Both poker and trading can be considered financial ‘games’. Games where insights into human nature are crucial, and especially insight into our own emotions. The good trader/player knows when to push hard, and when it’s time to retreat. Alertness, relaxation, detachment and other complex mental traits have to develop if one is to succeed in the long run.

This article considers one strategy - called “tight” in poker and compares it with trading. In poker almost every table has a very tight player. They only open with aces suited or a high pair. This is a reasonable strategy and mostly these players make small profits or break-even. They rarely make large gains though because other players know that once this tight player raises he has a good hand- and so everyone folds around them.

Trading has a similar type of player. Many traders wait for all the indicators(fundamental and technical)to line up and confirm that the trade will go in the expected direction. And usually it does. However, it may soon change direction. This is because everyone who was going to go long has already gotten on board. This is not to say that waiting is a bad strategy - it is a safe one that requires patience. Most of the time it is the best strategy. But sometimes, like on the poker table, we need to mix it up..

In poker our tight player gets dealt a pair of aces. This is what he has been waiting for and he comes out guns blazing. On the flop there might be some dangerous cards - such as 2 of the same suit - indicating that another player could have a flush draw….Another card with the same suit comes on the turn. But he ignores this and continues to bet. At the river the opponent turns over a 2,3 suited to the 3 table cards and wins with a low flush. Our ACES man is devasted. He had the much higher hand before the flop- it doesn’t seem fair! But poker is about the cards both now and in the future..

Likewise, the very patient trader often finds it hard to get out of trade once it goes wrong. He has spent much effort identifying the right trade and been so patient waiting for it to set up that he feels almost cheated if the trade turns wrong. He ignores what is occuring now because he is fixated on the past inputs. A bad result may be even more devastating for the trader: At least the poker player can know the odds, and understand that he may have had 70% likelihood of winning, but that he got unlucky. But such odds calculations are not available to the trader- he may be genuinely mystified. And the more emotion and money invested in the trade the more the effects are multiplied.

Part II (to be published soon)looks at gaining an edge.. Trading is not that different from the way a casino is run. There are a few hundred casinos and tens of thousands of players. Often the players get lucky but over the long run it is the casino that continually adds to its bank account.When I first started trading I made some good bets and took fast and large profits. It seemed easy. It only took a month before those first profits went and another three months before the remainder of the account disappeared too. I was playing like a typical gambler. What I gradually learned, the hard way, was that a successful trader becomes the casino, not one of the players. He finds an edge and works it, looking for consistent small increases in equity. Do you have an edge? if you are not sure what your edge is then it is likely you don’t. As they say in poker, ‘If you can’t spot the sucker at the table, then you are the sucker’. And remember, even slotmachine gamblers have winning streaks. If you have been winning do you have a real edge or are you only getting lucky..(To be continued).

The Forex Manager is a web resource for investors and traders.

TheForexManager http://www.theforexmanager.com

What Does FOREX Stand For ?

FOREX stands for Foreign Currency Exchange Market. It is gaining more and more interest
in the investing world, and for good reason. The FOREX Market is the largest market in the world
and can be accessed anywhere in the world. The FOREX Market’s volume is over 1.5 Trillion, providing
almost infinite liquidity and flexibility.

How do you trade?

Instead of trading “stocks” where there is thousands to choose from, you are trading pairs
of currency against each other. This gives you an advantage because you can focus on just 2
pairs of currencies instead of countless stocks. You can trade from your home computer, or any computer
with an Internet connection from anywhere in the world.

When do you trade?

The FOREX Market is open 24 hours a day so you can trade whenever you want! You just need a computer,
a Demo or Real Money account and a willingness to learn, research, and trade!

Why Should I Trade?

You should only trade if you are ready to change your mind about how much money you
CAN make and reach your full potential.
You should trade forex because its a great tool to leverage your time and replace your income.

Here are the benefits of Trading Forex:
You can work anytime you want 24 hours a day, 6 days a week. Its a continuous onine (electronic) that
never closes. Work at home, on the beach, or anywhere in the world!
You can trade foreign currencies on a high leveraged basis, sometimes up to 200 times your investment!

This is made possible by the higher levels of liquidity in the market.
Price movements are highly predictable! Fx Market trends generally repeat themselves, creating trends
that are easily predictable!
With all these benefits and tons of others, you can easily make $200 to $3000 dollars a day trading!
Too good to be true ? Let us prove you wrong for FREE!

There are many other AWESOME reasons to trade FOREX and you can learn them all by downloading our FREE E-Book!

Also Get access to the BEST free FOREX Course on the net ! Come visit us at http://www.successby4x.com

“Leaders need to be optimists. Their vision is beyond the present.” -Rudy Giuliani

Stocks are often categorized by the type of objective their companies are trying to achieve. Two of the most common goals are growth and income. In addition, stocks can also be distinguished from each other based on the type of payout their offer to their investors.

Growth Stocks. Companies which offer growth stocks do not offer dividends. They are characterized by an intense and aggressive rise in the value of their stocks. This allows investors to see a growth in their original capital extremely quickly. Growth stocks usually increase quicker then the stock market itself. This works great because the company and its investors can easily reinvest their profits to increase their rate of return. Reinvestment is an alternative to dividends which other types of stocks may pay out monthly or quarterly. A good example of growth stocks are those in the tech sector. Money made from investing is pushed back into the business to finance more research and hopefully development. Growth stocks are extremely popular because of their rapid increase in price.

Income Stocks. Income stocks belong to companies which are not growing but are extremely stable. They have reached the top end of their value and continue to maintain that value. These stocks to not fluctuate with the economy or the stock market and are extremely low risk. Income stocks pay monthly dividends to it’s investors. This is a way in which investors can actually live off their investments. A good example of income stocks are REITs or real estate investment trusts. REITs offer a rate of return just under 5% yearly.

Slang Terms. There are several slang terms for stocks that all investors should know both for historical purposes and just for the fun of it.

Blue Chips is a term that refers to company stock that has a long history of producing a stable and regular increase in the value of their stock options. These companies have been through the ups and downs of the economic and stock markets - and survived. The term originates from poker where the blue chip represents the highest amount of money. Current Blue Chip companies include WalMart, Coca-Cola, and IBM.

Penny Stock is a reference to stocks which are worth less then a dollar. Most of these stocks fall under the heading of ’speculation’. Penny stocks usually belong to companies which are new, up and comers that financial speculators believe are going to be extremely successful. They can offer a great rate of return for investors but if things do not go well, investors can lose all their money they have invested.

The reason most trade is to make profits. Rarely do we do so for the sport of it. There are some, however, that do treat their trading as if at the game tables of Las Vegas. Those that do, unfortunately, are soon sent packing to their day jobs so that they can return with another stake to try again. But if you are one of those who think trading should be taken more seriously, keep reading.

Trading is difficult, and then again, it is really simple. Perhaps it should be said that trading is simply a state of mind. What may appear daunting a task to some may yet seem as a catwalk to others. The glass is half full, the glass is half empty, that sort of thing.

How does trading appear to you? Are you overwhelmed with all the news? Or is it all the technical indicators being tossed into your trading programs making your eyes go cross? Perhaps it is all the different trading programs themselves that have you looking dumbfounded out your office window, staring into space and making strange sounds from between your drooping lips.

Well, maybe some choice words here might help clear up that situation for you. A little perspective can go a long way to getting you to see the market in a whole new light.

If the markets moved haphazardly with no rhyme or reason, I would suggest to you to run for the hills and do not look back. Fortunately, this is not the case. With all the conviction in the world, I know for a fact that the markets are governed by natural laws that make it predictable in various degrees. What degree they are predictable is more dependant on who is doing the predicting and how.

The mere fact that the markets have a tendency to trend says a lot about how much randomness it contains…very little. Rather than acting like a scratched record, it moves with such harmony that displays an obvious mathematical relationship between its tops and bottoms. One need only to spend hours upon hours studying these charts to eventually see this to be true.

But the point is that the markets have a tendency to trend. And because this is the case, it is to your advantage to concentrate your trades with that trend in mind. A market moving higher is more likely to continue doing so then to move lower. And a market trending down is likely to continue doing that over moving up. At some point in time the trend will eventually end. But if you just look at your charts you will see that it takes a long time for this to happen.

Knowing this alone you can put the odds in your favor. However, unless you have the cash to withstand the trend corrections (the moves opposite the trend that is usually temporary), you may not last after one or two of those corrections. The issue here is that of TIMING. In other words, if you are buying you want to do so as close to the trend bottom or correction bottom as possible. That way you will not have to withstand any major draw to your trading capital and will have ‘stay-ability’. Ah, the feelings of being able to stay in a big trend and watch your account swell up like a tick on your dog. The better you can time your trades the less cash you need. It is a given.

So you know that you want to trade with the trend. And you know that the better you can time the market the less you have to risk and the more you can gain (because you can hold on longer in the trade as it goes your way). So how do you go about seeing the market in a way that is less intimidating, without resorting to using rose colored glasses borrowed from your 3-year old?

One way is to start from the top and work your way down. At your disposal are charts of different time frames. There are yearly, monthly, weekly, daily and intraday charts that you can use to view your market from top to bottom (no pun intended). Start from a higher time frame than you will be trading from. If you are looking to day trade, look at the daily chart to get an idea of the predominant trend for your market. If you plan to be in a trade for more than a day (position trading), then make sure to look at the monthly and weekly chart before you make your trading plan off the daily chart.

When you look at a chart in a higher time frame, you get to see the big picture. Are prices moving lower overall on the monthly chart, forming lower monthly swing tops and bottoms? If so, then the major trend is down. And what should this suggest to you? That it is likely to continue down. Since you viewed this on a monthly chart, how do you think this will look on your weekly or daily chart? That downtrend on the major monthly chart will be a major, major down trend on your weekly chart. And on your daily chart it is going to be going down for a long, long time.

So if you happen to be planning your trades off a daily chart, you best be selling off each corrective swing top and get that idea of buying out of your head. If your trend is long-term up and your weekly is in its upward swing as well, then you better only think buying dips and nothing else on your daily chart.

By doing this, you will start to see the market in a much reasonable light. You will see the big picture and all the little noise will have less impact on your psyche. Once direction is known and it has been determined that you are going to focus strictly on buying or selling based on the trend, then you can look at ways of improving your timing further.

Rick J. Ratchford has been trading since 1989 and since 1996 is an Analyst for ProfitMax Trading Inc., a membership for traders specializing in the advance forecasting of market tops and bottoms.

http://www.profitmaxtrading.com
“Know Today the Market Turns of Tomorrow!”

There are many benefits and advantages for trading currencies on the Foreign Exchange, better known as Forex.

The Forex Exchange was established in 1971. This market grew at a steady rate throughout the 1970’s, but in the 1980’s Forex grew from trading $70 billion per day to over $1.5 trillion each day.

There are many huge players in Forex, but it is accessible to the individual trader. Each lot traded is worth approximately $100,000. By using leverage, an individual trader is only required to have a $1000 investment in the trade. This is a 100:1 leverage. No other market offers this amount of leverage.

Forex is also an extremely liquid market. Because it is so large, you can buy or sell in only seconds where your trade is only a mouse click away. You can also preset an automatic close for your position. This means you don’t have to sit and watch your position, just place the trade, set an exit point and go what you want.

Forex trades virtually 24 hours, 7 days a week. It only closes from Friday afternoon until Sunday evening. This makes it possible to set your own trading hours. If you trade part time and want to place your trade at 3am, log into your account and trade. If you are a full time trader, the same applies. No other market lets you pick the hours you trade.

There are no commissions charged on Forex, only a small transaction fee. This is not possible in any other market, as brokers charge a commission on each trade in all other markets.

Because currencies are traded in pairs, so you are buying one currency and selling the other. For example, if an investor believes the US dollar will gain against the euro, you would buy the US dollar and sell the euro. It’s just that simple.

The potential for profit is good as there is always movement between currencies. Even a small change can result in substantial profits because of the large amount of money involved in the transaction.

First and foremost, before just opening an account and blindly making some trades, you need proper training. Study the market, learn the terms used in trading, set up a demo account with a currency broker. Then, and only then, use real money to trade.

Charles White is an internet marketer. More information can be found at
http://www.yourforexconnection.com.