FAQ NO4: What type of people Become Traders

With  the rise of the internet You, Me, Him, Her, Young, Old  abousoulty anyone who has the right mental strenght,determination, persistance, passion to succeed, can become an online day trader.

This person has an undying faith and belief in their own ability, he she accepts that most things that went wrong were probably outside of their control, because they planned their work. Their brutal honesty with themselves and with others allowed them to develop a faith in their own ability that was beyond the norm.

This person is humble, and understood that they were not smarter, stronger, nor wiser than others; they just knew that there were few others that had more faith in their own ability to follow something through and to achieve their goals.

They had faith that they could get it done, and humility to accept defeat; that is what defines them, and usually defines any great trader.

Successful traders have a plan that they refine, develop and test, and debrief on a daily basis. They share their plan as a work in motion, and not as the Holy Grail. A successful trader accepts that there is always something new to learn, and however good the plan is today, there will be the chance to improve it tomorrow.

FAQ No3: What are Candle sticks

Candlestick Charting: What Is It?

The candlestick techniques we use today originated in the style of technical charting used by the Japanese for over 100 years before the West developed the bar and point-and-figure analysis systems. In the 1700s, a Japanese man named Homma, a trader in the futures market, discovered that, although there was a link between price and the supply and demand of rice, the markets were strongly influenced by the emotions of traders. He understood that when emotions played into the equation, a vast difference between the value and the price of rice occurred. This difference between the value and the price is as applicable to stocks today as it was to rice in Japan centuries ago. The principles established by Homma are the basis for the candlestick chart analysis, which is used to measure market emotions surrounding a stock.

Candlestick ComponentsWhen first looking at a candlestick chart, the student of the more common bar charts may be confused; however, just like a bar chart, the daily candlestick line contains the market's open, high, low and close of a specific day. Now this is where the system takes on a whole new look: the candlestick has a wide part, which is called the "real body". This real body represents the range between the open and close of that day's trading. When the real body is filled in or black, it means the close was lower than the open. If the real body is empty, it means the opposite: the close was higher than the open.

Just above and below the real body are the "shadows". Chartists have always thought of these as the wicks of the candle, and it is the shadows that show the high and low prices of that day's trading. If the upper shadow on the filled-in body is short, it indicates that the open that day was closer to the high of the day. A short upper shadow on a white or unfilled body dictates that the close was near the high. The relationship between the day's open, high, low and close determines the look of the daily candlestick. Real bodies can be either long or short and either black or white. Shadows can also be either long or short. 

Basic Candlestick PatternsIn the chart below of EBAY, you see the "long black body" or "long black line". The long black line represents a bearish period in the marketplace. During the trading session, the price of the stock was up and down in a wide range and it opened near the high and closed near the low of the day.

By representing a bullish period, the "long white body", or "long white line"-(in the EBAY chart below, the white is actually gray because of the white background) is the exact opposite of the long black line. Prices were all over the map during the day, but the stock opened near the low of the day and closed near the high.

Spinning tops are very small bodies and can be either black or white. This pattern shows a very tight trading range between the open and the close, and it is considered somewhat neutral.

Doji lines illustrate periods in which the opening and closing prices for the period are very close or exactly the same. You will also notice that, when you start to look deep into candlestick patterns, the length of the shadows can vary.
 

 http://www.investopedia.com/articles/technical/02/121702.asp

FAQ No1: About the Foreign Exchange

Forex is the world's most traded market, open 24 hours a day. It is an over-the-counter market (which means that it is decentralised with no central exchange) for trading currencies.

Forex is also known as foreign exchange, FX, or the currency market. Currencies trade in pairs, like the Australia dollar versus the US dollar (AUD/USD) or the US dollar versus the Japanese Yen (USD/JPY).(GBP/USD).(EUR/GBP)

Forex trading is used to speculate on the relative strength of one currency against another. For example in a forex trade, you 'buy' if you think the first-named currency in the quoted pair is going to strengthen against the second-named one, and you 'sell' if you think the first-named currency is going to weaken.

How do I read Currency

Base currency: The base currency is the first currency in a currency pair, and the currency that remains constant when determining a currency pair's price. The United States Dollar (USD) and the European Union Euro(EUR) are the dominant base currencies in terms of daily traded volume in the foreign exchange market. The British Pound (GBP), also called sterling, is the third ranking base currency. The USD based pairs are USD/JPY, USD/CHF and USD/CAD; the Euro based pairs are EUR/USD, EUR/JPY, EUR/GBP, and EUR/CHF. The GBP is the base for GBP/USD and GBP/JPY. The Australian Dollar (AUD) is its own base against the USD (AUD/USD).
So if prices are going up or down look at the base currency first.

FOREIGN CURRENCY SYMBOLS

Currencies, like equities, have their own symbols that distinguish one from another. Since currencies are quoted in terms of the value of one against the value of another, a currency pair includes the "name" for both currencies, separated by a "/". The "name" is a three letter acronym. The first two letters are in most cases reserved for identification of the country. The last letter is the first letter of the unit of currency for that country.

For example,

USD = United States Dollar

GBP = Great Britain Pound

JPY = Japanese Yen

CAD = Canadian Dollar

CHF = Confederatio Helvetica (Latin for Swiss Confederation) Franc

NZD = New Zealand Dollar

AUD = Australian Dollar

NOK = Norwegian Krona

SEK = Swedish Krona

Since the European Euro has no specific country attached to it, it goes simply by the acronym EUR.

By combining one currency, EUR, with another USD, you create a currency pair EUR/USD.

THE VALUE OF CURRENCIES

The base currency is ALWAYS equal to one of the currency's monetary unit of exchange (i.e., 1 Euro, 1 Pound, and 1 Dollar). When an investor buys 100,000 EUR/USD, he is said to be buying (or receiving) the EURO or the Base Currency and selling (or paying for) the USD or Counter Currency. The amount of the Base Currency he is buying is equal to 100,000 Euros. Note that this is true no matter the current exchange rate at the time. The base currency amount remains constant.

The Counter Currency equivalent amount that the investor is selling (or paying), on the other hand, will fluctuate with the exchange rate for the Currency Pair. It is equal to:

(Amount of Base Currency x Market Foreign Exchange Rate)

Since the Counter Currency is the part of the currency pair that fluctuates higher or lower, it determines the strength or weakness of both currencies in a currency pair. As one currency goes up, the other must go down.

Currencies trade in fractions of a full unit. The smallest fraction is called a "pip". Currencies trade in pips because exchanges of currencies for speculative reasons are generally for large amounts. This is because of the leverage that is available when trading Foreign Exchange.

FXDD provides a Maximum Trading Leverage Ratio of 100:1for standard accounts. At that ratio, a 100,000 EUR position would require $1,200 of Margin at an exchange rate of 1.2000. This is calculated by taking the US$ equivalent of 100,000 EUR or US$120,000 and dividing by the 100:1 leverage ratio.

Margin Required = $120,000 / 100 = $1,200

To determine the value of a pip for the deal above the following calculation would be made:

Value in US$ = 1.20 x Par Amount of Base Currency = $120,000

Value in US$ + a pip = (1.20+.0001) x Par Amount of Base Currency = $120,000

The value of a pip in dollars is equal to $120,000 - $119,990 or $10.

When a currency pair goes from a low price to a higher price, the Base Currency is said to have strengthened or gotten stronger. The converse is true for the Counter Currency. That is, it has weakened or gotten weaker as the Base Currency has gotten stronger.

Since Exchange Rates represent what a fixed amount of currency is equal to in terms of another currency, we have seen there is just one price for the Currency Pair. The movement of that price determines whether a currency is getting stronger or weaker.

If the EUR/USD exchange rate goes from 1.2000 to 1.2024, we have concluded that the EUR got stronger, the USD weaker. Why?

When looking at Foreign Exchange Rates (or prices) an action to Buy the Currency Pair implies buying the Base Currency, or EUR, and selling the Counter Currency, or USD. If the EUR/USD exchange rate moves higher, as expected, the trader can now sell the EUR/USD at a dearer/higher price. The difference represents a Profit to the trader that was Long, or who bought the EUR/USD Currency Pair.

Another way of looking at it is at 1.2000, an investor/trader could exchange 1 EUR for $1.20. At 1.2100, however, that same single EUR can now be exchanged for a higher amount of USD, in this case $1.21 USD. The EUR has strengthened or gotten stronger.

TRANSACTING FOREIGN EXCHANGE FUNDAMENTALS

BUYING AND SELLING FOREIGN EXCHANGE

What exactly do you buy or sell when you make a foreign currency transaction?

In reality, you are doing both actions - buying and selling. A transaction of Buying the EUR/USD at 1.2000 is actually buying the Euro and selling the Dollars at 1.2000 cents. If the Euro increases in value in relation to the dollar, the price would increase and the investor will make money.

If for whatever reason, a trader could not execute an order using FXDD, a verbal order to a broker could be the following:

"I buy 100,000 Euros and sell the dollar at the Market"
or
"I buy 500,000 EUR/USD on a 1.2100 stop"
or
"I buy 100,000 Euros vs. the Dollar at the market"

What is required on all verbal orders is the amount, the Currency Pair, the rate and/or the type of order. Simply saying "I buy the Dollar at the Market" is not good enough as it does not say what currency the trader wants to sell.

THE BID/ASK PRICE

Like equities, foreign exchange has a Bid price and an Ask price. The bid is where the market maker will buy. The ask is where the market maker will sell. For investors, the reverse is true. The bid price is where an investor can sell, while the ask is where an investor can buy.

The bid price is always less than the ask price. This makes logical sense as a market maker, like any investor, wants to buy low and sell high.

The spread between the bid and the ask is called the Bid/Ask Spread or Dealing Spread. The bid/ask spread is the premium that market makers charge to provide constant liquidity to a retail client base. For example, the bid and ask might be 1.2050/1.2055. The spread is 5 pips.

Paralleling foreign exchange trading to equities, a market maker, like FXDD, is the equivalent of a specialist on the floor of the exchange.

A specialist is always willing and able to make a market (i.e. provide liquidity) to the market/investor. For this service, he will have a bid where he buys the stock and an offer or ask, where he will sell the stock. The bid/ask spread the specialist charges will fluctuate with the general liquidity of the underlying stock.

That same principle applies to FXDD's Bid/Ask Spreads.

Dealing Spreads for the major currencies pairs on FXDD are 2-3 pips wide. Some less liquid currencies will be a bit wider. This reflects the relative liquidity/risk in the professional market for that particular currency pair. The dealing spreads that we quote reflect a normal market making spread given the risks we take and the costs we incur for servicing our clients' business.

Obviously, if the volatility and risk of making a market increase because the markets become less liquid, it stands to reason that our spreads will increase as well. These are universal realities of market makers and should not come as a surprise to knowing investors/traders.

FAQ No2: What are the most commonly traded currencies in the FX markets? And when is the FX market open for trading?

FX available  24 hours daily from 22.00 Sunday to 22.00 Friday. These times may vary on market holidays and where daylight savings time applies.

Times shown are London time unless otherwise specified.
A true 24-hour market from Sunday 5:00 PM ET to Friday 5:00 PM ET, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, then London, and New York. Unlike many other financial markets, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or

The most often traded or 'liquid' currencies are those of countries with stable governments, respected central banks, and low inflation. Today, over 85% of all daily transactions involve trading of the major currencies, which include the US Dollar (USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD), and the Australian Dollar (AUD). 

Put that in the back of the net

Goals help individuals to direct it towards achievement
Goals encourage strategies to ensure achievement
Goals help build assistance required for achievement
Goals encourage new learning strategies to ensure achievement
Goals that are more specific are more achievable than generalized goals (.eg to be the best , or to be good)
Goals are within the individual's control and thus are flexible
Goals set more realistic expectations resulting in less anxiety and more motivation and thus enhanced performance.

Goals Should be:
Specific, Measurable, Behavioural
Challenging but realistic

Explicit goals are far superior to general non-specific goals, such as 'must do the better'
The more difficult the goal the better the performance but unrealistic goals beyond the individual ability leads to frustration and failure. Consequently goals must be difficult  enough to challenge but realistic enough to be possible

Eur Raises as Ireland denies bailout talk

Fail to plan Plan to fail.

Zig Ziegler says; "You are working with no plan? Why? Working without a plan is about as difficult as trying to come back from somewhere that you have never been". You will become profitable if you achieve success, but success rarely comes without a plan.

Success is not counted in cash; success starts with an inner faith, the ability to listen, and in having a plan. However, financial freedom only comes by following the plan.