forex fire

Money.

Indy, or Indiana Jones was one of my favorite heroes. Remember the movie about the Holy Grail and the scene where he has to choose between the holly grail and his life? And although it seemed that he lost from his touch the Holy Grail he gained his life! What is more important than survival first? Investments are no different than the eternal search for the holly grail! If someone finds the system that is 100% foolproof then here we found within seconds the next billionaire at the cover of all major economic magazines!

Stop for a moment! Look around you! Is there a chance for someone to discover the one system that beats everything else all the time and make someone extremely rich? And if someone becomes so much rich why would he or she want to share the secret with others? Why? After all if more people learn about this idea it will eventually be useless as some will try very early to get a spot and the effectiveness will go from 100% towards zero as fast as a super car accelerates from 0-100 Miles per hour what is the point? Come on give us a synopsis!

Some systems and trading ideas are better than others indeed. But no one is the best! Investing is a very fascinating thing! For start there are a lot of options from the traditional stocks to more risky ones such as options and also other alternative forms such as real estate or hedge funds. Have you ever thought that since the idea of the holly grail is that it is unique that could it be possible that such a system if it existed it would be impossible to fit for all occasions? Investing in stocks is much more different than investing in real estate or precious metals. But the marketing which is something very powerful these days wants us to believe that there are gurus everywhere fallen from the sky as angels!

Ok so Dear God, if not the holly grail please pass me the best guru to make me rich! Silence again. Why? Investing builds on some major steps.Education,training,experience,solid risk management, control of emotions, balanced life and motivation. Yes motivation and action. Being an Economist I discovered very soon the idea and passion must say of learning how to invest properly and hopefully make it a career.

But what someone needs is also passion. It is no fun watching the ticks of stocks movements or forex quotes. But if someone tries to make money out of it there is a cost. And the best way to pay this cost is to be a pioneer. Experiment with what you know or do not know about how the markets work. Put the odds in your favour making your analysis. You do not need to buy each book claiming that it has the one system that will make you rich or subscribe to a service or newsletter paying thousands of dollars per year. Be open-minded. Why pay a lot of money when the real cost could be much less? Is it impressive to cost you a few hundreds or thousands of dollars for their access to the Holy Grail that does not exist? Why to share it with you and split the profits?

On the other hand paying for research and guidance at a reasonable price is definitely not a bad idea if you trust the author and offers extreme good customer service. But once you learn how to invest even with the most basic way why would you need a mentor anymore? Have you ever wondered that if you win and make profit the key to success is consistency? Think of it. If you only could make lets say 5% each month and compound this amount each month then if you can do this for 10 years each month an initial amount of 10,000 will reach the amount of 348 times higher that is 3,5 million dollars. And if that investment is in stocks and add some quality meaning dividends earned then it could be much more. Ok 5% each month each month for 10 years may seem irrational to you but my point is to use it as an example. Change the numbers and inputs. Do your own homework and research.Diversify!Apply very good risk-management criteria. Have a passion for it. And a dream and a goal. My goal is to learn as much as possible about the financial markets and be a good trader. I may not become a top one but at least this is my holy grail : Consistency and Compounding. Keep it simple. All the best to your efforts and trading results.

http://www.themoneycosmos.com

Economist,MSc In Economics
Level II candidate in the CFA Program
http://www.themoneycosmos.com

Trading for a living, what could be a more alluring profession? The Forbes list of the 500 wealthiest people in the world is littered with names of people who have amassed huge fortunes in the world of Wall Street. Warren Buffett, George Soros, Paul Tudor Jones, James Simons, Louis Bacon, and Eddie Lampert, just to name a few. In 2007, to make the list of 100 top earners on Wall Street, you needed an income of at least $75 million! The top earners made over $1 billion!

With that in mind, it is no wonder that new traders set out to make their fortunes in the financial markets. After all, they are bombarded with advertisements and infomercials describing the next great thing in the world of trading. Starting with accounts as small as just a few thousand dollars, these traders hope to hit it big, and they seek to find that holy grail of trading systems that will lead them to the promised land of Wall Street riches.

I was one of those traders almost 15 years ago. At that time, after subscribing to a couple stock newsletters, I was bombarded with other newsletter writers, telling me they new the way to financial fortune. One service got me interested in commodity trading by sending me some spread trading strategies. These proved to be outdated and ineffective, since markets change over time. I then learned a popular trend following system, had some initial success, and then was hooked on trading. Little did I know that trading is a lot more difficult than I realized.

What I didn’t realize is that the competition in the financial markets is fierce. Wall Street is littered with MBA’s and PHD’s from the Ivy League schools. These people are groomed for Wall Street careers through summer internships at the big investment houses such as Goldman Sachs, Merrill Lynch, or even some big hedge funds. Some of these hedge funds not only hire traders, but top scientific minds from disciplines such as physics, chemistry and engineering.

In 1998 I had the opportunity to work for a hedge fund and commodity trading firm as an execution trader dealing with Asian and European markets. This firm was run by a trader who hired computer programmers that could test and research all of his ideas and then program them into automated trading models. The only orders I needed to execute were the more sizable orders so we could avoid the slippage caused by large stop orders. There were other traders and research staff that all had a hand in developing new models for the system. In spite of this, that firm eventually nearly failed and is now just a shell of itself.

Around that same time, I learned that a friend of mine from college worked for one of the biggest offshore commodity funds, and one of the most successful. He indicated that firm also had a significant number of research personnel conducting research on new trading models. Their system was also heavily automated, they had their own research platform for developing these new models.

Also in the late 1990’s I was introduced to Jaffray Woodriff of Quantitative Investment Management in Charlottesville, Virginia. We had a mutual friend that was a fraternity brother of mine at William and Mary. The first time I spoke with Jaffray, I realized that he was far more intelligent than I. He was also a computer programmer and learned how to test and develop his own trading models on his own software. He clearly had a passion for the markets and I could just tell this guy was going to make it big. At that time, he had a small trading business, but ran into some initial problems. So, he took off for Wall Street to work at an investment bank. He had some good success on the trading desk there and a few years ago, decided to start up his current business with a partner. That hedge fund now manages over $3 billion!

Now that you know how stiff the competition is, you may think twice about trying your hand at trading for a living. Can it be done? Of course it can. However, the statistics suggest that traders who start out with less than $10,000 trading futures or in the Forex currency markets will fail 90% of the time. The main reason for this is the lack of capital, but it can also be attributed to not having a coherent plan for trading.

With this in mind, new traders should follow the following process before attempting to stake their claim in the financial markets:

1. Determine the absolute highest amount of money you are willing to lose in the markets, money that if lost, will not affect your standard of living.

2. Determine what you seek to achieve in this business. What are your short term goals and long term goals?

3. Determine your monthly bills and make sure those are covered by ANOTHER source of income besides trading.

4. Figure out what type of trading suits your personality best. Are you able to withstand significant losses while waiting for significant trends to develop? Do you need to be right more often than you are wrong? Do you want to take quick small profits or wait for big trades that occur over longer periods of time? Can you pay attention to the markets with no distraction throughout the day, or do you have a real day job that requires most of your attention? Are you more interested in technical analysis or fundamental analysis? Do you like mechanical trading systems or do you like to go with your gut? When you answer these questions you can figure out whether you should focus on longer term stock trading, daytrading, short term swing trading, options trading, etc.

5. Once you figure out the trading style that suits you best, then you must conduct a good bit of research on the markets to develop your trading strategies. I recommend backtesting strategies on historical data with a program such as TradeStation. If you are able to program your own software for developing trading models, that is even better. Do not fall into the trap of just looking at the bottom line results of the models that you test. You must see how they perform on a day-to-day and month-to-month basis so that you will have an idea of the losses you can expect when trading for real.

6. Do not start trading until you are absolutely confident in the strategies you have developed. One big mistake a lot of traders make is not sticking to their plan. As soon they experience a drawdown, they give up on their strategy and try and trade a new one. As soon as they start the new one, the old one starts working. This is one reason I recommend against the purchase of black box trading systems without any knowledge of how these systems select their trades.

7. After you start trading, maintain records on how your trading. Be sure to write down the reason for initiating your trade, and the reason you exit. If you deviate from your strategy, state why, and how that deviant trade performed. In this way you will be able to keep track of what works for you and what does not.

Ultimately, you must approach trading like you would any other business or profession. It requires research, education and knowledge to succeed in this business. Many people fail, so do not assume that because you have some smarts that you can be successful. Successful trading requires careful planning, common sense, intestinal fortitude, and a little luck!

Scott Cole
http://www.kungfutrader.com

Recently I´ve come to the conclusion that the search for a forex loophole or mechanical forex trading system among traders from all walks of life has become something similar to the search for the “holy grail”. Traders from all around the globe are constantly looking for the best performing system that can make the dream of a set and forget forex trading system a reality.

Currently there is a new forex trading system that has been recently released for the forex traders to test and tell if this is finally the mechanical trading system they have been looking for all this years. The creators of the “forex loophole” insist that they have finally assembled a trading system that can deliver real results, and more important than any other thing, it can make any forex trader with a basic knowledge of how the markets work a profitable trader.

Among the characteristics of this trading system we can find these:

- ‘Set and Forget’ forex trading system

- Allows you to use Pending Orders so you don’t spend all day in front of your pc.

- You can start with Little Money

- The system works in any country and with any broker.

As you can see, things seem pretty neat with this trading system but as always, you shouldn’t take all by granted. My first recommendation for you would be to test the system in a demo account, you should never risk real money before you have completely understood how the system works and this can only be done by “paper trading” for a while so you can have a real feeling on the kind of system you have in your hands.

Me second recommendation comes linked to the previous one. Read and fully understand how the system works in your computer. Use customer service if you need to. Many times you have acquired a great forex trading system indeed but the simple fact of not fully reading the instructions of your trading software and platform may transform a great system into a useless piece of software catching dust in your hard disk.

So, is the forex loophole the final and ultimate system traders have been looking for? Maybe it is, perhaps not 100% the “holy grail” of forex trading but from all its characteristics and by being objective it´s, first of all, a mechanical system that works with all currencies (something you won´t find easily) and considering it stands for 80% of what it promises I could surely say that this system comes really close to the ideal “set and forget” forex trading system.

Forex Trading can be highly profitable. You can work from anywhere and still make a very good income. You just need to know the basics and have a good trading system. If you want to start with the right foot, consider using this great Forex Trading System