Here we are going to look at the importance of currency research and how to implement in a trading plan for big gains over the long term.

Currency trading research falls in to specific categories – currency research before you trade, research for traders executing a vendors signals and research for traders who want confirmation for their own trading.

Getting the right currency research will have a big influence on your trading success, so let’s look at each area in more detail.

Currency Trading Research – Before you start

All traders need to know the basics, you wouldn’t try to drive a car without lessons, and neither should you try to trade currencies without a bit of study.

There are plenty of good books on trading and here we are going to give you some books that you may like to consider.

Good books to read include any by Larry Williams, Jake Bernstein and Ken Roberts while not specific to currency trading their easy to read and digest and give you an idea of what trading is all about.

You also need to read some good books on trading psychology and there is no better place to start than Jack Shwagers Market Wizards and New Market Wizards that complies some stories of some of the great traders of all time including: Ed sekoyta, Richard Dennis and the famous turtletraders. These books are essential reading for any trader.

Other good books on psychology include ones by Alexander Elder and Dr Van Tharpe

And the classic reminiscences of a stock operator by Edwin Le feuvre

Good overall reference books to have are fundamental market analysis and technical both again by Jack Shwager.

Currency Trading Research – Following Mechanical Signals

Many traders like to follow currency research in the form of newsletters and currency trading systems from vendors and then act upon the signals they provide.

If you are doing this make sure you:

1. Have full confidence in the method they are using to generate the signals and know as much about the logic as you can.

2. You also should study trading history to see how successful trades have been and make sure you are happy with the risk reward.

3. Keep in mind if you are following signals or trades you need to follow them EXACTLY and this means having full confidence in the method used.

Currency Trading Research – To help you with Entry and Exit Levels

If you don’t want to follow someone else and you wish to make your own trades then there is plenty of currency trading research services on the net.

There are services that you can pay for, but much of it is available free and in many instances, this information is the best.

Many of the larger brokers and banks have great research and cover both technical and fundamental factors affecting currency movements.

Do a search, and you will be able to find good daily, weekly and monthly currency research reports.

A Word of Warning on Currency Trading Research!

The amount of currency trading research on the net is vast and many traders feel that the more research they have the better and try to use 5, 10 or even more different services to help them with their trading.

The result? – They end up with to much information, much of it conflicting and get confused and unsure what to do.

The best way to use currency trading research if you are trading for yourself is follow a few services only, that reflect your trading style and use them as a filter for your own trades.

Currency Research – Helping to Make your Trading Profitable

If you are simply following signals or trades of someone else, you need to spend time doing your homework, so you have full confidence to execute trades with discipline.

Research is needed regardless of whether the method is totally mechanical or reasons are given for the trades.

To get the most from this type of research you need to follow ALL the trades, not just a few! Otherwise, you may miss the best opportunities and your track record will not reflect that of the service, which you bought.

The real problem for trader’s who want currency research to just help them confirm their own trading material, is the sheer volume of research available.

You need to be SELECTIVE and just have a couple – too many will confuse you and give you conflicting information.

As stated there is no need to pay, many banks and brokers offer great research and it’s totally free and in many instances better than the paid for services.

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and trading research info. Visit our web site now and grab your CD http://www.tradercurrencies.com

We have already looked at the difference between fundamental and technical analysis of currency trading in our “currency trading success” article, here we will concentrate more on the advantages of technical analysis for currency trading and how to build a successful system.

There are many different methods and tools utilized in technical analysis, but they all rely on the same principles – that price patterns and price trends exist in the market and that they can be identified and turned into profit opportunities.

Technical Analysis in currency trading is based on three core principles:

Markets Discount

The actual price is a reflection of everything known to the market that could possibly have an affect on price movement and includes supply and demand, political factors, and the market sentiment.

The pure technical analyst is only concerned with price movements, NOT the reasons behind the price movements.

Prices Move in Trends

Prices can move in three directions – they can move up, down or sideways.

Once a trend in any of these directions is in effect it usually, will persist and create a trend.

The market trend is simply defined as the direction of market prices, a concept that is essential to the success of technical analysis in currency trading.

Identifying trends in theory is simple; a price chart will usually indicate the prevailing trend as characterized by a series of waves with obvious peaks and troughs.

It is the direction of these peaks and troughs that constitutes the market trend, if they move up, the trend is bullish, if they move down the trend is bearish and of course if they move sideways then the market is in a period of consolidation.

History Tends to Repeat Itself

To a technical analyst in currency trading, the trader psychology that affects prices is extremely important, as human nature is repetitive and this shows up in repetitive price patterns.

This allows anyone using technical analysis in currency trading to predict where prices are likely to go next and traders can then act upon this information for profit.

The market price reflects everything

Technical analysis in currency trading is primarily concerned with price trends and everything that can possibly affect a currency is reflected in price action.

Technical Indicators

The logic of technical analysis for currency trading is universally accepted, and there are numerous ways to execute technical trading systems, with the huge amount of available indictors used either alone, or in combination.

We will look at the different indicators below and some that have proved highly effective in the technical analysis of currency trading. Any traders, who wish to profit from the currency markets, should consider these indicators.

Trend Indicators

A trend is a term used to describe the persistence of price movement in one direction over time. The easiest way to spot trends is via trend lines, drawn below price lows or above price highs.

While basic trend lines have gone out of fashion in recent years in favor of more complicated indicators, they are still one of the most effective ways to technically analyze currency movements.

Support/Resistance Indicators

Support and resistance describes the price levels where markets repeatedly rise or fall and then reverse. This phenomenon reflects basic supply and demand and when prices break above or below significant support or resistance, a big move can follow very quickly.

Again, the best method for spotting and acting on these breaks is the humble trend line.

We believe that trend lines should be the basis on which ANY technical analysis of currencies should be based on – and the indicators below are for confirmation:

Volatility Indicators

Volatility is a general term used to describe the magnitude, or size, of day-to-day price fluctuations independent of their direction. Generally, changes in volatility tend to lead changes in prices.

One great indicator to use is the Bollinger band.

Any trader should look at Bollinger Bands, as they represent one of the most effective indicators for the technical analysis of currency markets.

Not only is it good for predicting trend movements, but also it is useful for timing entry and exit levels, as well as when to increase or decrease position size.

Cycle Indicators

A cycle is a term to indicate repeating patterns of market movement, specific to recurrent events, such as elections, year-end monetary repatriation etc.

Cycle indicators determine the timing of a particular market patterns. A good example would be Elliott Wave theory. Cycle indicators however in our view are of little or no use, in the technical analysis of currencies.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over given time periods.

Momentum indicators determine the strength or weakness of a trend as it progresses over time. Momentum is generally highest at the start of a trend and lowest at market turning points.

Any divergence of directions in price and momentum is a warning of weakness; if price extremes occur with weak momentum, then an end of movement in the current direction could occur.

If however momentum is trending strongly and prices are flat, it signals a potential change in price direction. Examples of momentum indicators include Stochastics, MACD and RSI.

The most effective momentum indictor is the stochastic and using stochastic crossovers to time entry and exit levels, can be highly effective.

Sentiment Indicators

Many technical analysts in currency trading monitor surveys of investor sentiment such as net trader’s positions and bullish consensus.

These indicators attempt to gauge the general attitude of the investment community, to determine whether investors are bearish or bullish.

These indicators are only to be used when extremes of sentiment are reached, either bullish or bearish.

If used in this way, they are one of the most powerful warning signs of significant market turning points and can be used in technical analysis of currency markets to huge effect.

Putting it all Together

Traders make money from the technical analysis of currency markets in many different ways, however we believe that trend lines backed up by just a few additional indicators (to help time market entry exit and stop levels) can be very effective.

The ones we favor are: Bollinger bands, stochastics and market sentiment indicators, as filters for traditional trend lines.

The best way to succeed in technical analysis of currency trading is to use a simple robust system based on trendlines and just a few filter indicators such as the ones above and you will soon find yourself catching the big trends that yield the big profits.

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and technical analysis. Visit our web site now and grab your CD http://www.tradercurrencies.com

These days there can be a lot of ways to make extra money. Buying and selling real estate, getting a second job or opening up a brick and mortar business operation are among the most popular options.

But many of those traditional business options might require a heavy upfront investment or start up capital on your part, as well as paying an increasingly high interest rate on any loans.

Day trading stocks online on the other hand can offer you freedom and easy liquidation of your funds. You don’t have to tie up your initial seed capital for months or years. You can buy and sell stocks on the same day and put your potential profits back into your cash account with out making a trip to the bank and waiting in a long line.

Another good possibility of day trading is that You don’t need a lot of money to start making money, unlike the majority of conventional businesses.

But here is the first thing you MUST DO if you want to aspire success in day trading : You have to PREPARE YOUR SELF, just like you would in order to accomplish goals in other areas of your life.

Day trading is similar to any other business operation in the sense that every successful venture owes its success to the method used to conduct its business. In other words your day trading results depend in large part on your strategies and method. So never attempt to trade stocks with out using and practicing clear strategies on how to buy and sell stocks.

At the end of the day online stock trading is all about picking the best stock opportunities and following your buy and sell signals with ease and simplicity. Once you learn to master your trading decisions, you can aspire to produce consistent profitable results.

Stress Free Traders helps day traders & investors choose stock trading opportunities in a practical way every day at http://www.StressFreeTraders.com

Investing in penny stocks provides traders with the opportunity to dramatically increase their profits, however, it also provides an equal opportunity to lose your trading capital quickly. These 5 tips will help you lower the risk of one of the riskiest investment vehicles.

1. Penny Stocks are a penny for a reason.

While we all dream about investing in the next Microsoft or the next Home Depot, the truth is, the odds of you finding that once in a decade success story are slim. These companies are either starting out and purchased a shell company because it was cheaper than an IPO, or they simply do not have a business plan compelling enough to justify investment banker’s money for an IPO. This doesn’t make them a bad investment, but it should make you be realistic about the kind of company that you are investing in.

2. Trading Volumes

Look for a consistent high volume of shares being traded. Looking at the average volume can be misleading. If ABC trades 1 million shares today, and doesn’t trade for the rest of the week, the daily average will appear to be 200 000 shares. In order to get in and out at an acceptable rate of return, you need consistent volume. Also look at the number of trades per day. Is it 1 insider selling or buying? Liquidity should be the first thing to look at. If there is no volume, you will end up holding “dead money”, where the only way of selling shares is to dump at the bid, which will put more selling pressure, resulting in an even lower sell price.

3. Does the company know how to make a profit?

While its not unusual to see a start up company run at a loss, its important to look at why they are losing money. Is it manageable? Will they have to seek further financing (resulting in dilution of your shares) or will they have to seek a joint partnership that favors the other company?

If your company knows how to make a profit, the company can use that money to grow their business, which increases shareholder value. You have to do some research to find these companies, but when you do, you lower the risk of a loss of your capital, and increase the odds of a much higher return.

4. Have an entry and exit plan – and stick to it.

Penny stocks are volitile. They will quickly move up, and move down just as quickly. Remember, if you buy a stock at $0.10 and sell it at $0.12, that represents a 20% return on your investment. A 2 cent decline leaves you with a 20% loss. Many stocks trade in this range on a daily basis. If your investment capital is $10 000, a 20% loss is a $2000 loss. Do this 5 times and you’re out of money. Keep your stops close. If you get stopped out, move on to the next opportunity. The market is telling you something, and whether you want to admit it or not, its usually best to listen.

If your plan was to sell at $0.12 and it jumps to $0.13, either take the 30% gain, or better still, place your stop at $0.12. Lock in your profits while not capping the upside potential.

5. How did you find out about the stock?

Most people find out about penny stocks through a mailing list. There are many excellent penny stock newsletters, however, there are just as many who are pumping and dumping. They, along with insiders, will load up on shares, then begin to pump the company to unsuspecting newsletter subscribers. These subscribers buy while insiders are selling. Guess who wins here.

Not all newsletters are bad. Having worked in the industry for the last 8 years, I have seen my share of unscrupulous companies and promoters. Some are paid in shares, sometimes in restricted shares (an agreement whereby the shares cannot be sold for a predetermined period of time), others in cash.

How to spot the good companies from the bad? Simply subscribe, and track the investments. Was there a legitimate opportunity to make money? Do they have a track record of providing subscribers with great opportunities? You’ll start to notice quickly if you have subscribed to a good newsletter or not.

One other tip I would offer to you is not to invest more than 20% of your overall portfolio in penny stocks. You are investing to make money and preserve capital to fight another battle. If you put too much of your capital at risk, you increase the odds of losing your capital. If that 20% grows, you’ll have more than enough money to make a healthy rate of return. Penny stocks are risky to begin with, why put your money more at risk?

http://www.1source4stocks.com>Trading Penny Stocks | investment strategies for penny stocks 1source4stocks.com provides penny stock traders with online trading and investment tips, online trading strategies and penny stock picks.

Here are 10 tips for successful currency trading, and if you can implement them in your trading plan, your chances of trading success will be greatly enhanced.

1. Desire to Succeed – All the great traders have a burning desire to succeed and will do whatever is necessary to succeed.

2. Work Smart, not Hard – The amount of effort you put into currency trading has no influence on the amount of money you will make.

3. Simple Systems are better than Complicated Ones! – Many traders think the more complex a system is the more likely it is to succeed, but the opposite is actually true.

4. Don’t make Trades that are Uncomfortable – Trading is difficult, as you have to make trades sometimes to be successful that go against the majority of advice, you see (don’t forget most traders lose) so you need to take responsibility for your actions and act independently.

5. Discipline – Many traders have good trading methods that could make money, but they lack the discipline to execute the signals of their method.

6. Confidence – To trade in a disciplined manner you must have complete confidence in your ability to make money longer term.

7. Patience – Many traders think they always need to be in the market to make money, but the opposite is true.

8. Play Great Defence – All the great traders know that money management is one of the keys to trading success and they always protect their equity.

9. Be Realistic – We have all read stories of traders turning small amounts of money into fortunes quickly. While some traders have been able to do this, the reality for most traders is not so easy.

10. Know Yourself – By this, we mean you will know your strengths and weaknesses. By knowing yourself you will know what you are trying to achieve, how to do it and emerge a winner, which at the end of the day is what currency trading is all about.

So there, you have 10 tips for currency trading success. If you can absorb them all and implement them in your plan, these tips for successful currency trading will put you on the road to longer-term financial success. Good luck!

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and currency trading info. Visit our web site now and grab your CD http://www.tradercurrencies.com

Anyone can achieve currency-trading success – you can learn everything about trading currencies by simply investing the time necessary.

Fundamental Analysis

A currency trader who makes trades based upon fundamental analysis, will look at the supply and demand situation relevant to the particular currency studied, and try and predict the impact of such factors as:

. The health of the economy
 . Interest rates
 . Balance of payments
 . Employment
 . Trade deficit
 . Other factors

Technical Analysis

Technical analysis is the study of a currency, based strictly on using only the price history of the currency.

Technical analysis uses no information about the currencies supply and demand situation – it simply focuses on price action.
The secret of currency trading success is using technical analysis to spot them.

Long Term or Short Term Trading

For long term currency-trading success, is it better to be a long-term trader, rather than a short-term trader.

While traders can, and do make money with short-term methods of trading, the fact is, currencies trend longer term and these are the trends that yield the biggest profits.

Choosing a Trading Method

While there are many ways to achieve currency-trading success, all methods have the following salient points in common:

1. Simplicity

Most of the best trading systems are simple.
There is no correlation between how complicated a strategy is and how successful it will be.

2. Liquidate Losers Quickly and Run Big Profits:

The basis of any successful trading systems that deals in leveraged products is:

You need to be able to run the big profitable trends and exit losers quickly.

3. Understand your Method

This may sound obvious, but you need to understand your trading method, and the logic behind it, so you can execute it with confidence and discipline.

4. The Importance of Discipline

Currency trading success is rooted in a successful method applied with discipline. This means a trader has a method and follows it. This however is much harder in practice than many traders believe.

The more disciplined you are in trading, the more profits you will make longer term.

You should not underestimate the need for discipline, if you want long-term currency trading success.

Robust trading method + discipline = currency trading success

There are a number of variables involved in longer-term currency trading success and the above are the salient points to keep in mind when deciding how to trade currencies.

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and currency trading info. Visit our web site now and grab your CD http://www.tradercurrencies.com

One of the things a new trader learns within a few weeks or so of beginning his new adventure into the world of day trading is the difference between three symbol stocks and four symbol stocks.

The first thing to be learned, with a few exceptions, is that three symbol stocks are listed on the NYSE (New York Stock Exchange) or the AMEX (American Stock Exchange), while the four symbol stocks are listed on the NASDAQ (National Association of Securities Dealers Automatic Quotation System). You can read more about the three different exchanges and how they operate by visiting their individual web sites.

Next, the new trader usually learns that most day traders prefer to trade NASDAQ stocks over “listed”, a term that usually refers to AMEX and NYSE stocks but not NASAQ stocks.

The reason is quite simple. Historically, the root of it goes back to the hay days of day trading in the pre year 2000 bubble days. Most of the fast moving stocks were NASDAQ stocks. This is where the largest percentage of the high tech wonders were traded. It was then, and is today, where most of the day trading action is.

A lot of tools were developed or made available to day traders for the first time, and many of them were based on trading NASDAQ stocks.

However, along with that action comes a much higher degree of risk. NASDAQ stocks are much more likely to give you huge moves up and down with tremendous spurts of volume, making them much more risky. Of course, with that higher risk also comes the potential of higher profits…or larger… much larger losses than slower, more orderly moving stocks.

That’s why I like three symbol stocks.

As a general rule they will move in a much more orderly fashion. You are less likely to get whip lashed all over the street on listed stocks. They usually move much more slowly, making it easier to read the potential move via such tools as Level2 and Stochastic charts.

However, even three symbol stocks with the right news or set of events can trade in huge volume, causing wide swings and added risks. Yet, as a general rule they will trade somewhat boring compared to their cousins on the NASDAQ.

Normal everyday events like analyst upgrade and downgrades usually do not send the average NYSE or AMEX listed stock into a mania move. Instead they will trade in a more orderly pattern. Depending on the news they will often slowly tick up or down, very often taking thirty minutes, an hour or even more to get a decent profit. They often make a number of stop and goes, minor pullbacks, but they usually do not make the drastic pullbacks that NASDAQ stocks so often do. In Daytraders.com I refer to that as a pop’n flop.

I find both Level 2 and Stochastics charts much easier to use in predicting their behavior. (See: Tools of the Trader at www.TraderAide.com and other information on Level 2 and Stochastics if you are not familiar with these terms.

Keep in mind I am talking in general terms here. Certain three symbols, NYSE or AMEX stocks, can trade every bit as radically as any stock on any exchange. There are few that have a huge day trader following and can be sent into a frenzy if the right news hits the tape.

Some these “high flyers” come out the high tech sector, which includes the Internet stocks and semiconductors. Other “high flyers” come from the biotech stocks, which have increased volatility from such news as FDA approvals. After a while you will recognize the symbols because there are fewer of them than on the NASDAQ that trade like a house on fire on the right news.

Give them a try and see if you don’t lower you blood pressure just a bit!

Happy trading!

No permission is needed to reproduce an unedited copy of this article as long the About The Author tag is left in tact and hot links included. Questions and comments can be sent to: floyd@TraderAide.com.

Floyd Snyder has been trading and investing in the stock market for three decades. He was on the forefront of the day trading craze that swept the nation back in the late 1990′s, both as a trader and as the moderator of one of the Internet’s largest real time trading rooms, http://Daytraders.com He is the owner of http://www.TraderAide.com and Strictly Business Magazine at http://www.sbmag.org

Trading low priced Micro cap and penny stocks is a “High Risk High Reward” style of trading. I have found that one of the most profitable ways to trade these stocks is by finding the bottoms. If you are correct and find the bottom, the stock has nowhere to go but up. If you are wrong and miss the bottom, no one wants to “catch a falling knife”.

Over the years I have developed very successful strategies to find bottoming stocks, I have taken these strategies and created bottompicks.com. When searching for bottoming stocks, the first key is to understand what caused the stock to drop in the first place. The second key is to find out if there is any reason this stock should go back up in price. This can only be done with a complete understanding of technical analysis and the “due diligence” of fundamental analysis.

When a stock is bottoming, it has dropped to a new recent low. This could be as dramatic as the lowest price in years or something as simple as a 50% pullback from recent highs. At this point the stock may begin to stabilize (trade sideways). This could mean that the stock is now poised to rise again in price, but it could also be preparing for another move lower.

With micro caps and penny stocks it is always easy to find stocks that look like they’re at their bottoms. It seems that every night we are analyzing a hundred different stocks that have recently broken their downtrend. If you are unsure of how to find stocks in up trends or downtrends, try a stock screener.

Once you think you’ve found a stock that is technically ready to begin that profitable trend to new highs, it is now time to do your homework. Fundamentally there are many things to look for. There are so many that I can only give you a brief overview. You will want to read the filings and news to understand the companies share structure, current operation, and if there are any future events that may cause the stock to rise. Some of the more important items you will be searching for in the filings are operating shares, authorized shares, float and warrants.

When you have found a stock that is bottoming with a solid share structure and is due to release great news, such as a new product or strong earnings. This is probably a good time to buy. Prepare to hold on, stocks in this market have been known to rise thousands of percentage points in a short amount of time.

About the author:

Keith Guyette M.Ed, J.D. is a professional trader and the owner of a stock talk board http://www.thepennystockblog.com as well as the head stock analyst for http://www.bottompicks.com

Here we will look at how to use currency-trading systems to catch the big profits from the big moves, and how to pick a currency trading system that will be successful.

There are many currency-trading systems for sale, but many don’t live up to the hype in the sales literature, but finding one that makes money is easy – if you know what to look for.

Trend Following – The Key to Big Profits

As economic cycles of boom and bust in countries, take years, so do the currency trends that reflect these cycles.
The big profits are made by traders who can spot and trade these big trends for big profits.

There is no better way of doing this than using a currency trading system that can lock in, and hold these long-term trends for maximum profitability.

A Mechanical Approach to Profits

Currency trading systems remove the emotional component from trading – they don’t care why currencies move they just attempt to make a profit when they do!

Many traders have a problem with emotions when trading, rather than running profits and cutting loses, they snatch profits early (simply to bank a profit) and run losses (as they hope they will turn around) and of course, this strategy will lead to losses over the longer term.

A trading system gives you discipline, which is vital to trading success.

Don’t underestimate the effect of a lack of discipline – it’s the major reason traders lose!

The Growth in Computerized Trading

The developments in computer software, and the rise in popularity of the Internet, have seen system trading become more popular than ever.

For example, packages such as Tradestation and Supercharts, allow traders to build and test systems using a variety of technical indicators, however today more traders are buying systems that are ready made.

The idea is they load the program, follow the signals, make big profits, and don’t have to employ the services of a fund manager.

There are some excellent currency trading systems out there, and the following checklist will help you find one that can make big profits longer term.

Finding a Technical Trading System that Makes Big Profits

Always follow this checklist when buying a currency trading system.

1. Understand the logic of the system – if you don’t understand the logic, you won’t have the discipline to follow the system. Also, avoid “black box” systems where the logic is not revealed.

2. The system should aim to catch the long-term trends, not short term moves. It’s the longer-term trends that make the profits, so buy a system that targets them.

3. Simple systems are best – there’s no correlation in currency trading systems, between complexities and making money. A system’s rules should easily be understood, and not require a degree in mathematics!

4. Study drawdown from peak equity and overall profitability over time. Always assume your worst drawdown is ahead of you, and be prepared mentally to take it.

Also be aware of simulated track records that have little drawdown, they probably won’t work in practice – anyone can simulate profits with hindsight!

Warning! – Beware of “curve fitting” This is where a simulated track record is produced and the system is then “fitted” to past data to ensure profits. One trader likened this to shooting at a barn door and drawing circles around each shot afterwards to make a bull’s-eye.

A clue to a “curve fitted” system is one that has little or no drawdown and huge profits, or has a huge amount of optimization and variables instead of ONE straight set of rules.

5. Don’t ignore simulations totally; if the logic is soundly based, they may work, and many do.

6. Get to know the vendor selling the system – ask as many questions as you can, and check out his record, and philosophy of trading.

Make sure you feel comfortable in the system and the support you will receive before buying.

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and currency trading systems info. Visit our web site now and grab your CD http://www.tradercurrencies.com

Here we will reveal a system for currency trading profits, which has a logic that is so simple, ANY trader will see why it works, and why it will continue to work, as well as how they could be making big currency trading profits too!

If you use this system in currency trading, you will have the potential to catch EVERY major currency trend.

We have all heard this investment wisdom: “To make money buy low sell high”

However there is a better way to make big currency trading profits and the wisdom here is: “Buy high and sell higher”

This will become clear with some explanation:

Ignore Traditional Investment Wisdom if you want the Big Profits!

If you want to “buy low and sell high” you have to guess where a market is going to bottom and this is not easy. You are trying to PREDICT where a trend might start – this very often means the market goes lower and you lose.

Investors and traders are taught to “buy low and sell high” but when a huge move starts they watch and wait for the pullback – it never comes, the market simply goes higher, and they never get in.

The problem with this traditional investment wisdom is you end up trying to pick market bottoms, and try to get in on pullbacks, but when a market trades higher quickly, you miss the move.

This sees traders lose on trying to pick bottoms – they don’t make the profits they could have made from the big moves.

Breakout Systems are the Best for Catching the Big Profits

A breakout system does not try to predict a market bottom – it waits for CONFIRMATION.

It will wait for a market to break above a recent high, (resistance) or break below a market low, (support) if these levels are broken, a move will start, and astute traders ONLY trade the break – they don’t try to predict.

You can make big profits on these breaks – look at any currency you like: Japanese yen, Swiss Franc, British Pound, etc. and you will see huge moves from breakouts.

The Best Risk Reward

The breakout point provides the best risk to reward, to enter the trade.

Why? Lets take a hypothetical example:

The British Pound has traded up and tested resistance at 1.85 several times, and is currently trading at 1.70. The market rapidly trades up to 1.85, and immediately breaks to the upside, and quickly goes to 1.95

What has Actually Happened?

When the critical 1.85 area gives way, traders with stops on their short positions, start to cover, and new traders enter the long side of the trade. This causes a huge surge in price – as the area of resistance is so important.

If you are positioned to get in as the breakout occurs, your risk is low, and reward high.

Many traders don’t want to do this – they feel they are “chasing” the move, and want a pullback – it never comes, and they miss the big profits.

Keep in mind the old saying:

“A trend in motion is more likely to continue than reverse”

Check Your Charts

Most of the big currency moves in history have started with breakouts on the chart, then a huge quick move to the upside – with no PULLBACK

Big Currency Trading Profits can be yours!

Here we have looked at the concept, and why it’s successful, and you can see how uncomfortable it is to do – and that’s exactly the reason it’s so profitable!

Breakout Trading is Simple

All you need to use to trade breakouts, are traditional charts – and have some confirmation signals, to help you filter “true” from “false” breakouts – such indicators as RSI and Bollinger bands, are examples.

Astute traders are making huge profits every day from this simple method and you can too.

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and currency trading info. Visit our web site now and grab your CD http://www.tradercurrencies.com

There are a vast number of investment opportunities available to potential investors, but not all of them are right for all purposes. The most common types of investments are stocks and bonds. Stocks are shares of individual companies, while bonds are government-issued investment funds. Both can be great for starting in the investing market, but you should know a little about the difference between the two before making your investment.

Stocks

Stocks can help balance out a bond-heavy portfolio by providing diversification

Stock dividends also receive more favorable tax treatment than bond payouts.

If you make the decision that stocks may be the place for you to put your investment dollars, you must now determine the primary purpose of your stock investment.

The two primary stock investment goals are income and growth. You can have a combination of the two in one stock investment, but the features are almost never equal. In other words, although growth and income may co-exist in a particular stock investment, the investment choice you make should take into account the primary strength of the stock.

Growth Stock vs. Income Stock

Growth stock is stock in a company that doesn’t pay cash dividends, but instead reinvests its profits into the company. The idea behind this strategy is that the company will continue to grow and become more profitable, driving the stock price up.

Income stock is stock in well-established companies that do not need to reinvest their profits into their companies and therefore use their profits to pay dividends to stockholders. Income stock is often more expensive because the income stream and security of the investment is greater.

Mutual Funds

Many investors invest in the stock market through mutual funds. Mutual funds are professionally managed and are easier to diversify your investments in, which makes them less risky than investing in individual stocks. You still have to research what type of stock will best suit your goals, but the average investor finds it less stressful to invest in the stock market through this method.

Bonds

Bonds, though some consider them “safer” than stocks, still come with risks. Some bond funds offer enticing payouts but may take big chances to do so, including venturing into lower-quality and longer-duration credits; if your funds’ bonds lose value, you could see your principal shrink even though you’re pocketing a healthy yield. Checking a fund’s quarterly losses can be an easy way to see whether you could stomach a given fund’s short-term losses. There’s nothing wrong with making room for some higher-yielding bond funds around the margins of your portfolio, but consider these income-heavy funds to be side items because of their greater potential for volatility.

And while paying for high-quality financial advice can be money well spent, think carefully before paying a sales charge for a bond fund. If you’re paying a 3.75% load to buy a bond fund (and that’s a pretty low load), you’re surrendering most of your first year’s income payments from the get-go.

Individual Bonds vs. Bond Funds

Many investors prefer to invest in individual bonds rather than bond funds. While that’s a reasonable tack if you’re buying Treasury securities or perhaps even extremely high-quality corporate bonds, it makes sense to opt for a professionally managed bond fund for every other type of fixed-income security. Not only will a mutual fund offer you much more diversification (and therefore lower risk) than you could obtain by buying individual bonds, but smaller investors who are buying and selling individual bonds are also at a big disadvantage when it comes to trading costs.

You may freely reprint this article provided the following author’s biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

Every morning the trader sits down at his computer to begin the day, and the dilemma faced is always the same – finding a stock or two or three to make a buck on for that day. This really shouldn’t be that hard, but for some traders it is.
Let’s see if we can break it down and maybe make it a little easier.

First let’s start with a few basics about your work habits. The markets open at 9:30 EST, right? WRONG! Trading these days starts at 7 A.M.! That’s the very early morning action. Then you have what some traders call the official pre-market trading that starts at 8 A.M. Following that is the official market opening at 9:30 A.M. EST. This means that if you have been sleeping in, you could be missing some very interesting early morning trades. However, a word of caution here – pre marketing trading also has a higher element of risk attached to it because of a lack of liquidity.

Okay, so now that I have gotten you out of bed, you can start scanning the pages of Wall-Street Journal, Independent Business Daily and…… WRONG again!
Oh sure, you may find a trade or two in one of these publications, but in all too many cases that news is going be too old to trade. In addition, the news in those publications, or the reaction by the stock, is going to show up in other places.

The first thing you may want to do in the morning is check the after hours action from the day before. This information can be found a number of places. I use the NASDAQ home page under the Extended Hours Trading link found on the left side of the page. This will give you a list of the stocks that were most active in after hours for the day before. In most cases these stocks are moving on news released after the close. These links as well as others can be found at www.TraderAide.com.

While you are on the NASDAQ page make sure you take note of the Pre-Market Most Active list. This is going to be another great source of potential stocks for you to consider. An additional source on the NASDAQ page is the NASDAQ-100 Pre-Market Heat Map. This is especially useful right at the beginning and for the first hour of so after the beginning of the 5 A.M. premarket trading action.
In both cases, after-hours movers and pre-market movers, the action is usually news related.

An excellent source of this news is MarketWatch. You can find it in a hundred other locations on the net, but I find the MarketWatch site easy to use and even more important, easier to search. It is also less likely to be full of non-trading” news that you really don’t need to trade.

A few of the things you want to be looking for include events on stocks that take place nearly every day, such as: analyst up/downgrades; earnings reports’ and FDA actions which could include approval, disapprovals or merely making comments on application.

I also suggest you watch Bloomberg TV early in the morning, before the 5 A.M. premarket trading begins. I prefer Bloomberg over CNBC at this time in the morning because of their presentation of the futures and the news streamer on the bottom of the screen. Once the pre market opens I suggest you change over to CNBC simply because they have, what appears to be, a much larger audience. On CNBC the stocks reported on or mentioned are often sent up or down, offering excellent trading opportunities in many cases.

Once the markets opens, almost all real-time quote systems have an element built into them that will give you at least the top ten most active on the three main exchanges, both gainers and losers. Also, they may have a more advanced “screener” of some sort. With RealTick by Townsend Analytics, Ltd, it’s called Hottrend Realtime Radar. You can leave this running throughout the day. Stocks that show unusual volume compared to their historic volume patterns will show up automatically on the Radar. It is available for both NASDAQ and NYSE traded stocks. Check with your supplier to see if this feature, or something like it, is offered.

Last but not least, you want to be checking your Dow Jones news feed for the latest breaking news starting at about 6:30 A.M., New York time. Sorry “West Coasters, but as the bank robber said when asked why he robbed banks, “Because that is where the money is”.

Happy trading!

No permission is needed to reproduce an unedited copy of this article as long the About The Author tag is left in tact and hot links included. Questions and comments can be sent to Floyd at floyd@TraderAide.com.

Floyd Snyder has been trading and investing in the stock market for three decades. He was on the forefront of the day trading craze that swept the nation back in the late 1990′s, both as a trader and as the moderator of one of the Internet’s largest real time trading rooms, http://Daytraders.com. He is the owner of http://www.TraderAide.com and Strictly Business Magazine at http://www.sbmag.org

Below you will find the six common beliefs followed by the bulk of traders – and if you believe these myths as well, then they will restrict your chances of making significant currency trading profits.

Ninety percent of currency traders believe at least one or more of these myths – which explains why ninety percent of traders don’t make much profit by trading currencies!

1. You should always be in the Market in Case you Miss a Move

Traders love excitement, and their view is, if they are in the market they may catch the big move. Well they may – but chances are they won’t.

The big trends only come a few times a year in each currency – and you should stay out the market until they come, otherwise you will take losses, and run up commissions that will deplete your account.

Wait for the big trades – patience is a virtue in trading.

2. Diversification Reduces Risk, and Increases Profit Potential

Diversification simply dilutes your profits.

You hit a big move, and your other trades that lose, or give you only marginal profits, eat up all your currency-trading profits.

You need to have confidence to go for the big moves, when they occur, and load up these trades.

Currency trading is about calculated risks – if the trade looks good, hit it hard for big profits.

3. Day Trading is Better than Long Term Trend Following, as it’s Less Risky.

Many brokers spread this myth – and why not? – They make more commission if you believe it!

You will end up having more losses than profits in your trading. You will never make enough money in a day to cover your inevitable losses. When you add in commission and slippage, it’s inevitable that you will lose.

You need to hold longer-term trends, as these yield the big profits to cover your smaller losses.

4. Timing the Market is the Correct Way to Make Profits

Timing the market means you are trying to PREDICT where prices are going to top and bottom – this is not a good way to trade and the odds are against you.

A better way to trade is to wait for the market to CONFIRM a trend is under way, and jump on board. You may not buy the bottom or sell the high, but you can catch the major chunk in between – and with currency trends lasting for many months or years, you can still get plenty of profits from the trend.

5. Markets are the Same Today as they Were Hundreds of Years Ago

Rubbish! Trends now are much more volatile than they were even 50 years ago. Why? Today, with the Internet, price information reaches every corner of the globe in a split second. This increases volatility as everyone has the same information at once – and everyone tries to enter the market at the same time.

This was not the case even 50 years ago – the trends are still there, but volatility is much higher – traders get the direction of the trend right, but they find themselves stopped out by the volatility. How often has this happened to you? – It happens to all traders. Look at using options to give you staying power.

6. You can use a Black Box System to Make Money

You can buy a system from a vendor for a few thousand dollars – and it can make 50 to 100% profit per annum.

These systems normally have a hypothetical track record – and use price information where the results are already known, and of course, the logic of the system remains hidden from you – as it’s unlikely to have a sound basis.

Have you ever wondered why these vendors sell systems, when they could simply get a bank loan and trade their own systems?

Enough said on this one!

How about some Positive Advice?

If you want to make big currency trading profits, you need to do it for yourself.

Get a plan you have confidence in, and execute the plan with discipline – and have the courage to trade for large gains when they occur.

Good luck!

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and currency trading info. Visit our web site now and grab your CD http://www.tradercurrencies.com

If you have heard fund managers talk about the way they invest, you know a great many employ a top down approach. First, they decide how much of their portfolio to allocate to stocks and how much to allocate to bonds. At this point, they may also decide upon the relative mix of foreign and domestic securities. Next, they decide upon the industries to invest in. It is not until all these decisions have been made that they actually get down to analyzing any particular securities. If you think logically about this approach for a moment, you will recognize how truly foolish it is.

A stock’s earnings yield is the inverse of its P/E ratio. So, a stock with a P/E ratio of 25 has an earnings yield of 4%, while a stock with a P/E ratio of 8 has an earnings yield of 12.5%. In this way, a low P/E stock is comparable to a high – yield bond.

Now, if these low P/E stocks had very unstable earnings or carried a great deal of debt, the spread between the long bond yield and the earnings yield of these stocks might be justified. However, many low P/E stocks actually have more stable earnings than their high multiple kin. Some do employ a great deal of debt. Still, within recent memory, one could find a stock with an earnings yield of 8 – 12%, a dividend yield of 3- 5%, and literally no debt, despite some of the lowest bond yields in half a century. This situation could only come about if investors shopped for their bonds without also considering stocks. This makes about as much sense as shopping for a van without also considering a car or truck.

All investments are ultimately cash to cash operations. As such, they should be judged by a single measure: the discounted value of their future cash flows. For this reason, a top down approach to investing is nonsensical. Starting your search by first deciding upon the form of security or the industry is like a general manager deciding upon a left handed or right handed pitcher before evaluating each individual player. In both cases, the choice is not merely hasty; it’s false. Even if pitching left handed is inherently more effective, the general manager is not comparing apples and oranges; he’s comparing pitchers. Whatever inherent advantage or disadvantage exists in a pitcher’s handedness can be reduced to an ultimate value (e.g., run value). For this reason, a pitcher’s handedness is merely one factor (among many) to be considered, not a binding choice to be made. The same is true of the form of security. It is neither more necessary nor more logical for an investor to prefer all bonds over all stocks (or all retailers over all banks) than it is for a general manager to prefer all lefties over all righties. You needn’t determine whether stocks or bonds are attractive; you need only determine whether a particular stock or bond is attractive. Likewise, you needn’t determine whether “the market” is undervalued or overvalued; you need only determine that a particular stock is undervalued.

Clearly, the most prudent approach to investing is to evaluate each individual security in relation to all others, and only to consider the form of security insofar as it affects each individual evaluation. A top down approach to investing is an unnecessary hindrance. Some very smart investors have imposed it upon themselves and overcome it; but, there is no need for you to do the same.

Geoff Gannon writes a daily value investing blog and produces a twice weekly (half hour) value investing podcast at:

http://www.gannononinvesting.com