Top Tips For When You Start Investing

By Mr Christopher Latter

Investing has become very important these days as the social security benefits of our future are unknown. People want to start investing to have a safe and insured future as they know it's not wise to totally depend on the retirement plans and social security benefits. Many people may be saving the money over the years in a low interest rate saving account and now they want that money to prosper with a faster pace. Another scenario is that some people may have inherited some money and they want to start investing to make the most of it.

To attain the things that you desire, like starting a new restaurant or building a new home or children's education you have to start investing. The type of investment to be made would be determined by the financial goals you have. If you want to make a lot of wealth fast then you have to start investing in higher risk investments, which will provide you large returns in a short period of time. If you don't want to take more risk and thinking of long term investment for the sake of money after retirement then you of to think of the safer investments that give you good returns over a long time.

If you feel that you are too young to start investing then you are terribly wrong .The only reason that you should not start investing is the lack of money and if that is the scenario then you can easily overcome that by making some extra money or by finding a way to save the cash you already have or by getting a new job. If you are a student then you get a part time job and save money to start investing.

When you are ready with the cash and want to jumpstart in to the investment arena just look for the useful information that would help you decide to make a choice on the various types of investments available. Most of the info available is quite good and useful too. But you have to be careful with the misleading info. This could lead you in to losses. The next step is quite simple. Get started by opening an investment account. The real purpose to start investing is to create money and increase security. It is not advisable to totally depend on retirement policies of your organization and also on social security benefits system.

Do you want to consult an expert? It is always advisable as they can help you with their expertise and understanding of things. They are quite helpful to the beginners who want to start investing. But be careful to choose some one who is qualified enough and related to your field of interest. Their advice could help you to avoid a loss. They have training paper practice platforms which could be very helpful to get all the information necessary to make an investment in a particular field. Thinking long term is the right way to go. Remember the saying that there is no short cut to success.

You should have the ability to design strategies and accordingly gain expertise by following very strict guidelines. You have to accept the fact that investing is a continuous process. So, don't stop learning even after you start investing. - 23208

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How to Choose a Forex Robot

By Mike Ashford

I get at least 5 spam forex related emails in a day. Most have some amazing automated forex robot that will make me a lot of money in a hurry. The temptation is high to get the great forex robot, especially when it is only being offered to a few "special" forex traders.

Having fallen for such forex scams before, I am now more careful when searching for a reliable automated forex trading system. These are a few rules I use before I buy an automated forex robot.

1. Never trade before Back testing

When one looks at the results of some of the automated forex systems, one is tempted to immediately trade their real accounts. This might lead to heartache when one discovers that the automated system is not for them.

It is imperative that the forex trader finds out if a forex robot has worked before. It is not enough to read testimonials and listen to salesmen to confirm that an automated system actually works. The prudent forex trader needs to back test the results themselves so they can be confident that it actually works and also to know the inner workings of the automated system.

Other than back testing I also make an effort to forward test the system. Forward testing involves actually trading the system in a demo account with current market action. In this way I am able to find out the strengths and weaknesses of the automated system.

2. Customer Support

If a company selling a forex robot does not have customer support, I never touch it. I have bought forex systems that come with an eBook with the notion that the ebook will come with all the information I will ever need to trade the forex robot.

This is rarely the case and do not be surprised to find a forex instruction manual with poorly written English. Some forex robot vendors are in such a hurry to sell their forex robots, they never think about giving proper support for their product.

If a vendor can not take the time to give quality customer support, then it is very likely that they used the same amount of effort in creating the forex robot. If you have paid for a product, it is not too much to ask that your questions are answered so that you can use the product to the optimum level.

Over your forex trading journey, you are going to come across a new forex system every day. It is important for your profitability to ensure that your forex robot is not over optimized. Just concentrating on the win/loss ratio and the total profits of any forex robot is not encouraged. One should take the time to figure out if the forex system has positive expectancy and the system can also survive drawdown. Ignoring drawdown in an automated forex robot is a major cause of pain especially for new forex traders. Make sure that your forex robot is profitable during the good times and also conserves your trading capital during the bad times. - 23208

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Money Management in Automated Forex Trading

By Mike Ashford

Automated forex trading can be profitable for even new forex traders. A good forex trader in addition tries to increase his chances of profitability by looking for forex trading robots that also include money management techniques.

A good forex trading robot should enable the forex trader to take profits, limit loses and even trail their stops. In other words, other than just being profitable, the automated forex system should also increase his trading exposure in winning periods and reduce trading exposure during losing periods.

Money management in automated forex trading is very crucial for the following reasons.

1. Preserving Capital

A forex trader who does not learn how to preserve trading capital is bound to lose it. Many forex robots only allow you to trade a system. Few are able to protect a traders capital even when they are in a drawdown. A good forex robot should be able to have trading parameters that allow the forex trader to preserve his capital when the market is not in tandem with the automated forex system.

2. Adequate Capital

Other than preserving your capital during slow forex trading periods, a good forex robot should also ensure that the trader has adequate capital to trade the system.

There is nothing worse than a forex trader entering a trade without adequate capital. It is like going to a fast food restaurant without the proper change to buy a burger. Sooner or later the under capitalized forex trader will probably lose any trading funds they might have in their account. A good automated forex system will alert you to this scenario.

3. Set Reasonable Goals

A good automated forex system will have money management techniques that will allow the forex trader set reasonable forex trading goals. Forex trading is a profitable endeavor but most traders give up when they do not achieve trading profit goals that were unrealistic.

A forex trading robot will allow the forex trader to have reasonable expectancy for their trading dependent on how much capital they have and also the performance of their robot.

4. Predetermine Loses

Many times a forex trader gets paralyzed when trying to exit a losing trade. It is common for the forex trader to exit winners too early but exiting loses is more difficult. Traders hold on to a losing position in the expectation that it will soon turn in their favor. My very first trades consisted of losing trades that were some 100 pips while my wins were in their teens.

A good forex robot will ensure that this does not happen and exit your trades at predetermined levels thus letting you conserve your trading capital. Letting the forex robot determine when you should exit a losing trade is probably one of the most important reasons to use automated forex software.

Good forex traders make it a habit to apply money management techniques especially when they are trading automated forex systems. I have realized that my best performing forex trading robots all have money management techniques built into them. Over time, even a mediocre forex robot becomes very profitable with good money management techniques. - 23208

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How About Currency Trading? (Part II)

By Ahmad Hassam

The most active traded crosses focus on the three non USD currencies (EUR, JPY and GBP). These crosses are known as the euro crosses, yen crosses and the sterling crosses. The most actively traded cross currency pairs are: EUR/CHF, EUR/GBP, EUR/JPY, GBP/JPY, AUD/JPY and NZD/JPY. Crosses enable currency traders to directly target trades to specific individual currencies to take advantage of news or events.

When you look up at the currency pairs, you may notice that the currencies are combined in a seemingly strange way. For instance, if sterling-yen (GBP/JPY) is a yen cross, why it is not being also referred to as yen-sterling (JPY/GBP)? The answer is that those quoting conventions were evolved over the years to reflect traditionally strong currencies versus traditionally weak currencies with the strong currency coming first.

The most basic convention that you need to understand is that the first currency in the currency pair is known as the base currency. For example in EUR/JPY, Euro is the base currency. Suppose you buy or sell a currency pair. It is the base currency that you are buying or selling when you buy or sell a currency pair. The second currency in the pair is known as the counter or secondary currency. In the above currency pair, Japanese Yen (JPY) is the counter or secondary currency. So if you buy 100,000 EUR/USD. You have just bought 100,000 Euros and sold the equivalent amount in dollars.

Therefore you can say currency trading involves simultaneously buying and selling. Going long in currency trading means having bought a currency pair! When you are long, you are looking for the prices to go higher. You want to sell at a higher price from that where you bought. It will make you a profit. If you are long and the price goes down, you will make a capital loss.

Going short in currency trading means selling a currency pair! It means that you have sold the currency pair, meaning you have sold the base currency and bought the counter currency. When you anticipate the price of a currency pair going down, you go short in anticipation of the price going further down. This will make you a capital gain later when you exit your position. In currency trading going short is as common as going long. Unlike stock trading where you had to observe the up tick rule before you could go short. In currency trading there is no such rule.

Its called squaring up if you have an open position and you want to close it. You need to buy or go long to square up if you are short. You need to sell or short to go flat if you are long. Having no position in the market is known as being square or flat. Selling high and buying low is the standard currency trading strategy just like in any other trading.

A clear understanding of how P&L works is especially critical to online margin trading. Profit and Loss is how traders measure success and failure. You will need to pony up cash as collateral to support the margin requirements established by your broker when you open an online currency trading account.

Profit and Loss calculations are pretty straight forward. They are based on position size and the number of pips you make or lose. A pip is the smallest increment of price fluctuation in currency pairs. Most of the currency pairs are quoted up to four decimal places except those involving JPY; they are only quoted up to 2 decimal places. Suppose GBP/USD quote is 1.2963. If the price moves from 1.2963 to 1.2983, it has gone up by 20 pips (1.2983-1.2963). Pip is the increase or decrease in the fourth decimal digit. Pips are also referred to as points. - 23208

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Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Learn Currency Trading. First Trade Your Forex Demo Account!

How to Backtest Automated Forex Systems

By Mike Ashford

Automated forex systems are a great boon for forex traders. The ability to always be trading without the need of your presence is a great way to increase your profitability when trading forex. However, getting the wrong automated forex system to trade can cause major lose.

That is why it is important to backtest your automated forex system before you use your trading capital. However, you need to be able to do proper back testing for you to get the most out of your system.

1. Use Proper Forex Software for Backtesting

If you are going to risk thousands of dollars in forex trading, then you can afford getting proper forex back testing software. It is not enough to get software that is does basic testing. A forex trader needs to invest in forex software that is reliable and whose results can be verified. Get the proper forex trading tools and you may never need to worry about the viability of your forex trading system.

2. Get enough Forex Trading Data

The forex market is ever evolving and there is a need to test your automated forex strategy in different forex trading environments. There are a lot of forex data providers who provide such data for free. Your forex broker can also be a good source for such data.

Other than just the quantity of the data, make sure that your source also has quality data. If you test your automated forex system on quality and enough data, your chances of your back testing results being replicated are higher.

3. Do not Over-Optimize

Every time you change the parameters of your forex robot, you are likely to get unreliable results. Over optimizing or curve-fitting a forex system to give you better results on unrealistic parameters will give you a forex trading system that only works on paper but not in the real world.

Curve fitting normally occurs when the forex trader is using too many parameters. Try and keep the automated trading system as possible. If you create a simple forex robot and it shows profitable results on back testing, then it is more likely to work than a curve fitted forex system.

4. Adequately Test Your System

I have seen automated trading system that only work in one currency market. Most of the time such trading systems have been curve fitted. Before you trade your own funds in any forex robot, ensure that you have back tested the system on different time frames and also different currency markets.

The more time frames an automated forex system is profitable, the more likely it will work in a real environment. I have found that the best automated systems are the once that confirm that a trade is on in a higher time frame as well as in a lower time frame.

Take your time when back testing. Do not be lazy about it as it is crucial to making you a better forex trader. I never trade an automated forex system without back testing it thoroughly first. - 23208

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