SigmaForex  sums up the most important differences between foreign exchange market

and futures marketare in 

Foreign exchange market against futures market

Liquidity

Forex market: close to two trillion dollars of daily volume.
Futures market: around 400 billion dollars on a daily basis.

Transaction costs

Forex market: Commission for free and narrow margins.
Futures market: the high fees committees.

Margin

Forex market: the fixed exchange rate, on the sidelines of every position.
Futures market: different levels of attitudes overnight on the sidelines of today’s time positions.

Trade execution

Forex market: immediate implementation.
Futures market: consistent implementation.

All this makes the foreign exchange market very attractive to investors and traders. But I need to make something clear, despite the benefits of commercial foreign exchange market is notorious; it is still difficult to achieve commercial success foreign exchange market. It requires a lot of education, discipline, commitment and patience, like any other market.

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Posted: August 8th, 2008 under platform, sigma, trade, trading.
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Influence trading.

Commercial foreign exchange market and provide greater purchasing power more than many other markets. Some brokers offer foreign influence up to 500:1, allowing the merchants in the margin only 0.25% of total investment. For example, a trader with 100:1 mean to have a position of 100000 U.S. $, only U.S. $ 1000 on the sidelines there is a need to be able to open this position.

Lower transaction costs.

 
SigmaForex offers the Free Trade Commission. The only one who suffered traders in terms of cost in any transaction is the spread (the difference between purchase price and the sale of each currency pair). This proliferation can be a low 1 PIP (the minimum increase in any currency pair) in some couples.

Low minimum investment.

Foreign exchange market requires less capital to start trading more than any other markets.This is the great advantage since forex dealers capable of keeping the investment risk to a minimum.

Specialized trade.

Liquidity of the market allows us to focus on a few instruments (or currency pairs) as the core of investments (85% of all business transactions carried out on seven major currencies). Allowing us to monitor, and at the end of each instrument to know them better.

Business from anywhere.

If you do a lot of travel, you can trade from anywhere in the world only after connecting to the Internet.

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Posted: August 8th, 2008 under platform, sigmaforex, technical analysis, trade.
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Commercial foreign exchange market has become very popular in recent years. Why is it that traders around the world see the foreign exchange market as an investment opportunity? We will try to answer this question in this article. It will also discuss some differences between the foreign exchange market, the stock market and futures market.

Some of the benefits of commercial foreign exchange market are:

President liquidity.

 
Liquidity is what really makes the foreign exchange market differs from other markets. Foreign exchange market is more liquid financial market in the world with nearly $ 2 trillion traded daily. This ensures the stability of prices and better trade execution. To allow traders to open and close the transaction easily. As such magnitude, which makes it difficult to tamper with the market extensively.

24hr market.

 
This is one also one of the biggest advantages of Forex trading. It is all over the Place Market, the market opens on Sunday at 3:00 pm EST when New Zealand begins operations, and closes Friday at 5:00 pm EST, when the end of San Francisco. There are transactions in virtually every time zone, allowing active traders to choose at any time of the trade.

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Posted: August 8th, 2008 under sigmaforex, trade, trading.
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All professions whether it be sport, business, or trading have what are called the basics and if you’re starting out in a new profession, the basics form the foundation or the core. However if you’ve been practicing your profession for quite some time and feel you’ve gone off track or are not hitting your goals, usually the best thing to do is just get back to the basics: and trading is no different.

This is not an article based on emotional discipline or psychology, it is based on the basics of a trading plan, and it really doesn’t matter if you’re long term or short term, the basics apply to most market participants. Some may have trading plans that are quite different to the basics however for the majority who are relatively new to trading or are struggling, the basics are by far the best approach to adopt.

The basics are split into :

1. Determine the trend  2. Wait for a pullback

1. Determining the trend can be a discretionary or mechanical decision. For example, a lot of traders can pull up a chart and instantly determine it’s going up, down, or it’s sideways and choppy, and if it’s the latter it is best left alone; this is a discretionary approach.

For other’s they need some tools to make that decision for them such as moving averages, MACD or trend lines to name a few. All have their pluses and minuses and it usually helps to use a couple of tools or to add some discretion.

I’ll give you an example of a completely mechanical approach to determining a trend.

Set up a 200 day simple moving average (200 SMA) on your chart. Also add the indicator ATR (average true range) and set it to 100. If you take the current 200 SMA reading and the reading from 50 days ago, the difference needs to be greater than 4 times the current ATR(100) reading.

For example, if the current 200 SMA reading is 60 and the reading from 50 days ago is 50, that’s a difference of 10. If the current ATR(100) reading is 2, multiplying it by 4 gives you 8, and as such means you are in a mechanical uptrend. The opposite applies to downtrends or bear markets.

2. Waiting for a pullback simply allows you to get on board a trend at a cheaper price. It can become somewhat of an issue for many as it’s hard to time when the pullback has ended or to determine if indeed the trend will continue. It could end up being that the trend has ended.

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Posted: August 7th, 2008 under Uncategorized.
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Instead of expecting  a loss every time you trade, rehearse how you will respond to a loss. Before you trade next, visualize placing the trade and then seeing price go against you and actually taking out your stop. Now monitor your posture, your facial expressions, how you are around other people, especially loved ones and so on.

If you’re not happy with the way you respond, in other words you react, then visualize a different response. It will take practice but you do need to be aware of how you respond or react to losses, because once you become aware, you can prepare better and therefore practice a better way.

Once you become aware and change your response, losses won’t hurt you as much, because you’re prepared for them and you now know how you’ll respond.

Finally, be very careful how much of your capital you risk. Can you afford to lose $100 in a trade without it affecting your account balance and your emotions too much? If you answer yes, then only risk that much. Why put yourself in a state of uneasiness and stress, when you don’t need to. Rather than going with a fixed percentage of your capital in every trade, risk what you know you can handle to lose. If it’s only $50 then only risk that.

You should know by now that most of the time, if you only lose a small amount of money you can find it again from somewhere else. It’s when you go for the big home runs that you risk your capital and your emotional state. Don’t let the lure of a big home run ruin the long term rewards of becoming a disciplined, detached and unemotional trader.

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Posted: August 7th, 2008 under sigma, sigmaforex, technical analysis, trade, trading.
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Emotions are one of the most talked about enemies of the novice trader. I say novice, because unless you have become a master of your emotions, you are still a novice. Experienced traders trade with a detached and unemotional mind.

If you’ve been trading for a while, I bet you have had situations where you just felt beaten. You then either came close to quitting, or you tried to re-assure yourself with positive affirmations which at the time felt like a waste of time. If you’re a novice trader this is bound to happen, as your aim is to make money!

Feelings like this can cause you to trade impulsively, whereby you trade with too much risk at the hope of hitting a big winner. You do this because you may want that feeling of success, pride, adrenalin and so on. The problem with this is that should the trade go wrong, you can turn that beaten feeling into a more severe depressed state of mind.

Changing your mindset to become more detached is easier said than done but there are a few things you can do, and with practice and awareness, they can become a lot easier to implement.

Accept losses. You need to accept that losses will occur. Every single trader out there has to deal with losses, so thinking that you’re alone when it comes to dealing with losses is just silly. Before you set out to trade, you should remind yourself that losses occur.

Now the trick here is not to expect a loss every time you trade. This is a negative mindset and believe it or not, if you expect to have a loss every single time you trade, your mind will play tricks on you and make you do things to support your belief. The mind is a very powerful organ!

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Posted: August 7th, 2008 under sigma, sigmaforex, trade, trading.
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