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Different Forex Signals on Different Time Frame

May 5, 2012 By Leave a Comment

In the forex trading faq today, we have a question from one of our subscribers asking what to do if different time frames on his chart tells him different signal.

Indeed this is something that is pretty common in trading. I must say that the best will be to enter a trade when all the time frames show similar signals. However this will give you little trading opportunity every month.

For me, I always use 2 time frames when I am trading. I use the higher time frame to look for trading opportunity. Once I have a good trading opportunity identified on the higher time frame, I will then move to the lower time frame to wait for a good entry signal.

I will not suggest you to read more than 2 time frames everytime as it will be very confusing. You just need 1 higher time frame and 1 lower time frame and that is it.

All you need to do is to focus on the higer time frame and then wait for good trading opportunity to occur. Once you have an opportunity, you will then move to the lower time frame to look for entry and this will solve your problem of having different signals on different time frame.

I hope that I have answered your question and if you guys have anything to share with us here. Do feel free to give your comment below.

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Forex Indicators That Makes Profit

April 26, 2012 By Leave a Comment

I have received an email from one of our readers asking me to suggest an indicator that can help him get 10 pips everyday.

As a new trader, you tend to believe that there is an indicator that can make you profit consistently or there is an software that can help you to trade automatically.

I have to break the news to you that no such software or indicator exist as trading has to be a combination of support and resistance with indicators as well as chart patterns to make winning trades.

Do not be cheated by those forex robots on the market that claims to be able to help you make money. If they really works, no one will ever need to work for anyone. If they really works, will they sell it to you for just $97.

If you are still struggling in your trading, I will suggest you to take up a good forex course and then learn the strategy taught in it. Give yourself 3 months to practice the strategy taught in the course and not do not get another course as it will make you lose focus.

After trying out the strategy for 3 months, you will know whether the strategy works as you should be making profit in your demo account if it is working. If the strategy does not work for you, you can then take up another course to learn.

The whole process of learning forex until you are able to trade profitably takes time. Sometime it will take up from 6 months to 2 years. However I must tell you that it is definitely worthwhile as you will have a money making skill for life.

So stop searching for any indicators that can make you profit everyday. Instead you should focus on learning a good forex strategy to trade with and put it to practice everyday.

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Forex Strategy That Do Not Perform

April 5, 2012 By Leave a Comment

In the faq for this week, we have a question from a reader telling me that he has been losing money in his trade so far and he is a day trader and a scalper. He wants to know what is wrong with his strategy.

The problem is he did not specify what his strategy was and therefore I am unable to tell him in detail what is wrong. However what I can do is to point out the mistake he is currently have and what makes a good and reliable forex strategy.

The number one mistake you are making is you trade with real money even when you are not sure how reliable your forex strategy is. If you have been reading my blog here, you should know that I am always telling you guys to trade demo account first before going live.

You will only trade live after you have made consecutive profitable months with your strategy. As for what makes a reliable forex strategy, below is my personal opinion.

A reliable forex strategy must have a decent winning percentage of 60 to 70% and have a risk reward ratio of at least 1:2.

The reason why I always recommend you guys to do demo first is because it is from the demo account that you track the winning percentage and the risk reward ratio.

Let me tell you why you need a good risk reward ratio to be profitable in your trading.

For Example:

You have a forex strategy that can win 5 out of 10 trades which means that it has a low winning percentage. However this can be compensated by having a good risk reward ratio.

Let says that your strategy has a risk reward of 1:2 and you always place your stop loss at 25 pips. This means that you always take profit at 50 pips.

5 winning Trades = 50 x 5 = 250 pips
5 Losing Trades = 25 x 5 = 125 pips

You still make 125 pips even when you only win half of the time and this is why having a high reward ratio can make you money.

So my personal advice to you is to trade demo account with your current strategy and then trade its risk reward ratio and winning percentage at the same time. If you are not profitable at the end of 3 months, you can then move to learn another strategy and track its performance on a demo account again.

You will repeat this process until you are able to make consistent income every month.

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How To Overcome Your Fear In Trading

March 29, 2012 By Leave a Comment

I have received a question from one of the subscribers of my newsletter telling me that he is afraid of entering trade because he is afraid of losing money in that trade. He will like me to give him some advice on how to overcome his fear in trading.

First of all, I believe that you have no confidence in your own trading strategy. It could be because you did not test out your forex strategy to know its winning percentage.

I must inform you that there is no forex strategy that wins 100% of the time. Losing is simply part of the game. What we are looking for as a trader is to have a forex strategy that is able to win 70% of the time.

My personal advice for you is to test out your forex strategy on a demo account for at least 3 months to check its winning percentage.

Once you know that your strategy makes you money consistently for 3 months, you will be able to overcome your fear in entering a trade because you know that you are going to make money at the end of the month.

I know that most of you are eager to start live trading because you want to make money fast. But it is the same mentality that make you lost all your money.

It is very important for you to realize the importance of trading demo. It allows you to train your discipline in executing your trading plan as well as finding out the profitability of your strategy.

Therefore the best way to overcome your fear in forex trading is to trade the demo account.

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