StephanFX - Forex Trading

Friday, August 04, 2006

Forex Trading – Why trade Forex?

This is a question that has been asked to me by so many people that I lost count over the years. Living in South Africa, I am sure we were the last people to see and realize the potential of online currency trading, or FOREX.

The first that I heard about forex was when I was 19 years old and my father was the one that was contacted by a friend who wanted to interest him in trading. Well my father has the computer technical skills of a tortoise, and though he can install and uninstall windows, about the internet and everything else he knows nothing. So, my father said that I should be the one that goes on the course and that is when my blood went through the roof. Not because of anger but of excitement.

My first trading course cost me all of R15000.00 (roughly $5000.00 at that time) and although I had everything in place to start trading I did not have the start-up capital.

So I disappeared from the forex trading scene for about 5 years, and then my one friend, who also went on the course and couldn’t start either because of capital problems, told me that some brokers are now offering mini trading accounts where you can start from as little as $300.00. This was great news but now I live in my own apartment and unfortunately the capital is still short. Why, because it is a rule, “NEVER TRADE WITH MONEY YOU CANNOT AFFORD TO LOSE!!!” Thus I am still on my demo and steadily building up revenue and savings to get in. It has been three years since my friend gave me the news and I am still accruing the funds to start, but this does not mean that as soon as I start that things will go south. I have been practicing my behind of and I have come upon some strategies and techniques that I found are SIMPLE and EFFECTIVE.

With the history lesson behind us, back to the question, Why trade forex? Well, it is simple if you look at the facts. It is a very volatile market trading everyday in excess of several TRILLION. You can also make my in both directions, thus making it recession proofJ. It is also a predominantly a trending market meaning that with a solid strategy and unemotional trading psychology , any person with the aforementioned will have a good chance of taking consistent profit from this market.

After that short paragraph, I asked myself “Why can’t I have a piece of that pie? I don’t want a million, just enough to get home and by my fiancée a nice gift then and again.”

That is then where I started, and that is exactly why one should at least demo trade the forex market.

Trade Well, Live Prosper.

Thursday, August 03, 2006

Forex Trading Eduction – The RSI ( Relative Strength Indicator)

Today in my forex trading lesson, I would like to talk about the RSI (Relative Strength Indicator), but more so about how you can use it in your trading arsenal.

Me personally, I like the RSI because I use it for one thing and that is trend reversal. This is one of the most powerful indicators for trend reversal in my opinion, though it can make mistakes. The way to see a trend reversal in the RSI is in the DIVERGENCE between the price and the RSI, meaning that the price made a higher high (in an up trend) BUT the RSI made a lower high, classic divergence. This strategy is more powerful alongside a MACD, when the MACD also shows divergence along with the RSI. In the image below, taken 02 Aug 2006 5min chart, you can see what I mean:


Notice that both the macd and rsi are in divergence with the price and then continues to drop a nice 60 pips. In using my trading method I would have made about 40 pips before exiting.

Well, this is a short and sweet explanation of the RSI and it is not nearly complete but it is here to get you started with something.

Trade Well, Live Prosper.

Tuesday, August 01, 2006

Forex Strategies Exposed

Hi guys,

Unfortunately i was unable to trade for a week or three, seeing as it got me into big doodoo at work. I would like to take you through the following:

Rapid forex
Surefire Forex

These 2 methods are as they incredible, but i must add that i cannot really vouch for these strategies, because I can't really effectively trade these forext strategies to the effect of making any cash. I can say that I have read through both strategies completely and looked at some chart to back check for oppertunities and resluts. WOW! that is all that I am going to say.