obvious that currency trading was a completely different animal than my other business ventures. free forex signals.

Here I was trying to juggle my day job and at the same time having to wake up at about 3a.m. in order to prepare for the European currency trading session.

The first days were exciting, but the excitement soon wore off after I realized that:

• Waking up at 3 am is not fun,
• I needed to learn more about fx trading, and
• I was slowly leaking money to someone else who knew more about this market

Free Forex Signals Providers as an Option

I quickly realized that I needed some help.

At the time, the newest thing in fx trading were forex signals service providers. All I had to do was get a subscription to one of them and I was going to laugh all the way to the bank.

I could surely afford $30 a month for a currency signals service that promised me at least 100 pips a week.

It never worked out that way. It turned out that even the forex signals companies were finding it as hard as I was to make a profit trading.

Free Forex Signals Providers

It was obvious that I needed to learn more about this market. The more I read, the more I knew I had a problem.

It was then that I decided to use these free forex signals to my advantage. Why not study how they were trading as I developed my own forex trading strategy?

This is how I came up with the forex fractals strategy, the guppy moving averages and the cornflower trading systems.

I would come up with an idea, then check any free forex signals blogs and find out what they thought. The biggest problem that new forex traders will come across is the lack of mentors in this market. It is not easy trading on your own. This helped in with that issue.

However, with free forex signals providers, you have your very own mentor. The best thing about it is if your trading plan is consistent with theirs, you are likely to have a winning trade.

I got to find out that most free forex signals providers were simple traders just like me. Other than mentorship, we soon became friends and managed to keep each other company during the long lonely early mornings. The good thing is that even those that quit trading forex are still my friends and that is worth more than 100 pips.

The major advantages of using free forex signals include:

1. You create a sounding board for your trading ideas,
2. You are able to meet better traders who could be your mentors,
3. You can get to have company as you are trading

Most important, you learn that you are not alone in your quest to make a living as a currency trader.

So go ahead and utilize free forex signals service providers. I did and I’m not complaining.

More information on free forex signals

• Forex Kagi Review (slideshare.net)
• Gauging Forex Market Sentiment With Open Interest (forbes.com)
• ForexLive Asian market open: majors unchanged after event-free weekend (forexlive.com)

That is what you need to get free forex signals

Neutralize Susceptibility: According to Mark Douglas, If a trader hasn’t neutralized his susceptibility to give his winnings back to the market, then he is not what I define as a successful trader.

Correct Market Attitudes: According to Howard Abell, True Trading Mastery derives from understanding the relatively small role technical analytical factors play in the overall trading process and the inestimatably important role that correct market attitudes and beliefs exert in facilitating a consistently profitable result.

The Farmer’s Shadow: According to Bob Koppel, True Trading Mastery derives from understanding the relatively small role technical analytical factors play in the overall trading process and the inestimatably important role that correct market attitudes and beliefs exert in facilitating a consistently profitable result.

Transaction Costs: According to Van K. Tharp, I seldom see a system that over a number of years produces profits that are much bigger than the transaction costs it generates – that is, if a system generates a million dollars in net profits, then it
probably generates more than a million dollars in transaction costs.

Do Not Overlook Information: According to Van K. Tharp, We typically trade our beliefs about the market and once we’ve made up our minds about those beliefs, we’re not likely to change them. And when we play the markets, we assume that we are considering all of the available information. Instead, our beliefs, through selective perception, may have eliminated the most useful information.

Understand the Concept: According to Tom Basso, The more you understand the concept you are trading, how it might behave under all sorts of market conditions, the less historical testing you need to do.

Losses: According to William O’Neil, My philosophy is that all stocks are bad. There are no good stocks unless they go up in price. If they go down instead, you have to cut your losses fast. Letting losses run is the most serious mistake made by most
investors.

Deal with Randomness: According to Larry Sanders, As humans we do not come equipped to deal with the variety of randomness that is around us every day. Many professions deal with making processes and things work reliably. We are taught to strive for
perfection, for high scores in school and in sports. This can be a handicap to traders. There is no perfection in trading. Instead traders must put probability in their favor.

Trading Paradox: According to Mark Douglas, I know it may sound strange to many readers, but there is an inverse relationship between analysis and trading results. More analysis or being able to make distinctions in the market’s behavior will not
produce better trading results. There are many traders who find themselves caught in this exasperating loop, thinking that more or better analysis is going to give them the confidence they need to do what needs to be done to achieve success. It’s what I call a trading paradox that most traders find difficult, if not impossible to reconcile, until they realise you can’t use analysis to overcome fear of being wrong or losing money. It just doesn’t work!

Trading Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.

Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. You can avoid the mistakes that 90% of Forex traders make and  become part of the select 10% group of successful Forex traders. Learn more at: http://www.forex-trading-system.name

This week I got a few emails and though I did not want to post today as I want to watch the red sox beating the rockies,but I just can not help myself.

I was asked what is the worst indicator in forex trading.

It was a hard question but to be honest , all indicators are useful to a point and all indicators work if you are looking for something in particular. If you are a trader, you must be looking for something in particular. Let me give you an example, I am a man and I have been told that women love good things.However I learnt not all women love roses. Some love red roses others white roses. If I want to be hated by a woman , get her a rose or flower she does not like.If you want to be broke , then get a trading indicator at the wrong time.

Trading is a game and a very serious game that can make you broke.Take it as a business and you will not be disappointed.. If you use trending indicators during news releases, you will regret it. If you use scalping indicators during a trend, you might never trade again.

The biggest problem as a trader is trying to figure out if the market is trending or choppy. Your bigger problem is getting an education to learn what the difference is. There are many tools you can use. One of them is seasonal trading, another is fundamental trading, another is technical trading but the most important is your mind.

A traders mind should understand that trading gurus are a dime a dozen and trading gurus believe in the forex holy grail.The trading holy grail might exist but since I have not seen it, I can only do myself a favor by learning and reading as much as I can.

Get yourself in a position where you can look at a forex chart and know that the market is choppy. Get yourself in a position where you hear that payrolls are down this month and instead of selling you buy because yesterday you heard that new home sales went up. In other words get yourself in a position to succeed. The best indicator is yourself and your education.

My worst forex indicators are listed below.

1. Forex Volume Indicators

If there is no central market in forex so how can anyone know the volume? For me anyone who talks about candlesticks which are volume indicators is a forex guru, who will fleece me.There is simply no volume in forex as there is no central market so each and every indicator that uses volume is null and void.

2. Back tested Forex System

If you back test any forex system with esignal , the results are perfect, try that on Amibroker you will be very surprised then add your own broker , you will be broke.Since forex does not have a central market, what the hell are you back testing? Have you ever bought a forex metatrader system that worked 80% of the time, put it on your charts and failed miserably? The answer is very simple,it has nothing to do with your system. Every forex broker has their own data and they can do anything with it. Your metatrader system is built on strategy trader however you will trade it on North finance. It will fail miserably all the time. Though you bought a good metatrader system, your broker prices will be different and believe me brokers are not your friend.

3. Forex Gurus

There are many forex gurus I have heard off but there is only one that I trust. His name is ‘The Oracle of Omaha ‘ who predicted 2yrs ago the fall of the dollar. There are some who I will not name here but you know them but there is one who is very notorious .Forex bastards are a scam . I need to add the period. These guys have started some 3 other websites including forex secret society and they claim to have insider information. First of all having insider information is illegal and ask Martha Stewart about that fact. But the things that annoys me is seeing them trading 10 second charts. Really? That’s all I’ve got to say about that.

4. You will be a Forex Millionaire

All I’ve got to say about that is , YEAH RIGHT!

Ladies and gentlemen forex trading is not 4xmade easy , it is hard and just like any other business you have to work hard. When I started trading 7yrs ago we used to be a group of 10 ,only 2 of us are still trading. Think about that.Don’t go into forex trading with hype, take it like any other business. It will be hard, it will be tough but only the tough will remain and it is a a wonderful actually the best internet business you will ever have.

We have seen that the forex market is also a seasonal trading market , some months are just better for currency pairs than other over the course of a long period of time. In this case, we used 10 year charts to best understand the trends over time and include enough time to show a true trend.

GBPUSD Seasonal Trades

September is a good month for GBPUSD.In eight out of the last 10 years, the GBPUSD has rallied in September.Europe generally takes August off as a time for their seasonal vacations or holidays as they’re called across the pond, this is one of the reasons stated for the GBPUSD to gain ground as European traders get back to the markets and move back into summer positions. Breakdowns in 2005 and 2006 might show some disagreement to this trend. We’ll see how it develops.

EURUSD Seasonal Trades

January is a downer for EURUSD This one has a clear cut answer as for why this trend has developed. At the beginning of each calendar year, when financial audits and tax info is coming out, many funds move money back into their own currency. In January, Forex and hedge funds bring money back into a local currency to prepare for calculations of earnings and makes asset accounting that much easier.

Trading these trends of course has some risk, overall though, all of these trades do average out to bring some profitability to your trading. I would suggest, if you were to take advantage of these trades, would be to trade an Fxbox or a similar product to bet that the currency pair will not end the month below a certain number. Brokerages such as Oanda offer this trade.

Believe it or not, the Forex market is very prone to seasonal markets. As some months fair better for currency pairs than do other months and this pattern occurs year after year. That’s one of the reasons automated trading systems tend to fail in some months and others are just fantastic.

The month of July is traditionally a good period for the USDJPY pair. In the last ten years, only once has the USDJPY dropped in the month of July. The first quarter ends in Japan just as the second quarter begins in the US, this must be one of the reasons that the USDJPY flourishes during this period.

These quick gains in July are often quickly erased in the month of August. Perhaps the drop is due to the seasonal drop in oil prices in July, causing a drop in demand for the US dollar. In 9 out of the past ten years, the USDJPY has lost considerably to in August right after July?s gains. The losses are not just held to the USD, other currencies such as the Euro and British Pound also fall seasonally to the Yen. August is the best month in the calendar year for the yen to advance against other currencies.

No trading system is perfect and I don’t advocate taking expensive hedges every year to look for the upside in July and downside in August. These numbers should make you reconsider taking alternate positions or cutting positions in these months to get a less expensive entry into a trade. Tomorrow I will add a few more currencies to this limited list.

We have already discussed how to trade using forex fundamentals and also seen why I basically the top 5 reasons why I do not trade forex news .However ,this does not mean that one cannot make living trade forex news and forex fundamentals. Here are some of the ways that I think can help a forex trader increase their chances with trading forex fundamental Analysis.

1. Get the Whole Market Picture

If you decide to trade forex fundamentals on the basis of news, do it right and get the whole picture and not just pieces of it.A lazy trader is only interested in the that part of the market that interests him. For example if you are trading crude ,one may need to know what the current production levels are, what are the crude stockpiles,how do they compare to previous months and what is OPEC doing. Just because there is a hurricane warning in the Gulf does not necessarily mean that the crude market goes up.

In forex it doesn’t mean much to say that the dollar is going to go up or down just because the feds has cut rates. Since forex is a two currency game , one currency movement does not necesarily mean that it will weaken with all other currencies.In the last dollar sell off ,we saw that though generally the faller lost value ,the rate of fall was not equal accross the board. It fell less in percentage terms against the yen than against the euro.

2. Complement Fundamental Analysis with Technical Analysis

Now since you have a sence of what the fundamentals are telling you, why not complement that with simple technical analysis? What is so hard about setting up a simple moving average crossover to confirm your market entry.There is nothing very complicated about a moving average crossover and you will feel more at ease with your trade if both your fundamental analysis and technical analysis agree.

3.Trading Patiently

The most important thing you can ever do for your sanity in trading forex news is to be flat before the market news.As a high probability trader ,you know that it is not worth trying to guess where the market is going before the news is released.If you are not flat ,you are gambling not trading.

The normal market report after any type of forex news release is a spike. The next move is a retracement sometimes to keep going lower and sometimes to come back and rally. Jumping on board before the market settles is dangerous to your account balance. The best thing you can do is to sit back and wait for the market to pick a clear direction and then trade when all the noise is over. I call any trader who trades those spikes the forex broker’s best friend. I have seen 200 pip spikes and stops never being honoured, gaps in one broker charts that are not on any other broker. I have seen forex gurus get wiped out in one trade and I personally have endoured losing half my account in 1 minute of trading.

Here is my simple tip

Note how the market is trading before the release of a news event. Whichever direction it is moving in is the what the consensus is thinking. If the number is in line with expectations, this is the direction the market should move and any surprises may cause it to move the other way. If the market does not continue in the direction it had been moving and the forex news was expected,the best thing to do is to not enter that market as it failed to move the way it should.

So in short

1. If the market should go up and it doesn’t , it’s going lower.
2. Don’t jump into a trade as soon as the news comes out. My rule of thumb is to wait 15 minutes
3. Let the market digest the news.
4. Be flat before the news release otherwise you should go to vegas and gamble.

We shall continue with this tommorow

The dollar is one of the most used currencies in the world, and no
doubt because there is so many of them.

Regardless of political policy and the United State’s federal reserve,
there has to be a reason why the dollar is so popular.So why is the dollar fall related so much in the past week to oil volatility?

While the dollar falls, it also pushes oil to record highs. See, the
market adjusts accordingly to a falling dollar by bidding up the price
of oil. Cheaper oil means higher demand which means more expensive
energy for nations like the United States.

Good luck daytrading dollar vs oil

When we discussed the top 5 ways To Improve your Mental Forex trading we saw that it is important to understand your trading system and from the discussion on how to setup a forex system # 4 we continue with the first indicator we shall be using.The Forex Fractals

What is a fractal

A Fractal is one of five indicators of Bill Williams’ trading system, which allows to detect the bottom or the top.
These basic fractals are composed of five or more bars. The rules for identifying fractals are as follows:
* A bearish turning point occurs when there is a pattern with the highest high in the middle and two lower highs on each side.
* A bullish turning point occurs when there is a pattern with the lowest low in the middle and two higher lows on each side.

Using the forex usdchf daily chart below we see an example of a Down (bearish) Fractal at point A and an exmple of an Up ( bullish ) fractal at point B.

How to Trade Using Forex Fractal

Fractals essentially break down larger trends into extremely simple and predictable reversal patterns.You can use them for in various ways.

1. Finding the Forex Trend

What other indicators work with Fractals ?

1. Trendlines

Most new traders do not know how to draw a proper trend line. by simply using only the bars with the fractal arrow as your trendline points, it makes your forex trading very easy. The example in the forex chart below shows the last up bullish trendline drawn from fractal.
The trendline is from point 3 to point 4

2. Other Indicators are

Moving averages
Bill Williams Awesome Indicator
Bollinger Bands
We shall discuss these later.

It has become plainly clear after a long time forex trading that trading is more of a mental challenge than simple trading systems.I have endeavored to only look for forex trading systems that are easy for me to understand. I realized that I needed to keep my mind in shape and wasn’t going for a phd in forex trading but just wanted to make a living trading forex.

For those who wish to sharpen their minds these are some of the ideas I picked up

1. Understand your Trading System

It is not enough to say that I bought a mechanical system that gives me buy or sell signals. You need to know why that trading methodology was chosen. It doesn’t mean that you understand the mathematics but at least be able to explain to your 10 yr old daughter that " I wish to buy gbpusd when the 10/20 cross over long and rsi 45 is up". If you cannot explain your trading system to your grandmother, then you don’t know what you are trading.

2. Find a Mentor

Forex trading is a very lonely business. It’s just you ,the computer and all your fears. It might seem like fun in the beginning but after about 2 months of trading on your own, you start developing bad habits. Find yourself a mentor.

I don’t mean one of the high priced forex mentors online,though they aren’t all bad. The mentor must be someone who understands the trading system that you wish to trade. Don’t have an expert in pivots mentoring you in moving averages .Two blind mice can only smell each other. If you can’t find one, create one. Join any or all of the forex forums and invite other users to try and also work on your system.

3.Break down your Trading System

Break down your trading system to it’s smallest components. If it has 4 indicators then learn what each indicator does and how its applied. You will be surprised how soon you will be able to know when to make proper trading choices.By knowing the components of your system you will then be able to identify problem areas in your trading.

4. Put yourself in a Position to Succeed Trading

a) Healthy Sleep and nutrition habits – It is foolhardy to trade in the European market session on a bottle of coca cola if you are in the USA. Try water and try to sleep early. Waking up at 2am in the morning ain’t funny.

b)Relaxation and visualization exercises. Mentally rehearse making winning trades and following your trading methodology.You want to convince your mind that you are already a winning trader everyday.

c)Positive self talk. What is wrong with encouraging yourself to make even better trades? Re frame your negative emotions to positive. For example instead of dwelling on a losing trade, tell yourself that a losing trade statistically brings you to a winning trade.

5. Keep a Trading Journal

It is important for you to know where you are now versus where you were before. A forex trading journal is critical especially for new traders. Record your progress however small in the journal. You will find that you are actually improving as a trader especially if you write your trades.

Happy trading everyone and lets meet at the forex forum

In the meantime please find as much information as you can on

1. Fractals
2. Bill Williams Awesome Indicator
3. ADX
4. Fibonacci Retracements
5. Fibonacci Extensions
6. Daily and Weekly Pivot Points

as you can as the next section will be delving in depth into these indicators

For those that use fibonacci trader, the eco would be a great indicator to study