One of the most vital aspects of trading success if to find out who you are as a trader.  Now, that may sound like Dr. Phil pop psychology, but it is true.  Successful traders are successful because they have found an approach to the market that agrees with their unique psychological makeup, and this is essential.  One of the most vital aspects of finding out who you are as a trader is discovering which timeframe of trading best agrees with your personality.

Screen Time

As a new trader, trading is exciting.  The rush of opening, managing, and closing trades is exciting; therefore, most new traders are drawn to the idea of intraday scalping.  However, there are a few points of consideration that many new traders do not think about.  First of all, what do you want the next ten years of your life to look like?  Many people get into trading financial markets in order to enjoy more free time for other activities.  A trader who scalps the market is not going to have that much more free time than the typical 9-5 offers.  As a scalper, a trader will have to be in front of the screen to open, manage, and close trades.  Is that what you want to do for a number of years?  If so, then great.  If not, then there is another alternative to consider swing trading.

Swing Trading

This style of trading involves holding trades for anywhere from 12 hours up to several days.  This style of trading does not require a trader to be in front of the computer to initiate, manage, or close trades, although a trader will have to put in a specific amount of screen time each day analyzing the market and looking for potential setups.  Swing trading will generally have much bigger stop losses and profit targets than scalp trading, and this can be a difficult transition for traders to make initially.  However, if traders can be disciplined to sit through more volatile swings in the fx market, then swing trading has major advantages over scalping.

• Lower transaction costs because few trades are being executed.
• Significantly less screen time.
• Less stressful style of trading since trader is not watching trade activity tick-by-tick.
• Not as emotionally demanding as scalping.

Best FX Pairs

The beauty about FX Trading is that most pairs are great for swing trading.  Swing traders are typically aiming to pick up at least 60-70 pips in the forex market when they take a swing trade, and these swings happen on a daily basis on most pairs.  Now, swing trading is easiest with pairs that are less volatile.  The reason is simple.  Volatile pairs may move 80% toward target, and then swing back the other way and erase all the gains before it continues toward the target again.  These highly volatile pairs can make swing trading a challenge.  In this table below, volatile and low-volatile pairs are listed.  These descriptions are not perfect, since currency pair volatility can shift dramatically with new market conditions, but as a general rule of thumb, this is how most traders view these pairs.

Swing trading has many advantages to offer the trader.  On top of those listed above, traders who still hold full-time day jobs may find swing trading a very good fit for their lifestyle and time commitments. Keep in mind that trading forex on margin is risky. Never speculate using money you cannot afford to lose.

For the traders among us, whether the harried day trader or the swing-trader looking for trades that last a few days at the most, the thought of attempting to survive in volatile markets, especially the currency markets, without the assistance of either technical or fundamental analysis is anathema, an obvious prescription for failure.  The last thing a trader needs is to be blindsided by an immediate reversal of material proportions.  This situation can occur every month like clockwork with the release of non-farm payroll data by the U.S. Department of Labor on the first Friday of the month.

December 3, 2010 was just such a day.  The chart below illustrates the pricing activity of the “EUR/USD” currency pair:

The employment data is critical to assessing the health of the economy of the United States.  The data for the prior month is released at 8:30 A.M. EST, and analysts need about thirty minutes to assimilate the report and react.  Trading volume suddenly shifts into high gear.  Broker servers become overloaded, together with switchboards.  Attempting to change previously issued orders may not be possible during this period.  Broker agreements even specify that orders, especially stop-loss orders, may not be executed due to high volume.

In this case, there was an immediate upward movement by the Euro, a response to an unexpected increase in unemployment in the U.S., but the trend continued for nearly three hours.  Traders that “trade on the news” never try to pick a perfect bottom or top, but in this example, after the initial tsunami subsided, there was ample room to benefit from the last 100-pip leg of the run-up.

Technical indicators would have provided guidance for the above entry and exit points.  The “GBP/USD” tends to react more widely.  Its run-up was on the order of 200 pips, versus the 150 pips above. Fx trading on the news is not for the faint-hearted, but even if this opportunity is not for you, you need to be prepared for the volatility that can occur when major data releases are announced.

The dates and times of public releases of economic data in major markets are known and published.  Many brokers produce a schedule to assist their clients in preparing for these events, if only to avoid the volume outbreak.  Volatility, however, is the basis for many trading strategies, and measuring the strength and momentum of the trend is key to selecting profitable opportunities in the market.  There are indicators that have been designed to give guidance in both of these areas.

Even for the long-term investor, there are obvious benefits to be gained from technical analysis.  The optimization of your security entry price can yield immediate gains.  Major stock patterns are much like shorter versions within currencies – they tend to move in waves.  Technical indicators can prevent you from buying on a peak when an overbought condition is prevalent.

The most successful floor traders are those that have the most experiance, this is no coincidence at all and should be a pointer for those who aspire to become a good trader. Day trading can be likened to being a sportsman, such as a golf pro or tennis champion, you need to be trained and in good physical shape. Skills are needed which must be developed over time and practiced until they become 2nd nature. If you want to learn how to day trade you must be prepared to put in the effort. Here are some of the key skills that you must develop as a trader.

1. Technical analysis can be used for futures as well as the more standard stocks, options and bonds that most people trade. This can give you a large edge over other traders who have not taken the time to study the charts support and resistance areas, trendline and patterns. Learning technical analysis is really a must do if you want to trade futures successfully.

2. This is a very simple point but is very important, always have your trading plan prepared before you enter a trade, never try and create it on the fly, you will be much too emotional. Make sure that you have both an entry and exit point in your plan.

3. Keep your losses small!, this is the one thing that every trader must do if they want to stay in the game for a long time. By doing this you will preserve your capital allowing you to trade another day. Your small wins will compensate your small losses allowing your big wins to give you an overall profit

4. Over trading is a big mistake that a lot of amateurs make. Professionals tend to be more patient and wait for the better opportunities to come along, this is called cherry picking and takes both patience and discipline. These are essential skills that you must develop.

5. This is a big day trading tip, it is important that you track all your trades and review them to see where you are making the mistakes. This is hard work, but this is what separates the professionals from the amateurs. Unless you do this you will keep on making the same mistakes. The best way to do this is to keep both a daily and weekly log.

6. Only trade when you are both physically and mentally prepared. This is often overlooked but is very important. Do you think a golf star can win a game when they are tired and mentally not focused?, it’s unlikely. Being prepared means getting a good nights sleep, having your trading station and charts well prepared before the market opens, taking the time each and every day to review your trading plan and rules. Finally you must have the mental frame of mind and confidence that you are going to be successful today in your trading.

7. If you are new to trading futures take the time to paper trade until you are very confident that you are going to make money. You will know when you are ready because you will start to hate paper trading knowing that you could be making real cash profits on a consistent basis.

Remember that the markets only trend for about 20-35% of the time, the rest is either sideways or very choppy, if you want to do trend trading to win you must be fully prepared when the opportunities arise.

The aim of this article is to give you a bit more information about ETF (Exchange Traded Funds) trend trading.

It was during the 90′s that ETFs were introduced into the world of investment. Today, they are used as an investment vehicle, traded comparable stocks or shares on the stock exchanges. Investors are attracted to the funds because of the tax efficiency that they have. They are also attracted to the similarity to stocks and the low costs, which are definite benefits.

When you get into ETF trend trading, you will find that it is similar to mutual funds, in that small investors are able to purchase different types of securities through funds. However, those two are distinguishable.

ETFs maintain all of the features that ordinary stock have. As an example, limit orders, options and short selling. However, they still give easy diversification, expense ratios and tax efficiency of the index funds. Unlike the mutual funds, they will not have as much of a net asset value that is calculated each day.

During the trading day, ETFs will experience value changes as they are sold and bought. They have a tendency to trade at the same price as the net asset value has been set at. Most of the ETFs will be tracking and monitoring the financial index. As an example, the Dow Jones Industrial Average.

ETFs are known to be the most innovative investment medium of the past twenty years. In fact, about sixty seven percent of the professional investors call it this. Of those professionals, about sixty perfect have reported that the ETFs have changed how they build their investment portfolios.

Many investors have a tendency to invest in the ETF shares as a long term investment, instead of short term one. This is because they have the possibility of being economically acquired. However, some investors do prefer trading ETF shares regularly in order to utilize investment strategies that they have learned.

Speaking of learning investment strategies, there are some courses that you will be able to take on the Internet that will make you a better trader. You should go for one that will be willing to teach you all you need to know along with the tips and secrets of the trade. While you take that course, you need to pay attention to every bit of it as overlooking any aspects of it could result in you losing money once you begin trading.

If you’re serious about earning some extra money, even making a full-time income with ETF trading; go check out the ETF Trend Trading course now.

The 50 simple moving average, or 50 SMA, is simply the sum of the last 50 values for each period, divided by 50, this is a moving window, as time moves on so does the average. Notice that I used the word period because this indicator works on any time period in exactly the same way.

It can be used on monthly, weekly, daily, hourly, 30 minutes, 15 minute and on whatever time period you want to monitor and trade. Although the SMA is the most widley used there is also the exponential moving average or EMA. This is a weighted version of the formula using the mathematical exponent function to give more weight to the more recent values, this has the effect of making it a slightly faster average that many traders prefer.

The reality is that it probably does not matter if you used the SMA or the EMA, what does matter however is that you use one or the other and then be very consistent with it. Do not switch between them, it is more important that you trust your chosen indicator then a slight difference in its value.

The simple moving average is primarily used to determine what the current trend of the stock is, depending on the value used it could be a short term, medium term or long term trend. An important point to note is that moving averages are really only useful when the stock is trending, if the moving average is flat, i.e. horizontal on your chart it can become very choppy, this is a good time to not trade.

The general rule is that if the current price is above the SMA the trend is up, if below the trend is down. This is very important to know because it forms the basics of trend trading and trading with the trend.

For the short term trend many traders like using a 5-8 SMA or EMA, here is a trading secret, never trade again the direction of the short term tend, this is really just common sense when you think about it.

Moving averages can often act as support or resistance, many traders use the 15, 21 or 30 SMA for this purpose.

There are a number of other very important moving averages that you need to know about, these are the 50, 100 and 200 SMA, and this mostly applies to the daily and weekly charts. A lot of big players in the markets, like the the mutual funds, investment banks etc use the 50 and 200 SMA as support and resistance, if they decide to buy or sell based on these you need to follow suite, the 100 to a lesser extent. These are very useful averages to watch if you trade EFT’s like an Oil ETF.

A useful tip is that when a stock breaks through one moving average it will often move all the way to the next, for example, if a stock breaks the 30 SMA it may move to the 50 before finding some support or resistance.

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Although it may seem obvious to most stock market swing traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:

In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These stock indexes generally only contain major blue chip stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.

For example the DOW 30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).

Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to easily buy and sell at the price you want without having a delay. You will also get a smaller spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered very liquid it should trade at least 500,000 shares per day, ideally even more.

It is best to avoid stocks that are bellow as this usually means the company is in trouble, although with the bear market of 2008 there have been a lot of good stocks at bargin prices between and . Avoid buying a stock below at anytime.

Another consideration is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option in order to protect your stock.

Be very cautious about buying a stock just before it’s earnings release, stocks often drop significantly if you come out with a poor report. Earnings are released 4 times a year with one of them being the annual report.

If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.

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There is a lot of hype surrounding options trading, and for good reason, it’s a good way make a lot of cash fast, or can be used to grow your capital consistently month after month.

There’s also a lot of hype about how complicated it is and why you need to spend thousands of dollars on options trading education before you get started. Needless to say this last statement usually comes from trading seminar companies trying to sell your their trading course on options.

Lets cover a few of the basics about options trading and set you straight about a few important points. Firstly yes it is true that you can make a lot of money trading options, but of course you can also lose money just as fast.

When trading stocks your leverage is 1:1, if you go full out on margin you get get 1:2 leverage, but thats about it. With options it is not as straight forward to calculate the leverage but generally speaking you can get between 1:5 and 1:10 when you buy an option on a stock, or ETF.

So with 1:10 leverage, when the stock increases by 5% your option can increase by approx 50%, and this can happen in just a few days, this is why swing trading strategies using options on stocks is so popular.

However the downside is that the reverse can happen, if the stock drops by 5% your option can also drop by 50%, at which point you may want to close the trade and save some of your option value, it really depends on what your stop loss and risk management plan is.

What I’ve described above is called directional option trading where you are betting on the getting the direction of the stock movement correct, this is highly speculative. Options can also be used in option strategies which are much more non-directional, such as covered call trades, credit spreads and Iron Condors. In these trades there is much lower dependance on getting the stock direction correct, but it still matters.

So should you learn to trade options?, in my opinion you should not do directional option trades until you become very good at trading stocks. This is because you really need to be very precise with your entry and exit strategy and trading plan, and be very good at technical analysis.

Whereas if you want to do non directional option trades you don’t need to be such an experianced stock trader to be successful, but of course it does not hurt either.

Learning how to trade options is a very good skill to have, but don’t rush into it and blow out your account. Make sure that you get a good options trading education before you start, and also make sure that you have a very solid stock trading education as well, such one from Top Dog Trading Review.

Penny stocks are definitely risks that are better suited for the investor that likes to go skydiving, skinny-dipping, & bungee jumping. Of course though several extra conservative investors will obtain some attraction in the less risk promise of hefty payouts that the right penny stock can give. In fact, a number of investors vision of being the one to get that perfect penny stock through absolute prospective that will someday become the next LDDS turned WorldCom before the fall. The truth is that little businesses become big businesses everyday. Miserably, those that produce it to the big leagues are quite few in number while compared to those who don’t.

Penny stocks are a great track for small companies to finance progress spurts, soft over rough spots & manage to become even better. This also allows companies a possibility to restructure and with allowing their stocks to be traded whether penny stocks they’re generating revenue that can be reinvested into the company to excellent result. Many moments, this is a victorious venture for the company but there are many times it isn’t. This is part of the risk that’s taken when investing in penny stocks. While the companies manage to pull themselves together, grow at an exceptional rate, & become the company you hope they could become the payouts are remarkable. But do not wait for immediate results from your penny stock investment.

You must also be aware that many companies purpose penny stocks in order to run scams on unsuspecting investors. It’s nearly impossible to find every particulars about penny stock companies when investing in penny stocks because unlike those companies that trade with the big boys (NYCE, NASDAQ, etc.) these companies are not needed to open their books to potential investors & don’t face nearly the identical amount of scrutiny that better corporations face while opening their doors to investors.

But the question of as or not penny stock trading is for your is going to depend almost wholly on your personal sense of adventure and your willingness to decide risks with your money. There are several out there who firmly believe that in order to gain much, you must also be willing to risk lots of. This is a way of life for a number of that holds true for them in like, life, & in money. These persons are much further capricious through their money and are willing to decide the risk with no reservation or fear of a negative outcome. These are the persons who do wonderfully, win or loose when investing in penny stocks.

On the other end of the spectrum there are those who jealously protect their nest eggs and bank their retirement security upon the funds going in that basket. These are persons that are quite likely to get themselves panicking their pathway through a penny stock investment for a number of reasons. You could’t really study the companies (a travesty to people who prefer watchful arrangement) & you can’t gain rapid & fluent access to your funds when invested. This removes several sense of control over you financial health & is not a comfortable feeling for investors who love to feel in control. I could definitely relate to those who are in no condition, truly, to invest in penny stocks. It is a frightening investment custom while houses, retirements, braces, & college educations are on the line.

When you’re the type to invest in penny stocks without carrying the heavy baggage of affraid, stress, & anxious sweats together with you then you may get yourself in the position to change your wealth status. Though wheter you go against your comfort level & create the investment there is lots of to gain. Unluckily the risks of this sort of investment are best whether well and should not be overlooked or underestimated. Thus it still boils down to you & the person you are deep down indoors. Are penny stocks accurate for you? Only you can answer that.

So many people tend to ask whether or not it’s really possible to make money with day trading for a living, but you need to bear in mind that this is quite a difficult question to answer. Remember, there are many people who have become incredibly wealthy with day trading, and they make no secret that trading is their only means of income. On the opposite end of the scale you have those who have lost huge amounts of money.

It is fairly obvious to say that such people are not making a living at what they are doing. And there are those that have their minimal ups and downs through the years. Ultimately, the ability to day trading for a living will often be based on your success at the process. Some people are better at it than others and they can most definitely deliver the trades that make them a success.

A trader who trades with ten thousand dollars per week and yields an average profit of one thousand dollars per week, will end up with a little more than fifty thousand dollars of profit each year. You can be rest assured that there are many people living on far less money, so yes, you certainly can earn enough money to live on. Also, nothing stops you from using some of your profits in order to increase your portfolio.

Ideally, you should not view trading simply as a way to make huge amounts of money. Bear in mind that the vast majority of people never end up making millions, and those that do, know what needs to be done when an opportunity comes knocking.

What they did not do was gamble the proverbial farm hoping to make a killing. This is a common error made by those that rush into trading. Avoiding this common (and dreadful) mistake can often translate into greater success at other points in one’s trading career.

Providing you take your time you’ll inevitably end up discovering that being a successful trader is not nearly as elusive as what some would have you believe.

You may also want to consider having a day trading robot in place if you’re serious about day trading for a living, in that such software is capable of picking up on upticks and downticks in the market. Obviously, armed with this sort of program you’ll have even more chance of being successful. Additionally, robots are nowadays able to provide you with some invaluable information so that you in turn can make responsible trading decisions.

Over and above the regular day trading robots, you can also find robots capable of trading automatically on behalf of the trader. Admittedly, some traders feel that this is a little too risky, while others have found such robots to be indispensable with regards to day trading for a living. The bottom line is however, you should only ever use the most reliable trading robot you can find.

At the core of any strategy to earn money day trading for a living is understanding the fact that trading is not investing. It is not a long term strategy. It is designed to buy and sell on the same day. This means day trading is not a venture for those that are conservative.

Trading is for those that wish to engage in risky strategies. The rewards make the risks worthwhile for them. If you fall into this category, day trading for a living may be a wise plan for you.

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If there is so much money to be made with day trading for a living, why don’t more people invest in the strategy? This is a common question many people on the proverbial fence about day trading will ask.

For the most part, this question is asked simply because it’s a convenient and easy way out of having to make a decision as to whether or not you should start day trading for a living. If on the other hand you do indeed want to find a proper answer, then you need to know that there is a massive flaw present when it comes to day trading for a living. Believe it or not, but that huge flaw is none other than the misuse of the word “invest”.

Right off the bat, it is critical that those interested in this type of revenue generating understand that day trading is most definitely not a form of investing. It is trading. There is a huge difference between the two. Investing is all about the value of money over time.

While there are certainly high risk and aggressive investments one can make, they all deal with the notion of holding onto the investment for at least a short while. (Conservative, long term investments will be held for significantly lengthy periods of time.)

Unlike investing, day trading for a living doesn’t involve trying to hold onto your cash. In fact, if you’re day trading for a living you need to be buying and selling on the same day, and no matter what anyone has told you, it’s not an easy process. Of course there is plenty of money to be made with day trading, but there’s also a chance that you could end up losing a great deal of money.

Okay, so why don’t more people become involved with day trading for a living? The simple answer is that not everyone is cut out for it. Remember, everyone is different, and while some people may be highly successful when it comes to day trading for a living, others simply fail to grasp the concept altogether.

Considering the large amount of money that is on the line when day trading as well as the amount of effort involved with being successful, it is no secret that some individuals would be better off not trying to do this for a living.

If you feel you have a knack for the markets and you’re confident enough to begin trading, then of course it is possible for you to make a huge amount of money. You can be rest assured that there are some people who have begun day trading with virtually no money at all, only to end up making millions of dollars. Admittedly, this is certain not the case for everybody, but at least you can look to these people for inspiration if you’re currently sitting on the fence with regards to becoming involved with day trading.

Contrary to what you may have heard, you can start day trading with a very small amount of money, and in fact, this is actually advisable, irrespective of how wealthy you are, so that you can first gain some experience.

By no means is day trading for a living for everyone, but for those with find it to be a rewarding adventure, there’s a lot of money to be made. The bottom line is; if in your heart you don’t believe that day trading for a living is for you, then you should walk away. On the other hand, if you have a feeling that might enjoy it, then by all means go ahead and give it a go.

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