A New Forex Trader's Journey to Success

The six stages of a developing trader are looked at below.

Stage One: The Clueless Trader
This is the first stage when you enter trading. You may have picked up a book on technical analysis somewhere, heard of a day trader making millions, or got lucky in an earlier stock investment. After all, how hard can it be? The money sounds appealing and the freedom to be independent sounds attractive.

I don't mean to shatter anybody's dream but those who succeed in trading are the minority! Approximately 90-95% traders lose money. This is the cold hard facts. In the first stage, every trader is optimistic. You open a direct access brokerage account and the sound of Level II, ask/bid, and market makers make trading sound like hi-tech video game.
In reality you have no clue. You will buy just to see the market reverse and you will short just as the market starts to rally. Most of your trades are done emotionally. You buy just because the markets feel strong without any logical reason. You are in the unconscious incompetence stage. You have no clue how the mechanics and psychology of trading works. What's worse? You are not aware that you don't know. Most traders will blow their entire account at this stage.

Stage Two: The Rookie Trader

In this stage you have lost enough money to realize what you are doing is completely wrong. In other words, you start to realize that you don't know. You will then devour every trading book available. You will study and purchase Technical Analysis of Stock Trends by Edwards and Magee believing price patterns are the Holy Grail. You will memorize every technical pattern known to man.
You will read about the ADX, moving averages, Fibonacci lines, pivot points, MACD, Bollinger Bands, channels, etc... You will go through the "help" tab on your data vendor to read about every single technical indicator available. You will plot them on your charts and spend hours looking for an indicator that works. You will be extra confident now because think you have found the magical technical indicator.

Yet, you still continue to lose money everyday. You realize that your indicators are lagging and that every other new trader is probably looking at the same thing. You realize that you are the sucker.

Stage Three: The Developing Trader
You start to realize the amount of work required and the immense learning curve that you must overcome to understand the markets. At this point, traders may find it overwhelming and quit. Stronger minded traders will push their motivation harder to start their second spurt for knowledge. Hunger and passion is needed to clear this stage. You will look for reference online, join mentor programs, chat rooms, and seminars.

You realize the necessary elements needed to develop as a trader. You will ask a thousand questions and bug every professional trader you meet. You will read a thousand day trading articles. You will start paper trading, develop strategies and setups, and define risk parameters for every trade.
You will go on a hunt for self-understanding to master your psychological game. You will visualize every possibility on a trade before you take it. This is the true learning phase. You are trying hard to develop your edge in trading.

Stage Four: The Determined Trader
This is the stage in which you learn to specialize in certain markets and trading methods. Without realizing it, you have finally found your style of trading after hours of hard work and research. You stick to your method and you improve it.
You realize that you need an edge whether its tape reading or being a Fibonacci expert. The important thing is you are slowly transforming yourself into a specialized trader. You test your methods and they seem to work. You gain tremendous market knowledge. You reflect back on yourself and you can't help but laugh at your foolishness.

Although you have not made enough money to call yourself successful you are proud of your journey and accomplishments. You realize that the Holy Grail is not about technical indicators or price patterns. You calculate risk before profits and place strict money management on all your trades. You cut losses short and learn to scale out on your winners.
You start accept losing as a natural part of the game. You take high probability trades that you have tested and feel confident about your setups because you understand that trading is a game of probabilities. Your psychological makeup has changed from an amateur mindset to a professional one.

Step Five: The Consistent Trader
You rely on your trading method and start taking trades systematically. You try to aim for consistency and are meeting your daily goals often. You have reached the conscious competence stage. You are fully aware of your strengths and weaknesses as a trader. At times you feel euphoric and at times you feel pain. But you are able to understand your own psychological makeup to control your emotional swings. You are now able to trade for a living.

Step Six: The Expert Trader
In this final stage, you completely understand the markets you are trading. Being involved in it everyday you are aware of every key price level. You understand market concept and are able to predict the direction of the markets a fairly good amount of time. You pat yourself on your back and take profits as soon as you feel euphoric.
You do this because you understand euphoria is the same as emotional trading. You talk to other traders and realize the development stage they are in. People start asking you for trading advice, you publish a book, and you have a specific trading methodology that represents you!

Taking trades come naturally and you are able to get in and out at the precise price levels based on tape. Instead of having the markets take your stop out, you exit when you know you are wrong. You keep your head high but remain humble on the inside. You have now officially graduated the school of the hard knocks.

Entering the trading profession can be a tough journey for many people. Trading is one of the toughest careers that you can choose. If you enjoy the challenge, you will definitely enjoy the feeling of accomplishment. Trading is 30% mechanical and 170% psychological. 200% is required to become a successful trader. Good luck and best of trading.

About the author

James Lee is a full-time day trader specializing in the mini-sized Dow futures. His core trading strategy is based on pivot point clusters and Market Profile.

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Forex PC Security – Preventative Measures

My last article, the Hardware Guide, covered the basic requirements for a capable, reliable hardware setup to trade the markets effectively. Some of you may also be aware of my Techies Corner Guide, which provides some basic information about PC security, and links to a variety of downloadable programs and tests to use for the security-conscious amongst us. Some of the information in both may be duplicated here, but this article brings everything together as a "one-stop shop", and provides a valuable reference point for future use.

There are many problems that we, as internet-intensive users can come across during our daily work. Most of us use ADSL connections, and whilst this type of connection is more often than not essential for our business, it also exposes us to the not-so-friendly side of the internet.

Some of the common problems you will no doubt have encountered will include:

* Viruses
* Spyware
* Trojan Horses
* Firewall attacks
* Spoof websites

If you aren't familiar with all of the above items, you should be. As traders, we cannot afford to show any complacency when dealing with these malicious individuals who write and develop such programs - cut them off at the knees, or better still, don't give them a chance in the first place.
Viruses

Most people (if not everyone) ought to be familiar with viruses. Put simply, a virus is any program which self-replicates and spreads by placing copies of itself into other computer code or documents/programs. Some viruses are harmless, whilst others can destroy your system, delete files, and disable hardware. In short, if you find them on your system, get rid of them.

There are plenty of anti-virus (AV) programs around, as you are no doubt aware. Many are free, others involve an annual fee. Some of the most popular free ones, available for download by either free registration or just a straight link, are listed below.
Some products are standalone, and require download, others are accessible through a web interface. However, if you're a Windows XP user, XP monitors your AV product by default and will constantly remind you that either a) you don't have one installed or b) the virus definitions are out of date. You can turn this function off if required by accessing Start -- Control Panel -- Security Centre.

Its worth finding out how effective your proposed or current AV solution is. There are a number of reports frequently published on the web which test the more popular solutions on a variety of platforms and show results. Two good examples are Virus Bulletin and About.

Free AV Programs (standalone)
* Avast! Anti Virus
* AVG 7.0 Anti-Virus
* AntiVir

Free AV Scanners (web based)
* McAfee Freescan
* RAV AntiVirus

If you opt for a standalone version (the best choice, in my opinion), make sure you either update it regularly yourself, or configure the program to check for updates once a day. I say that standalone is best because some AV programs will actively scan the PC the whole time, even if you have not asked it to manually scan for viruses. Avast! is one such program which has in the past alerted me to a problem before I had run a manual scan.

You should only run one AV product on your PC. More often than not, AV products will use the same files and resources as one another, and trying to get two to work concurrently can cause problems - so keep it simple.

Spyware
Sometimes called Adware, this is a generic term for any program that monitors a user's activity. Again, like viruses, they can be quite harmless or cause a great many problems. Sometimes, the same form of spyware will have one effect on one machine, and another effect on another. There are no hard and fast rules, except for the one about getting rid of them from your system.

The most harmless form of spyware is probably the tracking cookie. This is a piece of code placed on your computer by your web browser and used by a website to record information about you. Some cookies, such as the ones this site uses, can - at your request - remember such details as your username and password, logging you in automatically whenever you return. Others are can record the kind of sites that you visit for demographic purposes - i.e. visitors to site "a" also visit sites "d", "k" and "m".

Other types of spyware can be more malicious, particularly those that incorporate ActiveX script. ActiveX is a technology developed by Microsoft to enable web pages to behave like programs - the exploitable element of this being that they can install programs onto your PC without your knowledge. Microsoft have gone some way to fixing this with the release of Windows XP Service Pack 2.

Some browsers are more susceptible to Spyware than others. The most popular browser, Internet Explorer (with around 90% of the marketplace) ships as default on all Windows-equipped machines and as such is the browser most regularly targeted by Spyware developers. Other browsers, such is Mozilla Firefox, an open source browser, offers enhanced security over IE but at occasional small expense, in that not all websites are yet Mozilla compatible, but they'll typically tell you so (or you'll realize when you visit the site).

The next version of Internet Explorer, IE7, rumoured to be with us in beta format later in 2005, is going to be primarily focused on security, which suggests that Microsoft is well aware all is not well with IE6 - a feeling backed up by the numbers of users switching to products like Mozilla.

Some of the more popular free and pay-for solutions are listed below. This is not intended to be an exhaustive list, and it is worth reading the various reviews available on the web and in PC magazines. Some anti-spyware programs perform poorly, and others will even install spyware on your machine - read about it here.

Free Anti-Spyware Programs
* Microsoft AntiSpyware (Beta Version until July '05, Win XP only)
* Ad-Aware
* Spybot Search & Destroy
* Spyware Blaster

Pay Spyware Programs
* Pest Patrol

Like Viruses, make sure that whatever Spyware solution you choose is kept regularly updated. Most, if not all, will prompt you for updates when you run them. However, unlike AV products, you can run more than one instance of anti-spyware products on your machine, as no one solution has yet been found that is a catch-all.

Trojan Horses
Like the wooden horse of Troy, a trojan is a program which arrives on your PC and, should you stumble across it, often looks quite innocent. They will either sit there and apparently do nothing, whilst quietly monitoring away - much like Spyware - or, on a pre-defined date and time, will perform some action - such as erasing files, logging and sending keystrokes for password retrieval purposes, and things like that. They are not classed as viruses as they do not replicate themselves, although some of their actions are virus-like.

Trojans are detected by most AV and/or Spyware products, and should be dealt with by the same programs as above. Like Spyware and Viruses, the best solution is to regularly scan your PC (at least once a week if you are a heavy user of the internet) and deal with any threats immediately.

Firewall Attacks
I'm hoping that no-one who has read this far is wondering what a firewall is. If you're reading this, that means you're on the internet, and that means you need a firewall. Even those of you who are on dial-up.

A firewall can be either a piece of software installed on your PC, or part of a hardware element (such as a router) that protects network traffic. They contain a set of programs that follow user-defined rules as to what is and what is not allowed access to and from your PC.

Many of us who use Windows XP as our Operating System will have a software firewall installed as standard. However, it is well known that the default Windows XP firewall, whilst effective at blocking inbound traffic, is quite useless at blocking outbound traffic, and some programs can actually turn it off (Huitema, ITPro ). This, of course, can prove problematic should you inadvertently download or receive a file that is malicious, because it will sit there, perhaps transmitting passwords and keystrokes through your firewall without your knowledge.

It is worth getting a third-party firewall such as Sygate or ZoneAlarm to ensure that the security of your system is not compromised (again, both are available in either free or pay-for format, depending on your use) . If you have a router, either wired or wireless, it will have a firewall built in which should prevent most problems.

Free Firewalls
* ZoneAlarm
* Sygate

You can test the effectiveness of your firewall at a few well-established locations on the web. Just click the link, follow the on-screen instructions and within a minute or two you should have some idea as to how secure (or preferably, invisible) you are on the web.

* Gibson Research (Follow the links for "Shields Up!")
* AuditMyPC
* Symantec Security Check

It is also worth visiting websites such as PCPitstop on a regular basis. Here, you can register for free, and have the website perform a free scan and offer potential tune-up tips for the machine in general and advise you about security settings.

Spoof Websites
Also known as "phishing", these will typically appear in your inbox, prompting you to visit a site purporting to be owned by your bank, or Ebay, or Paypal, to tell you that they are "updating their records, and could you please log in to verify them" - or some such. Of course, you click on the link provided in the email, which takes you to the site that it is alleged to come from. You log in, put in your details, and maybe think no more of it. But there's a problem.

Lets say that the site you get the email from is PayPal, Ebay's payment method. Or at least you think its PayPal. But its not - I promise you.

What it is, in fact, is a copy of the PayPal site. This is relatively easy to do. You could copy the entire page of this website, for example, by viewing the source code, and placing it on another site somewhere else. It would look the same, sure - but it won't function the same because the content that creates this page and a lot of web pages is dynamic - pulled from a remote database - and wouldn't be there.
But you get the point - it is simple enough to copy an entire website and fool people into thinking that its the real thing. So, you go along, think you've logged in - but what you've actually done is send your username, password and who knows what else to a database elsewhere, for someone to retrieve at leisure, log in to your accounts, and clean them out.

There are a couple of things we can do to stop this.

First of all, when you visit a site such as PayPal, Ebay or maybe your online bank, just check the actual HTTP header in the browser. Make sure that the address is correct. For example, for Ebay it should say something like : http://www.ebay.co.uk/.
If it says anything different, manually type the address into the browser or take it from your "favourites" list and use that. Don't click the link they they send you and think that it is OK just because it looks right. It can say one thing and mean something else.

Another thing to check for is the encryption. All sites such as those mentioned above use a technology called SSL (Secure Sockets Layer) and 128-bit encryption to protect your identity. Hence, when you go to log in at, for example, Ebay, you should see something like: https://signin.ebay.co.uk/ws/...... Note the trailing "s" after HTTP.
This denotes that it is a secure web page. As does the small padlock symbol that all browsers should display in the bottom right-hand corner. Without all of these, don't even try to log in, because you're not where you think you are. If you aren't familiar with this, try the following:

Open a web browser, and type "http://www.paypal.com" into the address line. After a few seconds, the site will come up. However, you'll note that the address you typed in has changed to "https://www.paypal.com", and the padlock symbol should display in the corner of the browser. This is what you need to look for to make sure you're on the site you think you are, and not somewhere else.

Some browsers, such as Mozilla, offer add-on extensions (in Mozilla's case called "spoofstick") that will automatically tell you the correct address of a website, regardless of what it displayed in the actual address bar.

A lot of sites that have either been phished or may be subject to phishing will often send genuine emails to their customers saying that they will never ask you to log in and verify your details. Trust them. If you follow the simple points laid out above, you can establish very quickly whether you are on the genuine item or a good copy.

In Conclusion
To summarize the above, as an active trader there are a few things that are absolute "must-haves".

1. A decent, up-to-date AntiVirus package.
2. One or more AntiSpyware products.
3. A good software or hardware firewall, properly configured and regularly tested.

Finally, you need to know your PC - know how it should perform, know the kind of things it should do. If your software firewall prompts you to allow a program access that you've previously allowed access, is it because that program has become infected with a trojan, and hence changed?
Or did you reconfigure it somehow? If the PC has started performing poorly, or you've lost functionality somewhere, the first thing to do is test it to death and back - the number of PC problems that are easily solved this way is astounding.

For thorough scans of both Spyware and Viruses, try running the PC in Safe Mode. To do this, hit F8 as the manufacturer's logo appears on screen, and then choose "Safe Mode" from the on-screen prompts. This will start Windows with the minimum amount of drivers required, so you won't have internet access, but it will perform scans faster because there are less resources running. It can also be easier to delete infected files because they may not yet be loaded into memory and hence be inaccessible.

By following the above suggestions, you should be able to keep your PC in tip-top shape, and help prevent spreading malicious files to colleagues and friends. Most of it is common sense, and if you follow the guidelines that the various software packages give you, there's nothing dreadful you can really do.
Remember too that if you're using Windows XP, Vista, Window7/8, you also have a System Restore function available off the Start Menu that can often undo any problems, even if you've caused them yourself.

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Forex market – structure and moves – how it varies from other financial markets

Forex or currency market is a 24 hrs market - it is different from other markets like: commodity, stock and debt. Here the traders participate from different countries during different timings.
Besides, the market volumes also show big variations, which leads to bigger moves which may be in tandem with the expectations of the traders or against. This market follow data release time, news and rumors like other markets but the moves are basically USD weakening or gaining moves. Besides other stretched moves will also be seen when the volatility happens in currency crosses.

There are 3 sessions the market show active moves, namely Japanese (00:30-07:30 GMT), European (08:00-14:00 GMT) and US sessions (14:30-21:30 GMT). In between sessions there are gap times where in false moves will be seen prior to the sessions. There is shift in sessions during day light saving timings.



USD is considered as the main major and EURO, GBP, CHF and YEN are considered as other majors. They are traded against USD and are called major pairs – EURO/USD, GBP/USD, USD/CHF and USD/YEN.
CAD and AUD are called commodity pairs as their moves are suppose to be dependent on demand and supply of commodity market. Other majors are traded against each other also and are called crosses – EURO/GBP, EURO/CHF, GBP/CHF (European crosses) and EURO/YEN, GBP/YEN and CHF/YEN (Yen crosses).



The rates are derived ratios of the pairs and are given up to the 4th decimals. E.g. EURO/USD when shown as 1.3020 – it means for 1 EURO 1.3020 USD will be equivalent. This ratio keeps changing in the 4th decimal level and is called pip. When a position is taken in the market – say 1 lot in standard forex account means $100,000 position and the used margin to be provided is $500 – this is called 1:200 leverage.

Planning forex day trading

The currency pairs normally make volatiles moves. To decide on the entry and exit we need to watch the market for 30 min from the start of any session and if it is near low and not cut the low for more than 30 min we can take a buy position and if seen near high we can take sell position with 30 pips hedging order or stop. Hedging refers to taking the opposite position in the same pair without off setting the original position.

Once the position makes profit of 30 pips then remove the hedging order and keep stop at entry to eliminate the risk of loss. Then change the stop status to trailing stop maintaining 30 pips from market or manually trail the stop.
Keep 75 pips limit for the market to close the position either with limit or the trailing stop to protect profit. In case the hedge order is filled, watch the market for 30 min and if the hedging makes loss, then understand it was filled during stop hunt move of the market and cut the hedging position with a small loss and keep another hedging order 30 pips away from the market and trail to the original hedged level when the market moves in your favor – it is a trading strategy to limit the risk in any market condition.

Basic trading rules

1. Take positions only for less than 10% of the equity to avoid over trading and margin call.
2. Keep away greed and fear and trade at ease with the view that market means swings and it keeps giving good trading opportunities
3. Never chase and take positions – buy during quick rise or sell during quick fall, they are trap moves the market make before the reversals.
4. Limit the trades to the time available for trading- never market it stressful- because we come to the market with the objective to earn and improve the lifestyle.
5. Equity management in the earning process is very important rather than the imaginations of whether the market will rise or drop.
6. Use other analysts’ calls as tools for your market study- don’t depend on them as they can misguide at times of reversal moves.
7. Take very less positions at a time to minimize the risk and maximize the profit. Act like a professional - accept when the loss is minimal and maximize when the profit is good using trading strategies.
8. Visualize and plan well before hand how you handle the positions when the market moves in your favor or against. Don’t become stunned when the market moves against.
9. Try to read the market moves, its limitations and advantages to decide upon your trading.
10. Don’t become addict to trading, trade only when good opportunity is seen in the market.

About the author
Dr.S.Sivaraman is the head trader of I-knowindices.

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Why You Should be Trading Currencies

Last night, China's stock market plunged a whopping 9%, causing a chain reaction throughout Asia, Europe, and this morning, New York.

Major players (institutional money) began selling as the market opened. Before long, the Dow was on its way down. If you were caught in today's stock market sell-off, your long positions would have averaged healthy losses across the board. Very few stocks were left unscathed.

Not a pretty sight. Some folks will be licking their wounds for months to come. In short, a great many traders, including professionals, panicked at the news, with temporary but devastating results.

In contrast, for the most part it was business as usual for the Forex.

You may have heard that currencies are highly sensitive to the news, and that is true. However, that "news" almost always comes in the form of scheduled economic reports, and a given report usually affects only a small group of currencies. For example, the Bank of England Interest Rate Statement will impact on the British Pound (GBP), causing its cross-currency pairs, Pound/Dollar, Euro/Pound, and Pound/Yen to react to a greater or lesser degree.

The thing is, economic report calendars are available all over the Internet, and almost all Forex traders are familiar with them. Thus, they can plan ahead for "news" that may impact their current positions. They can even plan NOT to trade during the time a news report is scheduled for release. Or, they can plan to trade a currency pair's reaction to the report. In other words, the only thing that is "news" is the difference between the numbers anticipated by the experts and the actual numbers released in the report.

Although most currencies were affected, the currency most strongly influenced by China's stock market debacle was the Japanese Yen, which strengthened against all of its cross currencies, Aussie Dollar/Yen, Swiss/Yen, Euro/Yen, Pound/Yen, and Dollar/Yen.

If you had been trading with Forex Profit Pro, as you will soon see, you would not have been in a long position last night, and you would have been set up for or already in a short position in any or all of those currency pairs (see the chart below).

I would like to illustrate this fact with a true story.

Liesel, our client services manager, began paper trading with Forex Profit Pro in July of 2006. By October, she felt she was ready to go live, and opened a small mini account. She has been trading live for about four months now, and has done remarkably well (She has more than tripled her original account size: not bad for a beginner, eh?).

Let's take a look at how she did with her Pound/Yen (GBP/JPY) trade that began last night (2/26/07) at around 23:00 EST, and ended today (2/27/07) at around 15:00 EST. For your convenience in following the trade, the numbers in the notes correspond to the numbers on the chart.

1. Any long trade would have been exited by this point,
2. leaving only sell signals as the logical choice.
3. Liesel entered this trade at 236.22,
4. To preserve profit toward the end of her trade, Liesel tightened her stop loss to 30 pips, and stopped out at 231.30.
5. Her total gain on this trade was 492 pips.

Congratulations, Liesel, on a great trade!



Forex Profit Pro Software

• EASY enough for a complete newbie to learn the basics in an hour
  
• PRECISE entry, exit and stop loss signals
  
• Live Streaming Data
  
• Market Tested and Proven Profitable
  
• Can be used with any dealer/broker
  
• Instantly downloadable

Ken Herbert
CEO, Quantum Research Management Group

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Can you become a Forex Introducing Broker?

Any individual or company that has contacts with individuals or other companies who might be interested in trading forex online, either by themselves or through a forex broker can become a forex Introducing Broker.

Below are some typical examples of companies that can become successful forex Introducing Brokers (IBs). This list is not exhaustive, so if you don't see a description of your company type or your personal background, you can check out any forex broker online.

- Independent Financial Advisers

- Successful Forex Traders

- Banks

- Insurance companies

- Advertising companies

- Organisers of financial seminars

- Estate agents

- Sales Executives with interested* client base

- Any business professional with interested* clients

*How do you know if your contacts are interested in the forex markets?

If your contacts are the kind of people who satisfy all or some of the following criteria, then the chances are that they might be interested in trading forex. And this means that you can earn commissions from introducing them to a forex broker:

Previous experience in trading online

Previous experience in investing

Have disposable income to trade

(usually above USD10,000)

Are interested in alternative forms of investment

Want to trade themselves

Want professionals to trade for them

There are few prospects that offer individual or commercial entrepreneurs more benefits than those provided by becoming an introducing broker in the online foreign exchange business. These benefits are driving more and more ambitious individuals and companies to offer their customers and contacts a direct route to trading currencies online and/or investing their money in professionally managed forex accounts.

Qualified businesses and individuals across the world take advantage of the rapid growth of the forex market via an introducing broker relationship. If you want to be one of them, read the section below on why you should become an Introducing Broker.

Below, I have listed just some of the advantages of becoming an Introducing Broker for an online forex brokerage:

Introducing Brokers - Why should you become one?

Your benefits

• Provide your customers and contact with access to the freedom that comes from actively trading their own money online on secure forex trading platforms.
• Increase the number of investment and money-making opportunities you offer your clients and network, which in turn improves the scope and reputation of your own business and can lead to greater client retention levels.
• You are paid a commission based on the trading volume of the clients you refer. For your clients, this doesn't mean that they pay more. You are remunerated exclusively by the forex broker out of his profit from your referred clients.
• You can receive daily reports on the commissions you generate through the clients you refer to your forex broker. This enables you to monitor the growth of you new business online, 24 hours a day.
• You can take advantage of the explosive growth in the demand for alternative investments by offering your high-net worth clients a managed forex account. By introducing clients to a managed forex account, you gain because their investments are being managed by professionals and this increases your reputation as a quality financial services provider.
• It's easy to get started as an Introducing Broker. In fact, if you simply decide you want to introduce clients for a commission based on their trade volume (which is the most popular type of Introducing Broker agreement), then all you need is a relationship with a couple of forex brokers.
• You can leverage the potential in your existing customer base or commercial relationships by constantly improving the level and depth of financial services you provide.
• Your clients often gain better service from you (if you choose to manage your relationship with them directly. The reason for this is that most forex brokers are international and that means that they may not have the in-depth expertise or understanding of your clients specific needs as you do. This improves your service offering and assists in building client loyalty.
• Your own Swiss bank account. A few forex brokers even provide Introducing Brokers with their own Swiss bank account where all commissions are paid. The advantages of having your own Swiss bank account are well known, but there are some great free guides to Swiss banking on the net.

Your clients' benefits

• Your clients can trade forex whenever they choose. The forex market is the most liquid and most actively traded market in the world. This means that 24 hours a day from Sunday evening 22:00 CET until Friday evening 22:00 CET they can decide for themselves when they want to trade and when they want time off.
• Your clients get free account management services to make their online forex trading even easier. All reputable forex brokers provide a complete back office (account management) system, free of charge to all clients.
• Your clients can diversify their investment into online forex trading. More and more investors and traders choose to spread their risk by investing in a number of capital market products, such as stocks, forex, futures etc.
• Your clients do not have to be investment wizards. Anyone can learn how to trade forex in a few hours. In fact, most forex brokers provide in-depth training in how to use their systems.

Getting started as an Introducing Broker

Make sure that the forex broker you choose to become an Introducing Broker for provides all the assistance you require to grow your new business.

The best ones in the market will provide you with the support, materials and training you need so that you can promote their online currency services to your clients and contacts in the most informed and compelling way as possible.

About the Author

Fiorenzo Fontana has held several senior positions in the financial services industry as a trader and analyst at UBS. Fiorenzo has built a career spanning more than 25 years in investment banking and capital markets trading. Mr. Fontana is a citizen and resident of Switzerland and a graduate of the Chiasso Business School, Switzerland.

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Forex Trading for a Living: Education vs. Experience

Many scoff at the idea of “Forex for a Living”.
The disbelief in this idea is further encouraged by tales of trauma received by many an unfortunate trader. We have all heard the horror stories, the tragic accounts of so-called “newbies”, and are tempted to dismiss the idea of trading for a living right off.
On the other hand, we have success stories.
Traders come forward to say - “Yes, it’s very possible! Look at me, I live off my trading.” Some people who read or hear such talk say, “I think he’s a dirty liar!”. They think, “If he has money, its because he was rich before – it wasn’t trading that made him so!”, or “I don’t know how much he lost before he made a profit.”
But not all responses are negative. Amongst the negativity can often be found genuinely curious people, who, with an open mind say, “Wow, how did he/she get to be so good?”, “How long did they trade to reach such results?” or “What strategy did they use?”
Let us make some observations of ability from a trader’s point of view.
We all know that the market is unpredictable - no one knows exactly where the price will go. We can get help from technical analysis and fundamental analysis to analyze the movement of the market. The nature of the market gives birth to three types of traders – “Casino Traders“, “Bookworm Traders“, and “Educated Traders“. We will take a closer look at the difference between these three types of traders.
“Casino Traders”
“Casino Traders” are traders making decisions based on instinct alone. Such traders always have two scenarios to expect – 1) the price is going to go down, or 2) the price is going to go up. This way of approaching the market is very similar to gambling, but the trader may still adapt and even win – for a price. Based on his/her experience, they might choose to enter, or watch the market for a hint of movement before taking an action - unfortunately the direction of the market is very unpredictable and can be misleading.
“Casino Traders” will do their best to follow the trend, but without understanding how a trend works, they will only have past price history to judge by, so they will learn the characteristics of a pair by observing the historical movement. “Casino Traders” may also employ some type of oscillating indicator to indicate when the instrument is overbought or oversold, to help them decide whether to buy or sell, without any clear idea of the entry, exit, and stop loss levels.
They will ether if they feel the time is right to open a position, and exit when they feel the price will no longer move in the right direction. As you may expect, most “Casino Traders” do not last long on the market.
“Bookworm Traders”
Another kind of trader, the “Bookworm Trader”, has gained forex knowledge from researching free resources available across the web, participating on forex forums, reading free e-books, and other materials.
They will spend time creating, testing, and revising trading systems and strategies, and reading other traders’ ideas, but in the end, such traders still typically learn by trial and error - and it may be a very long time before they are ready to trade confidently. Some of them use their live accounts to test whether their system works or not – and many get their account burnt away. The better, luckier “Bookworm Traders” will see a profit and can grow to be successful traders, but the cost of reaching that point is high.
“Educated Traders”
As we know, 90% of all traders end up losing, and only 10% survive as successful traders. Lets discuss how an “Educated Trader” - a trader with a formal forex education - will make their trade. Before investing money in a live account, they invest in themselves by paying tuition for professional forex education. For a few weeks they learn from the experiences of their educators and mentors, trade on their demo accounts, and absorb many important lessons that “Casino Traders” and “Bookworm Traders” learn through expensive and painful losses.
When “Educated Traders” start trading their live accounts, many continue being mentored by their educators (quality forex education often includes mentoring services and live trading rooms), letting their trading ability improve day to day, and moving down the path towards becoming a successful trader. They get a return on their initial investment in a relatively shortly time, when they begin collecting a profit from trading. By investing in themselves, they prepare themselves for many market situations that other traders are not prepared for.
So what’s the real difference between traders?
In the table below we can see the difference between the three types of traders – those who trade based on experience and instinct alone, those who have taken the time to learn on their own, and those who receive a formal forex education:

	“Casino Trader”	“Bookworm Trader”	“Educated Trader”
Cost of learning:	Your wallet is your limit – could be everything!	Tuition is free – but you often get what you pay for.	As little as $300 to start.
Time to graduation:	Who knows? Life for you is a casino.	1-10 years, depending on ability and quality of learning materials.	Anywhere from 3 months to a year.
Time until trading becomes profitable:	Possibly 1 years or more, based on luck.	Could be months or years.	Right after finishing your lessons.
Impact on your life:	Major financial loss, bankruptcy, hopelessness, emotional stress, impact on health	Emotional stress until profit is achieved, health impact from spending too much time in front of a computer while learning.	Just like at a professional university, everything is under control, and life is getting better.
Ways of looking at forex:	Trading is always a gamble.	The market is confusing; My system needs to be updated constantly.	I know exactly what I must do for my trading.

So what is the answer to this question – is “Forex for a Living” possible?
The answer is “Yes, it is possible” - with a good education, mentoring, and contact with an experienced educator. So the final word is “Get Educated!”

About the author

Hendra Wijaya, 31 y.o., living in Sidoarjo, East Java, Indonesia. He has Engineering degree from the University of Surabaya and worked as an engineer in several major Indonesian manufacturing firms. Hendra first became interested in world markets during his days in the University, but after learning about the forex market in 2005, he "fell in love" and dedicated himself totally to learning and trading currencies.

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Creativity in Currency Trading

“Is it important to be creative in your trading?”

I’m not sure I can describe it in terms of importance. The creative process is somewhat of a mystery, even to scientists who study it. There are a few common characteristics that all creative persons possess (such as an openness to a variety of internal and external experiences and a driving need to express one's sense of individualism), but for the most part, exactly how the creative mind makes earthshaking discoveries is unknown. A few prerequisites are necessary, though. The mind must be focused, for example.

New ideas must flow through the mind freely, and there must be a wide range of ideas, so that they can be combined and re-combined in new ways. New and creative trading ideas are necessary to stay ahead of the crowd, so doing whatever you can to prepare your mind to brainstorm new ideas will help you develop creative trading strategies that are the foundation of profitable trading.

Many great scientific discoveries were made almost by accident, through a serendipitous observation. Had an untrained eye made the observation, it would have been missed. But because the scientist's mind was continuously running through a wealth of ideas, he or she saw a new discovery in a seemingly ordinary event.

Discovering new trading ideas is also a creative, intellectual endeavor. You must get your creative juices flowing in order to see the next new idea. It's essential that you "prime" your thinking processes, get your mind ready to make a creative observation.

In some ways, your mind is like a well. You prime a well to get the water flowing, and once it's started, it flows continuously. You must similarly prime your mind to get ideas flowing. Various ideas in your mind are stored in a hierarchical structure. Information is stored together in a clump, depending on its meaning.

When you aren't thinking of a particular topic, it's hard to bring information about that topic into consciousness; it lies their stagnant and hidden. However, when you make a concerted effort to think carefully about a specific topic, or a closely related topic, and start running through a bunch of possibilities, all kinds of new possibilities become apparent.

Your mind quickly scans various concepts and ideas, almost unconsciously. Suddenly this wealth of information combines and you see something new.

For example, suppose you develop a vague trading idea about how a set of indicators may forecast the price of a particular stock. Once you get the basic idea in your mind, you can prime your mind to get the creative juices flowing.

For example, you can scan a set of charts to back test and find support for your hypothesis. As you look through the charts, the information you see will prime other related information. Soon idea after idea will coalesce, and you'll make a new discovery that will serve as a basis for a new trading strategy.

The main point is that you must set your thinking processes in motion to come up with a creative new idea. Some traders even suggest putting on a small trade based on a hunch in order to set your creative processes in motion.

When you put on a trade, your adrenalin starts to rush, your attention starts to focus, your senses are heightened, and you suddenly change your perspective until you see new ideas. The more your mind is active, the more likely you'll make creative new discoveries. Knowing about the creative process and how to set it in motion gives you power.

Some people are down on themselves because they can't seem to think creatively. But they can. They just need to know how to do it. It's vital to be relaxed and free of anxiety. But it's also essential to prime your mind in order to start the process. So when it's time to think of a new trading idea, think creatively. Set your creative processes in motion. You may come up with a big idea that will make you huge profits.

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